COMAR Title 31 — MARYLAND INSURANCE ADMINISTRATION

31.01.01 General

COMAR 31.01.01.01 Authority and Purpose.

This chapter is promulgated as an aid to carry out the statutory provisions set forth in the Insurance Article, Annotated Code of Maryland. Its purpose is to establish standards for the construction and application of all regulations heretofore and hereafter made in order to permit brevity, avoid needless repetition of language, and facilitate reference to related Code sections.

History

Administrative History: Effective date: June 20, 1970
Administrative History: Appendix “B” amended effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.01 to COMAR 31.01.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .03C amended effective May 23, 2005 (32:10 Md. R. 926)
Administrative History: Regulation .03H adopted effective January 1, 2003 (29:20 Md. R. 1591)
Administrative History: Regulation .04 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .05 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.01.01.02 Applicability.

This chapter applies to all persons subject to any laws enforced by the Maryland Insurance Administration.

History

Administrative History: Effective date: June 20, 1970
Administrative History: Appendix “B” amended effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.01 to COMAR 31.01.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .03C amended effective May 23, 2005 (32:10 Md. R. 926)
Administrative History: Regulation .03H adopted effective January 1, 2003 (29:20 Md. R. 1591)
Administrative History: Regulation .04 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .05 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.01.01.03 Procedure.

A. Each regulation made, amended, altered, or modified shall be deemed to contain or be subject to the provisions of this regulation, whether or not it is incorporated by reference or by express language.

B. References. Any reference to articles not otherwise designated means articles of the Annotated Code of Maryland, as amended, as of the date of effectiveness of the subject regulation. Any reference to the Article or the Insurance Article or to an individual article not otherwise designated means Insurance Article, Annotated Code of Maryland. Any Code section reference not otherwise designated means the section of the Insurance Article so numbered. Any section, subsection, paragraph, or subparagraph reference not designated as a Code section and not otherwise designated means the section, subsection, paragraph, or subparagraph so numbered of the regulation in which the reference appears.

C. Definitions.

(1) Unless a word is expressly defined in this title and the definition is applicable to a regulation or part of a regulation, any word used in any regulation shall have the meaning provided in the Insurance Article if applicable and as limited in the Insurance Article, including the list of definitions contained in Regulation .04 of this chapter.

(2) Notwithstanding §C(1) of this regulation, in the case of a conflict between a definition in the Insurance Article and a definition in this title, the definition in the Insurance Article is controlling.

D. Interpretation. If there is an ambiguity in a regulation which permits an interpretation or application to a person or circumstance in conflict with the Insurance Article, the ambiguity shall be resolved so as to be in conformity with the Insurance Article.

E. Penalties. In addition to any other penalty provided, willful violation of any regulation issued under the provisions of Insurance Article, §2-109, Annotated Code of Maryland, shall subject the violator to such penalties as may be applicable under the Insurance Article for violation of the provision to which the regulation relates. A penalties section reference list is attached as Regulation .05 of this chapter but it should not be construed to represent necessarily a complete listing of all penalties provided in the Insurance Article.

F. Severability. If any provision of any regulation or the application of the regulation to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the regulation which can be given effect without the invalid provision or application, and for this purpose the provisions of every regulation are declared to be separable.

G. Gender and Number. The use of a masculine form in any regulation is deemed to include the feminine form unless the contrary is explicitly stated or clearly implied. The use of the singular of any word in any regulation is deemed to include the plural unless the contrary is explicitly stated or clearly implied.

H. “Includes” or “including” means, unless the context requires otherwise, includes or including by way of illustration and not by way of limitation.

History

Administrative History: Effective date: June 20, 1970
Administrative History: Appendix “B” amended effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.01 to COMAR 31.01.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .03C amended effective May 23, 2005 (32:10 Md. R. 926)
Administrative History: Regulation .03H adopted effective January 1, 2003 (29:20 Md. R. 1591)
Administrative History: Regulation .04 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .05 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.01.01.04 Definitions Section Reference List.

| Definitions | Section | | --- | --- | | Admitted Assets | 5-101 | | Adviser | 10-201(b) | | Affiliate | 7-101(b) | | Alien Insurer | 1-101(c) | | Ancillary State | 9-201(b) | | Annuity | 1-101(d) | | Annuity Contract | 1-101(e) | | Association | 25-401(b) | | Attorney in fact | 3-212(a) | | Authorized Insurer | 1-101(g) | | Blanket Health Insurance | 15-305 | | Burial Insurance | 1-101(h) | | Casualty Insurance | 1-101(i) | | Commissioner | 1-101(k) | | Control | 7-101(c) | | Controlled by | 7-101(c) | | Controlling | 7-101(c) | | Covered Claim | 9-301(d) | | Delinquency Proceedings | 9-201(d) | | Domestic Insurer | 1-101(m) | | Domiciliary State | 9-201(e) | | Doing an Insurance Business in This State | 4-205(c) | | Essential Property Insurance | 25-401(d) | | Foreign Country | 9-201(f) | | Foreign Insurer | 1-101(n) | | Franchise Health Insurance, Employees | 15-1102(a) | | Fraternal Benefit Societies, Society | 8-402 | | General Assets | 9-201(g) | | Group Health Insurance | 15-302 | | Group Health Insurance, Employees | 15-302 | | Health Insurance | 1-101(p) | | Impaired Insurer | 9-201(h) | | Independent Insurance Producer | 1-101(q) | | Industrial Life Insurance | 1-101(r) | | Insurable Interest | 12-301 | | Insurance | 1-101(s) | | Insurance Business | 1-101(t) | | Insurance Holding Company | 7-101(d) | | Insurance Holding Company System | 7-101(e) | | Insurance Producer | 1-101(u) | | Insurer | 1-101(v) | | Life Insurance | 1-101(x) | | Life Insurer | 1-101(y) | | Lodge System | 8-402(b) | | Marine Insurance | 1-101(z) | | Mutual Insurer | 1-101(bb) | | Net Direct Written Premiums | 9-301(g) | | Person | 1-101(dd) | | Policy | 1-101(ee) | | Preferred Claims | 9-227(a) | | Premium | 1-101(ff) | | Premium Finance Agreement | 23-101(b) | | Premium Finance Company | 23-101(c) | | Premiums Written | 25-401(f) | | Property Insurance | 1-101(gg) | | Public Adjuster | 10-401(d) | | Qualified Jurisdiction | 5-901(d) | | Qualified United States Financial Institution | 5-901(e) | | Receiver | 9-201(j) | | Reciprocal Insurance | 1-101(hh) | | Reciprocal Insurer | 1-101(ii) | | Reciprocal State | 9-201(k) | | Reinsurance | 1-101(jj) | | Residents | 27-701 | | Representative Form of Government | 8-402(c) | | Secured Claim | 9-201(l) | | Special Deposit Claim | 9-201(m) | | State | 1-101(mm) | | State, Impaired Entities | 9-201(n) | | Stock Insurer | 1-101(nn) | | Subsidiary | 7-101(f) | | Surety Insurance | 1-101(oo) | | Title Insurance | 1-101(qq) | | Ultimate Controlling Person | 7-101(h) | | Unauthorized Insurer | 1-101(rr) | | Under Common Control With | 7-101(c) | | Unfair & Deceptive Acts or Practices in the Business of Insurance | 27-201 | | Unfair Methods of Competition | 27-201 | | Wet Marine and Transportation Insurance | 1-101(ss) | | Wholesale Life Insurance | 1-101(tt) |

Cross References

31.01.01.03C(1)

History

Administrative History: Effective date: June 20, 1970
Administrative History: Appendix “B” amended effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.01 to COMAR 31.01.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .03C amended effective May 23, 2005 (32:10 Md. R. 926)
Administrative History: Regulation .03H adopted effective January 1, 2003 (29:20 Md. R. 1591)
Administrative History: Regulation .04 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .05 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.01.01.05 Penalties Section Reference List.

| | Section | | --- | --- | | Annual Statement Filing—Penalty | 4-116 | | Insurance Producer—Fine in Lieu of Revocation, etc. | 10-126(c) | | Insurance Producer—Licenses | 10-131 | | Insurance Producer—License Revocation, etc. | 10-126 | | Insurance Producer—Restitution May Be Required | 10-126(d) | | Enforcement in Courts | 2-201 | | False Applications, etc. | 27-406 | | Fraternal Benefit Society, Domestic—Injunction, etc. | 8-464 | | Fraternal Benefit Society—License Revocation, etc. | 8-424(e) | | Fraternal Benefit Society—Misrepresentation | 8-468 | | General Criminal Penalty, Willful Violation | 1-301 | | Insurance Adviser—License Revocation, etc. | 10-212 | | Insurer—Certificate of Authority Revocation, etc. | 4-113, 8-424(e), 9-308(b) | | Insurer—Penalties in Lieu of Revocation, etc. | 4-113(d) | | Nonprofit Health Service Plans—License Revocation | 14-112 | | Nonprofit Health Service Plans—Criminal Penalties | 14-140 | | Premium Finance Registrations—Revocation & Fines | 23-208, 23-209 | | Rating Violation—Casualty & Surety Insurance | 11-232 | | Rating Violation—Property & Marine Insurance | 11-232 | | Rating Violation—Title Insurance | 11-409 | | Reciprocal Insurer—Certificate of Authority Revocation | 3-208 | | Rules and Regulations | 2-109(f) | | Surplus Lines—Broker's Licenses | 3-317 | | Surplus Lines—Evidence of Insurance—Misdemeanor | 3-326 | | Unauthorized Insurers Premium Penalty For Late Payment | 4-211 | | Unauthorized Insurers Act Violation | 4-212 | | Unauthorized Insurers Premium Penalty | 4-209 | | Undefined Unfair Trade Practices | 27-104 | | Unfair Claim Settlement Practices | 27-301—27-305 | | Unfair Trade Practices, Cease and Desist | 27-103 | | Witnesses and Evidence, Failure to Comply With Subpoena, Inquiry | 2-203 |

Cross References

31.01.01.03E

History

Administrative History: Effective date: June 20, 1970
Administrative History: Appendix “B” amended effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.01 to COMAR 31.01.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .03C amended effective May 23, 2005 (32:10 Md. R. 926)
Administrative History: Regulation .03H adopted effective January 1, 2003 (29:20 Md. R. 1591)
Administrative History: Regulation .04 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Administrative History: Regulation .05 amended effective May 23, 2005 (32:10 Md. R. 926); November 9, 2015 (42:22 Md. R. 1379)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

31.01.02 Emergency Powers

COMAR 31.01.02.01 Purpose.

The purpose of this chapter is to provide safeguards to consumers with respect to their dealings with entities licensed or registered to transact insurance business in the State in the event of:

A. A Governor-declared state of emergency;

B. A Presidential declaration of a major disaster or emergency declaration under the Federal Stafford Act; or

C. A national or public health emergency that within the Commissioner’s discretion affects the State that:

(1) Is issued:

(a) By the President of the United States under §201, 202(d) or 301 of the Federal National Emergencies Act; or

(b) By the Secretary of Health and Human Services under the Federal Public Health Service Act; and

(2) Is based on a serious threat to health resulting from the existence of a deadly agent as defined in Public Safety Article, §14-3A-01, Annotated Code of Maryland.

Cross References

31.01.02.05A

31.01.02.05C

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.02 Applicability.

A. This chapter applies to:

(1) Each insurer, nonprofit health service plan, health maintenance organization, and dental plan organization licensed to do business in Maryland;

(2) Each premium finance company registered to do business in Maryland; and

(3) Each pharmacy benefits manager registered to do business in Maryland.

B. This chapter also applies to the Maryland Automobile Insurance Fund (MAIF) and the Joint Insurance Association (JIA).

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) All Other Lines.

(a) “All other lines” means any line of business or coverage that is not included in any of the line/coverage definitions under this chapter for which claims attributable to a disaster subject to a data call were reported.

(b) “All other lines” does not include mortgage/financial guaranty, title, fidelity, surety, medical malpractice, or professional liability insurance lines of business.

(2) “Business interruption insurance” means insurance that covers the loss of income, continuing fixed expenses, or extra expenses a business suffers after a disaster while its facility is either closed because of the disaster or in the process of being rebuilt after the disaster.

(3) Case Incurred Loss.

(a) “Case incurred loss” means indemnity case reserves plus payments to date.

(b) “Case incurred loss” does not include estimates of incurred but not reported (IBNR) losses.

(4) “Casualty insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(5) Claims Closed with Payment.

(a) “Claims closed with payment” means all claims closed where a loss payment was made regardless of the date of loss or when the claim was received.

(b) “Claims closed with payment” does not include claims closed where loss adjustment expense was incurred but no payment to the insured was made.

(6) Claims Closed without Payment.

(a) “Claims closed without payment” means all claims closed where no loss payment was made regardless of the date of loss or when the claim was received.

(b) “Claims closed without payment” includes claims closed where loss adjustment expense was incurred but no payment to the insured was made.

(7) “Claims reported” means all claims reported regardless of whether a payment was made.

(8) “Closed claim” means a claim:

(a) That has been settled and the claimant has received a payment even if the claimant may receive additional payment or payments from the insurer if the claimant provides additional information to the insurer regarding replacement or other costs as they are incurred;

(b) For which the claimant has not received a payment because the amount is less than the deductible;

(d) That has been denied.

(9) “Commercial auto insurance” means liability and physical damage insurance that covers vehicles used for commercial purposes.

(10) “Commercial property” means all property not categorized as residential property.

(11) “Copayment” means a specified charge that a covered person pays each time services of a particular type or in a designated setting are received.

(12) “Deductible” means the amount of allowable charges that are incurred by an individual or family per year before a carrier begins payment.

(13) “Eligible individual” means an individual who:

(a) Enrolled in Medicare Part B while enrolled in the Maryland Medical Assistance Program;

(b) Remained in the Maryland Medical Assistance Program due to a suspension of terminations by the Maryland Medical Assistance Program during a state of emergency, and was not disenrolled until or terminated until at least 6 months following the effective date of enrollment in Part B of Medicare;

(c) Seeks to enroll in a Medicare supplement policy during the 63-day period following the later of notice of termination or disenrollment or the date of termination from the Maryland Medical Assistance Program; and

(d) Submits evidence of the date of termination or disenrollment from the Maryland Medical Assistance Program with the application for a Medicare supplement policy.

(14) “Farm owner's insurance” means insurance that provides liability coverage and coverage for damage to physical structures and other property located on a farm.

(15) “Health benefits” means a policy or certificate that includes benefits for hospital or medical services issued by a carrier.

(16) “Health carrier” means:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A dental plan organization.

(17) “Health insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(18) “Homeowner's insurance” means insurance for residential property provided under:

(a) A homeowner's policy;

(b) A condominium owner's policy;

(d) A renter's policy; or

(e) A noncommercial farm owner's policy.

(19) “Life insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(20) “Loss payment” means the portion of an incurred loss that is paid by the insurer.

(21) “Percentage of claims closed” means a percentage calculated as (claims closed with payment + claims closed without payment)/(claims reported).

(22) “Premium finance company” has the meaning stated in Insurance Article, §23-101, Annotated Code of Maryland.

(23) Private Passenger Auto Insurance.

(a) “Private passenger auto insurance” means liability and physical damage insurance that covers a vehicle driven for personal use.

(b) “Private passenger auto insurance” includes automobiles, motorcycles, and recreational vehicles.

(24) “Privately issued flood insurance” means specific insurance coverage against property loss from flooding under any policy or endorsement, issued by any entity other than the National Flood Insurance Program (NFIP).

(25) “Property insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(26) “Specified illness” means an illness, disease, virus, or infection for which:

(a) The Governor has declared or has renewed a declaration of a state of emergency for the State or an area within the State under Public Safety Article, §14-107, Annotated Code of Maryland;

(b) The President of the United States has issued a major disaster or emergency declaration for the State or an area within the State under the federal Stafford Act; or

(i) Issued by the President of the United States under §201, 202(d), or 301 of the Federal National Emergencies Act or by the Secretary of Health and Human Services under the Federal Public Health Service Act; and

(ii) Based on a serious threat to health resulting from the existence of a deadly agent as defined in Public Safety Article, §14-3A-01, Annotated Code of Maryland.

(27) Workers' Compensation Insurance.

(a) “Workers' compensation insurance” means insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue the employee's employer for the tort of negligence.

(b) “Workers” compensation insurance" includes associated employer's liability coverage.

Cross References

31.01.02.07C(6)

31.01.02.07C(7)

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.04 Disaster Contact Personnel.

A. Each insurer, nonprofit health service plan, and dental plan organization authorized to issue insurance contracts that provide health insurance, life insurance, property insurance, or casualty insurance in Maryland shall provide primary and backup contact information for individuals the Commissioner may contact in the event of a disaster or catastrophic event.

B. The information required under §A of this regulation shall also be provided by:

(1) Health maintenance organizations licensed to operate in Maryland;

(2) The Maryland Automobile Insurance Fund;

(3) The Joint Insurance Association; and

(4) Premium finance companies.

C. By April 15 of each year, each entity subject to §A or B of this regulation shall complete a questionnaire as specified by bulletin to provide the information required under §A or B of this regulation and information about the entity's disaster preparedness plans.

Cross References

31.01.02.05E(1)

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.05 Activation of Regulations.

A. If an event described in Regulation .01 of this chapter occurs, the Commissioner may activate one or more of the requirements specified in this chapter adopted under this regulation by issuing a bulletin specifying:

(1) That a specific requirement of the chapter is activated;

(2) The line or lines of business to which the activated requirement described in §A(1) of this regulation applies;

(3) The geographic areas to which the activated requirement described in §A(1) of this regulation applies; and

(4) The period of time for which the activated requirement described in §A(1) of this regulation applies.

B. A requirement activated under §A or E of this regulation may not:

(1) Apply beyond the geographic area included within the Governor's or President's declaration of a state of emergency or disaster; or

(2) Apply, except as otherwise authorized by §C of this regulation or by Insurance Article, §12-210 or 19-112, Annotated Code of Maryland, beyond the duration of the Governor’s or President’s declaration or renewal of a state of emergency.

C. A requirement activated under Regulation .01C of this chapter may not apply beyond the duration of the President’s or Secretary of Health and Human Services’ declaration of a national or public health emergency.

D. If a presidential disaster declaration is not accompanied by a declaration of a state of emergency by the Governor, a requirement activated under §A or E of this regulation may not remain in effect for more than 30 days of the presidential disaster declaration.

E. The Commissioner:

(1) Shall provide a copy of the bulletin to the disaster contact personnel identified pursuant to Regulation .04 of this chapter; and

(2) Shall, to the extent possible, post a copy of the bulletin on the Administration's website.

F. In addition to actions specifically set forth in this chapter, in the event of a state of emergency or emergency declaration, the Commissioner may take any other activity he considers necessary to protect the residents of the State.

Cross References

31.01.02.06A

31.01.02.06B

31.01.02.07A

31.01.02.07C

31.01.02.07E(1)

31.01.02.07G

31.01.02.08A

31.01.02.08B

31.01.02.08C

31.01.02.10A

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.06 Life and Health.

A. The bulletin issued by the Commissioner under Regulation .05 of this chapter may require health carriers to:

(1) Suspend health benefit cancellations and nonrenewals;

(2) Allow a provider in the geographic area to which the regulation applies to submit a claim for service provided 30 calendar days prior to the effective date of the regulation, up to 240 calendar days after the date the service was rendered;

(3) Waive any time restrictions on prescription medication refills and authorize payment to pharmacies for at least a 30-day supply of any prescription medication, regardless of the date upon which the prescription medication had most recently been filled by a pharmacist;

(4) Waive any restrictions on the time frame for the replacement of durable medical equipment or supplies, eyeglasses, and dentures;

(5) Except as provided in §§J and K of this regulation, waive any cost-sharing, including copayments, coinsurance, and deductibles, for any visit to diagnose or test for a specified illness, regardless of the setting of the testing (for example, an emergency room, urgent care center, or primary physician’s office);

(6) Except as provided in §§J and K of this regulation, waive any cost-sharing, including copayments, coinsurance, and deductibles, for laboratory fees to diagnose or test for a specified illness;

(7) Except as provided in §§J and K of this regulation, waive any cost-sharing, including copayments, coinsurance, and deductibles, for vaccination for a specified illness; and

(8) Except as provided in §§J and K of this regulation, waive any cost-sharing, including copayments, coinsurance, and deductibles, for treatment for a specified illness.

B. A health carrier may cancel or refuse to renew any health benefits if all premiums due are not paid within 60 calendar days following the date the bulletin issued pursuant to Regulation .05D of this chapter expires.

C. The effective date of cancellation or refusal to renew pursuant to §B of this regulation is the date the health carrier was originally permitted to take such action after the expiration of any applicable grace period.

D. The Commissioner may extend any time frames required for processing claims for a health carrier if the health carrier requests an extension in writing and demonstrates the legitimate reason for the business disruption to the Commissioner.

E. The Commissioner may suspend the requirement to pay interest on claims as required by Insurance Article, §15-1005, Annotated Code of Maryland, if the health carrier requests such suspension in writing and demonstrates to the Commissioner a legitimate reason for the suspension of the requirement to pay interest.

F. The Commissioner may require a health carrier to make a claims payment for treatment for a specified illness that the health carrier has denied as experimental or investigational.

G. A health carrier shall evaluate a request to use an out-of-network provider to perform diagnostic testing of a specified illness solely on the basis of whether the use of the out-of-network provider is medically necessary or appropriate.

H. Subject to §M of this regulation, the only prior authorization requirements a health carrier may utilize relating to testing for a specified illness shall relate to the medical necessity of that testing.

I. An adverse decision on a request for coverage of diagnostic services for a specified illness shall be considered an emergency case for which an expedited grievance procedure is required under Insurance Article, §15-10A-02, Annotated Code of Maryland.

J. The requirements of §A(5)—(8) of this regulation do not apply to a Medicare supplement policy as defined by Insurance Article, §15-901(k), Annotated Code of Maryland.

K. A carrier is not required to waive the deductible for an insured covered under a high deductible health plan, as defined in 26 U.S.C. §223, if the waiver of the deductible would disqualify the plan from being considered a high deductible health plan under federal law.

L. The Commissioner may require pharmacy benefits managers and health carriers to suspend random audits, including but not limited to in-person or “desk” audits, of pharmacies unless there is a reasonable suspicion of fraud.

M. The Commissioner may require health carriers to suspend, waive, or modify requirements related to prior authorizations, concurrent review, retrospective review, and notification of inpatient acute care, post-discharge care, and facility transfers.

N. With respect to an eligible individual, a carrier may not:

(1) Deny or place a condition on the issuance or effectiveness of a Medicare supplement policy that is offered and is available for issuance to new enrollees by the issuer;

(2) Discriminate in the pricing of a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition; or

(3) Impose an exclusion of benefits based on a preexisting condition under a Medicare supplement policy.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.07 Property and Casualty.

A. The bulletin issued by the Commissioner under Regulation .05 of this chapter may require insurers authorized in the State who write property and casualty insurance, the Maryland Automobile Insurance Fund, and the Joint Insurance Association to:

(1) Suspend policy cancellations and nonrenewals;

(2) Extend the time periods for completion of repairs to an affected property in the event that repairs necessitated by the disaster or catastrophic event cannot be completed within the time period required under the policy;

(3) Provide any or all of the data listed in §C of this regulation in a manner required by the Commissioner in the bulletin;

(4) Implement a grace period of up to 60 days for the receipt of premium payments from customers prior to cancellation of policies;

(5) Suspend the obligation of title insurers to conduct on-site reviews of each of its title insurance producers appointed as principal agents within the calendar year pursuant to COMAR 31.04.22.04, provided that the process and procedures for conducting virtual audits are submitted to, and deemed adequate by, the Commissioner;

(6) Suspend the requirements under Insurance Article, §8-210, Annotated Code of Maryland, for an insurer to conduct an on-site review of the underwriting and claims processing operations of its managing general agent;

(7) Suspend the requirement under Insurance Article, §8-520, Annotated Code of Maryland, for a reinsurer to conduct on-site review of the underwriting and claims processing operations of the reinsurance manager; and

(8) On request of the Commissioner, provide any additional information that the Commissioner determines is necessary because of the nature of the emergency.

B. If a company is unable to provide all of the information required by the Commissioner under this regulation, the company shall provide the Commissioner with a detailed explanation of why it is unable to provide the information and state what information the company can provide.

C. By a bulletin issued under Regulation .05 of this chapter, the Commissioner may require authorized insurers, the Maryland Automobile Insurance Fund, and the Joint Insurance Association to provide any or all of the following information:

(1) NAIC group number and group name, or in the alternative, NAIC company number and company name (list all companies that are included in the group);

(2) Name of person to contact with any questions;

(3) Mailing address of contact person;

(4) Email address of contact person;

(5) Phone number of contact person;

(6) For each line of insurance defined in Regulation .03 of this chapter and all other lines, the following information by zip code or by county:

(a) Number of claims received;

(b) Amount paid on claims to date (indicate whether this amount includes amounts reserved for claims);

(d) Number of claims closed without payment;

(e) Case incurred loss;

(f) Percentage of claims closed; and

(g) Average time it took to close a claim (aging should begin the date the claim is reported);

(7) For each line of insurance defined in Regulation .03 of this chapter and all other lines, the following information on a Statewide basis:

(a) Total number of Maryland claims received;

(b) Amount paid on Maryland claims to date (indicate whether this amount includes amounts reserved for claims);

(d) Number of Maryland claims closed without payment;

(e) Maryland case incurred loss; and

(f) Percentage of Maryland claims closed; or

(8) Specify what lines the company has included in all other lines.

D. Reporting Instructions.

(1) Losses under business interruption insurance shall be reported under “business interruption insurance” and not under “commercial property insurance”.

(2) Experience for vehicles covered by commercial auto insurance shall be consistent with data reported on lines 19.3, 19.4, and 21.2 of the P&C annual statement.

(3) Experience for flood coverage provided as an additional peril without endorsement under a residential or commercial property policy may be included with the associated property policy.

(4) Experience for vehicles covered by private passenger auto insurance shall be consistent with data reported on lines 19.1, 19.2, and 21.1 of the P&C annual statement.

(5) Experience for workers’ compensation insurance shall be consistent with data reported on line 16 of the P&C annual statement.

E. If the Commissioner requires suspension of policy cancellations and nonrenewals, a property and casualty insurer, the Maryland Automobile Insurance Fund, or the Joint Insurance Association may cancel or refuse to renew any policy, after proper notice is issued, if:

(1) All premiums due are not paid within 60 calendar days after the date of the expiration of the bulletin enacted pursuant to Regulation .05 of this chapter; or

(2) The policy would have been lawfully cancelled or nonrenewed for reasons other than nonpayment of premium if not for the suspension of all policy cancellations or nonrenewals.

F. Data supplied to the Commissioner under §A(3) of this regulation is confidential commercial data protected under State Government Article, §10-617(d), Annotated Code of Maryland, except when aggregated with data from all other insurers in a manner that does not permit any individual company information to be identified.

G. A property and casualty insurer, the Maryland Automobile Insurance Fund, or the Joint Insurance Association may deduct any premium payments past due from a claim payment made to the insured under the insurance policy from the effective date of the bulletin issued pursuant to Regulation .05 of this chapter until 60 calendar days after the expiration of the bulletin.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.08 Premium Finance Companies.

A. The bulletin issued by the Commissioner under Regulation .05 of this chapter may require every premium finance company registered to do business in this State to:

(1) Suspend cancellations of insurance policies for nonpayment of funds due under the premium finance agreement;

(2) Grant affected persons an extension of any and all contractual provisions or other requirements that impose a time limit for an insured to perform any act including the payment of funds; and

(3) Waive additional interest, penalties, fees, or other charges accrued or assessed as the result of the extension required herein.

B. A premium finance company may cancel prospectively, after appropriate notice is issued, any policy if all payments due under the premium finance agreement are not paid within 60 calendar days after the date of the expiration of the bulletin issued pursuant to Regulation .05 of this chapter.

C. A premium finance company may not cancel any insurance policy for failure of the insured to pay interest, penalties, or other charges until 60 calendar days after the date of the expiration of the bulletin issued pursuant to Regulation .05 of this chapter.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.09 Notification of Actions Taken to Implement Regulations.

A. To the extent that an entity subject to Regulation .04A or B of this chapter establishes procedures specific to a disaster or emergency event for consumers to use, such as specific contact phone numbers, the entity may use alternative forms of communication to notify consumers of these procedures.

B. Examples of alternative forms of communication referenced in §A of this regulation include, but are not limited to:

(1) Press releases;

(2) Public service announcements;

(3) Placing information in local newspapers; and

(4) Posting information on the carrier's website.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

COMAR 31.01.02.10 Deadlines.

A. The bulletin issued by the Commissioner under Regulation .05 of this chapter may extend the statutorily imposed deadline for submissions to the Administration by up to 30 days. These submissions may include:

(1) Requests for hearings;

(2) Premium increase protests;

(3) Other complaints;

(4) Exceptions to Office of Administration Hearing opinions; or

(5) Responses to Insurance Article, §27-1001, Annotated Code of Maryland, complaints.

B. The Commissioner may extend statutory deadlines imposed on the Administration as deemed necessary by the Commissioner during the state of emergency provided the Governor has agreed to extend such statutory requirements and provided the Commissioner affords notice of the extension consistent with this chapter.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Administrative History: Regulation .01 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .02A amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .02A amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .02B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .03B amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired August 31, 2020
Administrative History: Regulation .03B amended as an emergency provision affective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .03B amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .04B amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .05 amended effective December 12, 2022 (49:25 Md. R. 1052)
Administrative History: Regulation .06 amended as an emergency provision affective March 9, 2020 (47:7 Md. R. 382); emergency provision expired April 27, 2020
Administrative History: Regulation .06 amended as an emergency provision effective April 28, 2020 (47:11 Md. R. 557); emergency provision expired August 31, 2020
Administrative History: Regulation .06 amended as an emergency provision effective September 1, 2020 (47:20 Md. R. 872); adopted permanently effective December 28, 2020 (47:26 Md. R. 1108)
Administrative History: Regulation .06F amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .07 amended effective July 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .07A amended effective November 29, 2021 (48:24 Md. R. 1025)
Administrative History: Regulation .10 adopted effective November 29, 2021 (48:24 Md. R. 1025)
Authority: Health-General Article, §19-706; Insurance Article, §2-115; Annotated Code of Maryland

31.02.01 Hearings

COMAR 31.02.01.01 Scope.

A. In General. This chapter applies to all contested case hearings:

(1) Heard by the Administration; or

(2) Delegated by the Administration to the Office of Administrative Hearings under State Government Article, §10-205, Annotated Code of Maryland.

B. Except as provided in this chapter, COMAR 28.02.01 governs the conduct of a hearing before the Office of Administrative Hearings.

C. Exclusions. This chapter does not apply to the consideration of rates or contracts, the adoption of regulations, or other quasi-legislative hearings.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Administrative complaint” means a document that:

(a) Is received by the Commissioner from any person; and

(b) Alleges a violation of:

(i) A law or regulation enforced by the Commissioner; or

(ii) An order issued by the Commissioner.

(3) Contested Case.

(a) “Contested case” has the meaning stated in State Government Article, §10-202(d), Annotated Code of Maryland.

(b) “Contested case” includes a proceeding:

(i) Arising out of a determination made by the Commissioner;

(ii) Arising out of a charging document, order, or notice issued by the Commissioner;

(iii) Regarding a license, certificate, registration, or special permit;

(iv) On a proposed examination report; or

(v) Arising out of any other act of, threatened act of, or failure to act by the Commissioner that aggrieves a person.

(i) A hearing on the approval or disapproval of a rate filing or a form filing; or

(ii) Any other quasi-legislative hearing.

(4) Determination.

(a) “Determination” means a decision by the Commissioner that requires the Commissioner to provide the opportunity for a hearing to a person aggrieved by the decision under Insurance Article, §2-210, Annotated Code of Maryland.

(b) “Determination” includes:

(i) A decision as to whether a person against whom an administrative complaint has been received violated a law, regulation, or order; and

(ii) An order issued under Insurance Article, §2-204, Annotated Code of Maryland.

(5) Examination Report.

(a) “Examination report” means a report of the examination of:

(i) An authorized insurer, management company of an authorized insurer, subsidiary owned or controlled by an authorized insurer, rating organization, or authorized health maintenance organization that is subject to examination under Insurance Article, §2-205, Annotated Code of Maryland;

(ii) An insurance producer, surplus lines broker, general agent, adjuster, public adjuster, adviser, or other person that is subject to examination under Insurance Article, §2-206, Annotated Code of Maryland;

(iii) An accredited reinsurer that is subject to examination under Insurance Article, Title 5, Subtitle 9, Annotated Code of Maryland;

(iv) A third party administrator that is subject to examination under Insurance Article, §8-319, Annotated Code of Maryland;

(v) A fraternal benefit society that is subject to examination under Insurance Article §8-461 or 8-462, Annotated Code of Maryland;

(vi) An accepted fronting reinsurer that is subject to examination under Insurance Article, §13-116, Annotated Code of Maryland;

(vii) A nonprofit health service plan that is subject to examination under Insurance Article, §14-125, Annotated Code of Maryland;

(viii) A dental plan organization that is subject to examination under Insurance Article, §14-411, Annotated Code of Maryland;

(ix) A private review agent that is subject to examination under Insurance Article, §15-10B-19, Annotated Code of Maryland;

(x) A premium finance company that is subject to examination under Insurance Article, §23-103, Annotated Code of Maryland;

(xi) A managed care organization that is subject to examination under Health-General Article, §15-102.3, Annotated Code of Maryland;

(xii) A provider-sponsored organization that is subject to examination under Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland;

(xiii) The Chesapeake Employers’ Insurance Company, which is subject to examination under Insurance Article, §24-304(e)(1), Annotated Code of Maryland; or

(xiv) Any other person that is subject to examination by the Commissioner under any other provision of law.

(b) “Examination report” includes:

(i) A financial examination report; and

(ii) A market conduct examination report.

(6) “Hearing officer” means:

(a) The Maryland Insurance Commissioner or the Commissioner's authorized designee under Insurance Article, §2-210(d), Annotated Code of Maryland; or

(b) An administrative law judge.

(7) “Licensee” means a person holding a certificate of authority, license, registration, or special permit issued by the Administration or who has other similar authority to operate under the regulatory authority of the Administration.

(8) “Office” means the Office of Administrative Hearings.

(9) “Proposed examination report” means an examination report that:

(a) The Commissioner mails to the person examined:

(i) At the conclusion of an examination; and

(ii) Before filing the examination report; and

(b) Informs the person being examined of the person's right to request a hearing pursuant to Regulation .04C of this chapter.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.03 Request for a Hearing — In General.

A. Scope. This regulation applies to all requests for a hearing except a request for a hearing on a proposed examination report.

B. A person may request a hearing under Insurance Article, §2-210(a)(2), Annotated Code of Maryland, by submitting a written statement to the Commissioner, signed by the requesting person.

C. Request to be Received Within 30 Days.

(1) The request shall be received by the Commissioner within 30 days of the date of the letter notifying the party of the Commissioner's action, intention to act, or failure to act.

(2) In calculating the 30-day period, the date of the letter notifying the party of the Commissioner's action, intention to act, or failure to act is not included.

(3) The end of a day is considered to be 11:59 p.m. Eastern Time.

(4) The last day of the 30-day period is included unless it is a Saturday, Sunday, legal holiday, or a day that the Administration is closed for a part of the day.

(5) If the last day of the 30-day period is a Saturday, Sunday, legal holiday, or a day that the Administration is closed for a part of the day, the 30-day period runs until the end of the next day which is not a Saturday, Sunday, legal holiday, or a day that the Administration is closed for a part of the day.

(6) Intermediate Saturdays, Sundays, legal holidays, and days that the Administration is closed for a part of the day shall be counted toward the 30-day period.

D. The request shall include the following information:

(1) The action or non-action of the Commissioner causing the person requesting the hearing to be aggrieved;

(2) The facts related to the incident or incidents about which the person requests the Commissioner to act or not to act; and

(3) The ultimate relief requested.

E. Upon receipt of a proper request, the Commissioner shall grant a hearing unless:

(1) In viewing the facts set forth by the person making the request, in the light most favorable to that person, the Commissioner has no authority to take action;

(2) The Commissioner determines that the request is frivolous or made in bad faith;

(3) The request does not contain the information required by these regulations;

(4) The request is untimely; or

(5) At the end of the Commissioner's review, the request is moot.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.04 Request for a Hearing — Proposed Examination Reports.

A. Scope. This regulation applies to a request for a hearing on a proposed examination report.

B. Proposed Examination Report.

(1) At least 30 days before filing a proposed examination report, the Commissioner shall mail a copy of the proposed examination report to the person that was examined.

(2) If the Commissioner intends to impose a fine or other penalty or require restitution or other remedy as a result of the findings of the proposed examination report, the Commissioner may include with the proposed examination report:

(a) The amount of the fine;

(b) The amount or nature of the restitution; and

C. Request for Hearing. The person being examined may request a hearing on a proposed examination report by submitting a written request to the Commissioner within 30 days after the proposed examination report is received by the person.

D. Contents of Hearing Request. The hearing request shall include exceptions to the proposed examination report that:

(1) Specifically identify:

(a) The factual assertions in the proposed examination report that the person is challenging; and

(b) Any errors of law that the person contends are contained in the proposed examination report;

(2) State the nature of the relief that the person is demanding; and

(3) State the grounds for relief that the person is demanding.

E. Procedure Following Hearing Request. If the Commissioner receives a request for a hearing on a proposed examination report within the 30-day period, the Commissioner:

(1) Shall grant a hearing on the exceptions to the proposed examination report; and

(2) May not file the proposed examination report until after:

(a) The hearing is held; and

(b) The Commissioner makes any modifications to the proposed examination report that the Commissioner considers proper.

Cross References

31.02.01.02B(9)(b)

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.04-1 Delegation of Authority.

A. The Commissioner may, on a case-by-case basis, delegate to the Office the authority to:

(1) Conduct a contested case hearing; and

(2) Issue:

(a) Proposed or final findings of fact;

(b) Proposed or final conclusions of law;

(d) A proposed or final order.

B. The Commissioner may revoke all or part of a delegation of authority to the Office to preside over a hearing if:

(1) The case:

(a) Involves novel or unanticipated factual or legal issues;

(b) Has significant social, fiscal, or legal issues;

(d) Requires further investigation; or

(2) The Commissioner determines that revocation of all or part of the delegation of authority is otherwise in the public interest.

C. Procedure for Revocation.

(1) The Commissioner shall provide written notice of a revocation of hearing authority to all parties and the Office.

(2) The written notice shall contain a brief statement of the reason for the revocation.

(3) Delegation of authority to hear a contested case may be revoked at any time before the earlier of the:

(a) Issuance of a ruling by the administrative law judge on a substantive issue; or

(b) Taking of oral testimony from the first witness.

(4) The Commissioner shall specify whether all or part of the delegation to hear a contested case has been revoked.

(5) If only part of the delegation has been revoked, the Commissioner shall specify in the written notice of revocation the portions of the contested case for which the delegation has been revoked.

(6) On revocation of the delegation, the Commissioner shall:

(a) Refer the contested case for further investigation;

(b) Set the contested case for a hearing with the Commissioner or the Commissioner's designee acting as the hearing officer; or

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.05 Service of Notices, Decisions, Orders, and Other Documents.

A. The Administration or the Office shall provide notice of a hearing pursuant to State Government Article, §10-209, Annotated Code of Maryland.

B. Notices, decisions, orders, and other documents issued by the Administration or the Office may be served on a person by:

(1) Personal delivery to the person;

(2) Mailing a copy of the document, first class, postage prepaid, to the person's address of record on file with the Administration;

(3) Mailing a copy of the document, first class, postage prepaid, to the person's last known address if different from the person's address of record on file with the Administration;

(4) Mailing a copy of the document by certified mail to the person's address of record on file with the Administration or last known address; or

(5) Delivering or mailing a copy of the document, first class, postage prepaid, to the person's attorney, if the person is represented by counsel.

C. Notice of a hearing is sufficient:

(1) If the initial notice of a hearing is sent by regular mail to a party at the party's business and resident addresses on file with the Commissioner in accordance with Insurance Article, §§10-111(a)(4) and 10-117, Annotated Code of Maryland; and

(2) Upon a satisfactory showing that the notice was sent not less than 30 calendar days before the hearing, unless a different time period is required by law.

D. A record shall be maintained stating:

(1) To whom the initial notice was sent;

(2) The address to which the initial notice was sent;

(3) The date the initial notice was sent;

(4) The manner of service; and

(5) The name of the person who sent the initial notice.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.05-1 Discovery.

A. By written request served on other parties and filed with the hearing officer not later than 20 days before the scheduled hearing, a party may require any other party to produce, within 15 days, for inspection or copying, any file, memorandum, correspondence, document, object, or tangible thing:

(1) Relevant to the subject matter of the case; and

(2) Not privileged.

B. Unless provided by agreement of the parties, no other discovery procedure is allowed.

C. Copies.

(1) Copies of requested documents and records shall be made at the expense of the party making the request.

(2) The charge for copies of requested documents and records may be waived by the custodian of the documents in accordance with State Government Article, §10-621(e), Annotated Code of Maryland, or other applicable law.

D. Objection to Production.

(1) A party may object to the production of a file, memorandum, correspondence, document, object, or tangible thing by filing a motion to quash discovery or for other relief.

(2) The hearing officer, for cause shown, may issue any order that justice requires to protect the party from annoyance, embarrassment, oppression, or undue burden or expense.

E. A party who has responded to a request for production and who obtains or discovers, before the hearing, additional files, memoranda, correspondence, documents, objects, or tangible things that are relevant to the request for production shall supplement the response to the request promptly.

F. As sanction against a party that fails to comply with a request for production, the hearing officer, either on the hearing officer's own motion or by motion of the party requesting the production, may issue an order:

(1) Refusing to allow the party to support or oppose designated claims or defenses;

(2) Prohibiting the party from introducing designated matters into evidence;

(3) Striking any allegations or charges made by the party failing to produce;

(4) Staying further proceedings until the discovery is provided; or

(5) Dismissing the action or any part of it.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.06 Subpoenas.

A. On request of a party, the Administration may issue subpoenas requiring the attendance and testimony of witnesses and the production, at the hearing, of any tangible items in the possession or under the control of a witness.

B. Subpoena Requests.

(1) A request for a subpoena shall:

(a) Be made, in writing, to the Administration; and

(b) Specify the:

(i) Name and full address of the person to be subpoenaed; and

(ii) Name, full address, and telephone number of the party requesting the subpoena.

(2) A subpoena that requests the production of tangible items, books, papers, or other documents shall describe those items with particularity.

(3) A subpoena request need not be served on all parties.

C. Service of Subpoenas.

(1) The party requesting the subpoena shall be responsible for proper service of the subpoena.

(2) Except as provided in §C(3) of this regulation, subpoenas shall be served by hand delivery by an individual 18 years old or older who is not a party to the proceeding by delivering a copy to the person named or to an agent authorized by appointment or by law to receive service for the person named or as permitted by Rule 2-121(a)(3)of the Maryland Rules of Civil Procedure. Service of a subpoena upon a party represented by an attorney may be made by service upon the attorney under Rule 1-321(a) of the Maryland Rules of Civil Procedure.

(3) In a case where the licensee to be served resides out of Maryland, the subpoena may be served by certified mail.

D. Return of service shall be made by:

(1) Affidavit, if hand delivered; or

(2) Return receipt, if mailed.

E. A person may object to a subpoena by filing a motion to quash or for other relief.

F. If a request for a subpoena was filed less than 15 days before the hearing date, the hearing officer may refuse to postpone the hearing based on the party's inability to serve the subpoena.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.07 Conduct of Hearing — In General.

A. Scope. This regulation applies to all hearings except a hearing on a proposed examination report.

B. A hearing conducted under this chapter shall be open to the public.

C. Parties to Contested Case Proceeding.

(1) The necessary parties to a contested case proceeding are:

(a) The Administration;

(b) A person against whom the Commissioner has:

(i) Received an administrative complaint; or

(ii) Issued a charging document, order, or notice; and

(i) A determination made by the Commissioner; or

(ii) Any other act of, threatened act of, or failure to act by the Commissioner.

(2) A person who is not a necessary party under §C(1) of this regulation, including a person who submitted an administrative complaint to the Commissioner, may become a party by intervention in accordance with Insurance Article, §2-213(c), Annotated Code of Maryland.

(3) Election by Administration Not to Participate.

(a) The Administration may elect not to participate in all or part of a contested case proceeding by filing a notice with the hearing officer or final decision maker at any time.

(b) The Administration may revoke an election not to participate in all or part of a contested case proceeding by filing a notice with the hearing officer or final decision maker at any time.

D. The hearing officer shall conduct the hearing and may allow the case to proceed in a manner necessary to ensure the fair resolution of the issues including, but not limited to:

(1) Placing reasonable limitations on the number of witnesses a party may call;

(2) Excluding evidence which is repetitive, irrelevant, immaterial, or otherwise not probative; and

(3) Ruling on all procedural matters, including motions, objections, and offers of proof.

E. Formal rules of pleading or evidence need not be observed at a hearing under the provisions of this regulation.

F. Representation of the Administration.

(1) The Commissioner may designate an attorney to represent the Administration.

(2) Once the record is closed by the hearing officer, the attorney who represented the Administration may not have a further role in the decision process of the Administration.

G. Motion for Summary Decision.

(1) A party may move for summary decision on any appropriate issue in the case.

(2) A hearing officer may grant a proposed or final summary decision if the hearing officer finds that:

(a) There is no genuine issue of material fact; and

(b) A party is entitled to prevail as a matter of law.

H. The Maryland Rules of Civil Procedure may be used as a guide for resolving issues regarding the conduct of the hearing.

Cross References

31.02.01.10B(2)

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.08 Conduct of Hearing — Proposed Examination Reports.

A. Scope. This regulation applies to a hearing on a proposed examination report.

B. Burden of Proof. At a hearing under this regulation:

(1) The proposed examination report is part of the record; and

(2) The party that requested the hearing on the proposed examination report has the burden of going forward and the burden of proving its exceptions to the proposed examination report.

C. Rights of Parties.

(1) Subject to §C(2) of this regulation, the hearing officer shall allow a party to a hearing under this regulation to:

(a) Appear in person and be represented by counsel;

(b) Be present while evidence is given;

(i) Inspect all documentary evidence that is offered for introduction into the record; and

(ii) Examine witnesses during the course of the hearing; and

(d) Present evidence.

(2) The hearing officer shall conduct the hearing and allow the case to proceed in a manner necessary to ensure the fair resolution of the issues including, but not limited to:

(a) Placing reasonable limitations on the number of witnesses a party may call;

(b) Excluding evidence that is repetitive, irrelevant, immaterial, or otherwise not probative; and

D. Formal rules of pleading or evidence need not be observed at a hearing under provisions of this regulation.

E. Representation of the Administration.

(1) The Commissioner may designate an attorney to represent the Administration.

(2) Once the record is closed by the hearing officer, the attorney who represented the Administration may not have a further role in the decision process of the Administration.

F. Motion for Summary Decision.

(1) A party may move for summary decision on any appropriate issue in the case.

(2) A hearing officer may grant a proposed or final summary decision if the hearing officer finds that:

(a) There is no genuine issue of material fact; and

(b) A party is entitled to prevail as a matter of law.

G. The Maryland Rules of Civil Procedure may be used as a guide for resolving issues regarding the conduct of the hearing.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.09 Postponements.

A. At the discretion of the hearing officer, a hearing may be postponed if a written request for postponement is filed with the Administration or the Office not later than 15 days before the date of the hearing.

B. A hearing may not be postponed, except for good cause, when the request for postponement is filed within 15 days of the date of the hearing.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.09-1 Decision by an Administrative Law Judge.

A. Scope. This regulation applies to a contested case where the Office has been delegated authority to conduct a contested case hearing under Regulation .04-1A of this chapter.

B. Contents. The administrative law judge who hears a case shall submit to the Commissioner a decision that contains whichever of the following were authorized in the Commissioner's delegation of authority to the Office for the case:

(1) Proposed or final findings of fact;

(2) Proposed or final conclusions of law;

(3) Proposed or final findings of fact and conclusions of law; or

(4) A proposed or final order.

C. Effect of Regulations, Bulletins, Final Orders, and Preexisting Policies. Except as provided in Regulation .10-2H of this chapter, in making a decision, the administrative law judge is bound by any regulation, bulletin, final order, or settled and preexisting policy of the Commissioner to the same extent that the Commissioner is or would have been bound if the Commissioner were hearing the case.

D. Distribution of Decision. The Office shall send the administrative law judge's decision directly to the parties and the Commissioner.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.10 Default Orders.

A. This regulation does not apply to unauthorized insurers.

B. A hearing officer may issue a default order against a party other than the Administration that, after receiving proper notice, fails to appear at a hearing if:

(1) In a hearing arising out of a charging document, order, or notice issued by the Commissioner, the party failing to appear is the person against whom the charging document, order, or notice was issued;

(2) In a hearing arising out of a determination involving an administrative complaint, the party failing to appear is a necessary party under Regulation .07C of this chapter; or

(3) In any other contested case hearing, the party failing to appear is the person that requested the hearing.

C. In a hearing arising out of a charging document, order, or notice issued by the Administration, the default order shall:

(1) State the facts supporting the finding of proper notice to the person against whom the charging document, order, or notice was issued;

(2) Adopt the facts and violations of law as alleged by the Administration in its charging document, order, or notice as if by admission of the person against whom the charging document, order or notice was issued; and

(3) Adopt the sanction requested by the Administration at the hearing.

D. In a hearing arising out of a determination, including a determination involving an administrative complaint, the hearing officer shall:

(1) If the nondefaulting party is requesting that the determination be upheld, issue a default order that:

(a) States the facts supporting the finding of proper notice to the party failing to appear; and

(b) Upholds the determination; or

(2) If the nondefaulting party is requesting that the determination be reversed or modified:

(a) Allow the party to present its case as to why the determination should be reversed or modified; and

(b) Issue a default order that:

(i) States the facts supporting the finding of proper notice to the party failing to appear;

(ii) Makes any appropriate findings of fact or law; and

(iii) Orders relief as appropriate under the relevant provisions of the Health-General Article or Insurance Article, Annotated Code of Maryland.

E. In a hearing on a proposed examination report, the default order shall:

(1) State the facts supporting the finding of proper notice to the person that was examined;

(2) Adopt the facts and violations of law as alleged by the Administration in the proposed examination report as if by admission of the person that was examined; and

(3) Adopt the sanctions included with the proposed examination report.

F. The hearing officer shall serve the default order directly on the parties by certified mail.

G. Within 15 days after service of a default order, the party in default may submit to the hearing officer a written motion:

(1) Requesting that the default order be vacated or modified; and

(2) Stating the grounds for the request.

H. If the hearing officer finds that there is:

(1) Good cause to excuse the default, the hearing officer may:

(a) Vacate or modify the default order, and

(b) Schedule the case for further appropriate proceedings; or

(2) Not good cause to excuse the default, the Commissioner shall:

(a) Deny the motion, and

(b) Affirm the default order as the final order.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.10-1 Exceptions.

A. Scope. This regulation applies to a contested case where the Office has been delegated authority to issue proposed findings of fact, proposed conclusions of law, or a proposed order.

B. On receipt of a decision that contains proposed findings of fact, proposed conclusions of law, or a proposed order, the parties affected have:

(1) 20 days after receipt to file exceptions to the proposed findings of fact, proposed conclusions of law, or proposed order with the Commissioner; or

(2) 10 days to:

(a) File a written request for a transcript with the Commissioner in order to file exceptions; or

(b) File with the Commissioner a copy of that party's written request to its private stenographer for the party's preparation of a transcript based on its own record of the testimony in order to file exceptions.

C. Receipt under §B of this regulation is presumed to occur 3 days after the mailing of the proposed findings of fact, proposed conclusions of law, or a proposed order.

D. Filing Exceptions After Receipt of Transcript.

(1) If a party requests a transcript under §B(2) of this regulation, the party shall have 30 days after the filing of the transcript to file exceptions with the Commissioner.

(2) Unless extended by order of the Commissioner, the party requesting the transcript shall file the transcript with the Commissioner within 60 days after the date on which the transcript was requested.

E. Exceptions shall be in writing unless specified otherwise by the final decision maker.

F. If a party elects not to file exceptions, another party may not raise the defense of failure to exhaust this administrative remedy on appeal to circuit court.

G. The record before the Commissioner for the exceptions shall consist of:

(1) The administrative law judge's findings and conclusions, including the findings of fact, conclusions of law, and proposed order;

(2) Any exceptions filed by a party;

(3) Any response to exceptions filed by a party;

(4) Any evidence submitted by a party;

(5) Notice to the parties of the hearing;

(6) Any documentary evidence admitted into evidence by the administrative law judge; and

(7) The transcript of the hearing before the administrative law judge, if requested and filed by one of the parties or the Commissioner.

H. Transcripts.

(1) A party who desires to have the transcript made part of the record shall, at the party's own expense, file three copies of the transcript, or its relevant portions, with the Commissioner on receipt of the transcript.

(2) If a transcript has already been prepared, the Commissioner shall make the transcript part of the record in the contested case.

(3) If a transcript is prepared based on the Office's record of the testimony and a transcript is prepared based on a party's own record of the testimony, the transcript based on the Office's record of the testimony is:

(a) The official transcript; and

(b) Controlling in the event of any conflict between the two transcripts.

(4) If the transcript is not filed or otherwise made part of the record in the contested case, parties may not refer in their exceptions to any testimony before the administrative law judge not incorporated into the administrative law judge's findings and conclusions.

(5) If all parties agree that the questions presented for review to the final decision maker can be determined without an examination of the entire transcript, the parties may file a statement showing how the questions arose and setting forth the facts or allegations that are essential to a determination of those issues.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.10-2 Final Order following Proposed Decision.

A. Scope. This regulation applies to a contested case where the Office has been delegated authority to issue proposed findings of fact, proposed conclusions of law, or a proposed order.

B. Issuance. After consideration of the administrative law judge's proposed findings of fact, proposed conclusions of law, or proposed order, and any exceptions filed by the parties, the Commissioner shall issue a final order or a remand order.

C. Effect of Proposed Findings of Fact, Proposed Conclusions of Law, and Proposed Order. In reviewing the administrative law judge's proposed findings of fact, proposed conclusions of law, or proposed order, the Commissioner is:

(1) Bound by the findings of fact that are supported by competent, material, and substantial evidence; and

(2) Not bound by any legal analysis, proposed conclusions of law, or proposed order.

D. Types of Action by the Commissioner. The Commissioner may affirm, reverse, or modify the proposed findings of fact, proposed conclusions of law, or proposed order, or remand the case to the Office for further proceedings by setting forth, with particularity, the basis for the Commissioner's reversal, modification, or remand.

E. Procedure When Case Remanded. If the Commissioner remands the case for further proceedings, the Commissioner may:

(1) Refer the case back to the Office; or

(2) Retain the case to be heard by the Commissioner.

F. Rehearing. The Commissioner may, on the Commissioner's own motion, hold a rehearing.

G. Service of Order. The Commissioner shall serve a copy of the final order or remand order on the parties, the parties' attorneys of record, and the Office by first-class mail.

H. Effect of Summary Affirmance.

(1) If the Commissioner issues a final order that summarily affirms the proposed order of an administrative law judge without discussing the facts and legal issues and without expressly adopting the administrative law judge's legal analysis and proposed conclusions of law, neither the final order nor the proposed order is precedent within the rule of stare decisis.

(2) Notwithstanding §H(1) of this regulation, a final order of the Commissioner that summarily affirms the proposed order of an administrative law judge without discussing the facts and legal issues and without expressly adopting the administrative law judge's legal analysis and proposed conclusions of law may be cited and relied on in a proceeding before the Commissioner, the Office, or a court:

(a) When relevant under the doctrine of the law of the case, res judicata, or collateral estoppel; or

(b) In any subsequent disciplinary proceeding involving a party to the final order.

(3) Subject to Insurance Article, §2-215(g), Annotated Code of Maryland, if a party appeals from a final order of the Commissioner that summarily affirms the proposed order of an administrative law judge, in addition to filing the final order of the Commissioner with the court in which the appeal is pending, the Commissioner also shall file a copy of the proposed order of the administrative law judge.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.11 Relief Granted in the Final Order.

A. A licensee may not be subject to an administrative penalty or to the suspension or revocation of any certificate, license, registration, or special permit held by the licensee unless a notice of agency action under State Government Article, §10-207, Annotated Code of Maryland, is issued by the Administration to the licensee.

B. In the final order issued pursuant to a hearing arising out of a determination involving an administrative complaint, the hearing officer may order relief as appropriate under the relevant provisions of Health-General Article or Insurance Article, Annotated Code of Maryland.

C. A final order from a hearing arising out of a determination involving an administrative complaint that results in a finding against a licensee does not bar the Commissioner from subsequently issuing a notice of agency action against the licensee for the purpose of imposing an administrative penalty or suspending or revoking any certificate, license, registration, or special permit held by the licensee.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.12 Decisions.

The hearing officer shall sign the final order following a hearing. The final order is effective when issued, unless a different date is specified in the decision. A copy of the final order shall be filed with the Administration and served on all parties to the hearing.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.13 Rehearings.

A. A request for a rehearing shall be made in writing to:

(1) The Commissioner in a contested case heard by the Administration;

(2) The Commissioner in a contested case where the Office has been delegated authority to hear the contested case but the Commissioner has retained authority to issue the final order; or

(3) The administrative law judge in a contested case where the Office has been delegated authority to issue a final order.

B. If the request is made:

(1) Within 10 days after the issuance of the final order, the request may be granted by the Commissioner or administrative law judge for any reason;

(2) More than 10 days after the issuance of the final order, the request may be granted only on a determination by the Commissioner or administrative law judge that the final order was a result of fraud, mistake, or inadvertence; or

(3) More than 30 days after the issuance of the final order, the request may not be granted.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.01.14 Mistake or Error in the Final Order.

The Administration or the Office may correct an order if, upon review, the final order was issued as a result of fraud, mistake, or inadvertence or contains a clerical error.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .08 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.18 to COMAR 31.02.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Regulation .05D amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .05-1 adopted effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter revised effective May 8, 2006 (33:9 Md. R. 797)
Administrative History: Regulation .02B amended effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1618)
Administrative History: Regulation .05 amended effective January 29, 2007 (34:2 Md. R. 139)
Administrative History: Regulation .06C amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .07 amended effective October 21, 2019 (46:21 Md. R. 894)
Administrative History: Regulation .08 amended effective October 21, 2019 (46:21 Md. R. 894)
Authority: Insurance Article, §§2-109 and 2-205—2-215; State Government Article, §10-206; Annotated Code of Maryland

COMAR 31.02.02 Hearings Conducted by Administrative Law Judges [Repealed]

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .03 amended as an emergency provision effective July 1, 1997 (24:17 Md. R. 1213); amended permanently effective November 17, 1997 (24:23 Md. R. 1610)
Administrative History: Regulation .09 amended as an emergency provision effective April 13, 1998 (25:10 Md. R. 742); emergency status expired October 10, 1998
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.19 to COMAR 31.02.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 amended as an emergency provision effective September 14, 1999 (26:21 Md. R. 1627); emergency status expired March 11, 2000
Administrative History: Regulation .08 amended effective April 3, 2000 (27:6 Md. R. 644)
Administrative History: Regulation .12 amended as an emergency provision effective September 14, 1999 (26:21 Md. R. 1627); emergency status expired March 11, 2000
Administrative History: Regulation .12 amended effective April 3, 2000 (27:6 Md. R. 644)
Administrative History: ——————
Administrative History: Chapter revised effective February 4, 2002 (29:2 Md. R. 95)
Administrative History: Chapter revised as an emergency provision effective May 30, 2003 (30:12 Md. R. 786); revised permanently effective October 13, 2003 (30:20 Md. R. 1448)
Administrative History: Regulation .06B amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .07B, C amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10B amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12E amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .14H amended effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter repealed effective May 8, 2006 (33:9 Md. R. 797)

31.02.03 Hearings Arising from Cancellation, Nonrenewal, Increase in Premium, or Reduction of Coverage under a Motor Vehicle Liability Insurance Policy

COMAR 31.02.03.01 Scope.

This chapter applies only to hearings arising from the cancellation, nonrenewal, reduction of coverage, or increase in premium that is not consistent with the insurer's surcharge plan under a motor vehicle liability insurance policy as provided in Insurance Article, §27-605, Annotated Code of Maryland.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .01 amended as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); amended permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.20 to COMAR 31.02.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-210—2-215, and 27-605; State Government Article, Title 10, Subtitle 2; Annotated Code of Maryland

COMAR 31.02.03.02 Delegation of Authority.

A. In hearings arising under this chapter, subject to Regulation .03 of this chapter, the Commissioner may delegate to the Office of Administrative Hearings the authority to:

(1) Conduct hearings;

(2) Issue final findings of fact and conclusions of law; and

(3) Issue final orders.

B. Hearings arising under this chapter and heard by the Office of Administrative Hearings shall be governed by COMAR 28.02.01.

C. Hearings arising under this chapter and heard by the Maryland Insurance Administration shall be governed by COMAR 31.02.01.

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .01 amended as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); amended permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.20 to COMAR 31.02.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-210—2-215, and 27-605; State Government Article, Title 10, Subtitle 2; Annotated Code of Maryland

COMAR 31.02.03.03 Revocation of Delegation of Authority.

A. The Commissioner may revoke all or part of a delegation of authority to the Office of Administrative Hearings to preside over a hearing if the case:

(1) Involves novel or unanticipated factual or legal issues;

(2) Has significant social, fiscal, or legal issues;

(3) Involves policy issues of general applicability; or

(4) Requires further investigation.

B. Procedures for Revocation.

(1) The Commissioner shall provide written notice of a revocation of hearing authority to all parties and the Office of Administrative Hearings. The written notice shall contain a brief statement of the reason for the revocation.

(2) Delegation of authority to hear a contested case may be revoked at any time before the earlier of the:

(a) Issuance of a ruling by the administrative law judge on a substantive issue; or

(b) Taking of oral testimony from the first witness.

(3) The Commissioner shall specify whether all or part of the delegation to hear a contested case has been revoked. If only part of the delegation has been revoked, the Commissioner shall specify in the written notice of revocation the portions of the contested case for which the delegation has been revoked.

(4) Upon the revocation of the delegation, the Commissioner shall:

(a) Refer the case for further investigation;

(b) Set the case for a hearing with the Commissioner or the Commissioner's designee acting as the hearing officer; or

Cross References

31.02.03.02A

History

Administrative History: Effective date: June 2, 1997 (24:11 Md. R. 793)
Administrative History: Regulation .01 amended as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); amended permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.20 to COMAR 31.02.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-210—2-215, and 27-605; State Government Article, Title 10, Subtitle 2; Annotated Code of Maryland

31.02.04 Penalties

COMAR 31.02.04.01 Scope.

These regulations apply in any instance in which the Insurance Commissioner intends to impose a financial penalty.

History

Administrative History: Effective date: August 24, 1987 (14:17 Md. R. 1871)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.81 to COMAR 31.02.04 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-108, 2-109, and 2-201, Annotated Code of Maryland

COMAR 31.02.04.02 Requirements.

In determining the amount of the financial penalty to be imposed, the Commissioner shall consider the following:

A. The seriousness of the violation;

B. The good faith of the violator;

C. The violator's history of previous violations;

D. The deleterious effect of the violation on the public and the insurance industry; and

E. The assets of the violator.

History

Administrative History: Effective date: August 24, 1987 (14:17 Md. R. 1871)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.81 to COMAR 31.02.04 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-108, 2-109, and 2-201, Annotated Code of Maryland

31.02.05 Public Information Act Requests

COMAR 31.02.05.01 General.

These regulations set out procedures for filing requests with the Maryland Insurance Administration for the inspection and copying of records under General Provisions Article, Title 4, Annotated Code of Maryland.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Act” means the Public Information Act, General Provisions Article, Title 4, Annotated Code of Maryland.

(2) “Administration” means the Maryland Insurance Administration.

(3) “Applicant” means a person or governmental unit that asks to inspect a public record.

(4) “Custodian” means:

(a) The official custodian; or

(b) An authorized person who has physical custody and control of a public record of the Administration.

(5) “Official custodian” means the Insurance Commissioner of the Maryland Insurance Administration.

(6) “Public record” means:

(a) The original or any copy of any documentary material that is made or received by State government in connection with the transaction of public business and is in any form, including a:

(i) Card;

(ii) Computerized record;

(iii) Correspondence;

(iv) Drawing;

(v) Film or microfilm;

(vi) Form;

(vii) Map;

(viii) Photograph or photostat;

(ix) Recording; or

(x) Tape; or

(b) A document that lists the salary of an employee of the Administration.

(7) “Working day” means a day other than Saturday, Sunday, or State holiday.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.03 Applications.

A. A person or governmental unit may request to the Insurance Commissioner, in writing, to inspect or copy public records of the Administration.

B. A written request shall contain:

(1) The applicant’s name;

(2) The applicant’s mailing address or electronic mail address; and

(3) A brief description of the record sought.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.04 Response to Written Request.

A. If the custodian grants a written request, the custodian shall produce the record for inspection immediately, or within a reasonable period needed to retrieve the public record, not to exceed 30 days after receipt of the written request.

B. If the custodian denies the written request, the custodian shall do so promptly, but not later than 30 days after receipt of the written request. Within 10 working days, the custodian shall provide to the applicant a written statement that gives:

(1) The reason for the denial and, if the denial is based on General Provisions Article, §4-343, Annotated Code of Maryland, a brief explanation of why the denial is necessary;

(2) The legal authority for the denial;

(3) Without disclosing the protected information, a brief description of the denied public record that will enable the applicant to assess the applicability of the legal authority for the denial; and

(4) Notice of the remedies as stated in General Provisions Article, §§4-1A-04, 4-1B-04, and 4-362, Annotated Code of Maryland, for review of the denial.

C. If the custodian reasonably believes that it will take more than 10 working days to produce the public record, the custodian shall indicate in writing or by electronic mail within 10 working days after receipt of the request:

(1) The amount of time anticipated to produce the public record;

(2) An estimate of the range of fees that may be charged to produce the requested public record; and

(3) The reason for the delay.

D. If the custodian denies the written request, the custodian shall permit inspection of any part of the record that is subject to inspection.

E. The custodian shall deny inspection of all or any part of a public record as provided in General Provisions Article, Title 4, Subtitle 3, Annotated Code of Maryland.

F. With the consent of the applicant, any time limit imposed by §§A and B of this regulation may be extended for an additional period not to exceed 30 days.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.05 Records Temporarily Unavailable.

If a requested public record is in the custody and control of the custodian but is not immediately available for inspection or copying, within 10 working days after mailing the notification of the grant of a written request, the custodian shall notify the applicant and set a date and hour within a reasonable time for inspection or copying, or both.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.06 Review of the Denial.

If the custodian denies a written request, the applicant may file an action with the circuit court pursuant to General Provisions Article, §4-362, Annotated Code of Maryland, without exhausting the administrative remedy under State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.07 Disclosure Against Public Interest.

A. The official custodian may temporarily deny the request in writing, if the official custodian believes the inspection of the public record would cause substantial injury to the public interest.

B. Within 10 working days of the denial, the official custodian shall petition the appropriate circuit court for an order permitting continued denial or restriction of access.

C. Notice of the application filed with the circuit court shall be served on the applicant as provided for service of process by the Maryland Rules of Procedure.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.08 Inspection of Insurance Licensing Data for Compelling Public Purpose.

A. If a compelling public purpose exists under General Provisions Article, §4-333(c)(1), Annotated Code of Maryland, the custodian may permit inspection of insurance licensing data, including the application record, on individuals other than that data specified under General Provisions Article, §4-333(b), Annotated Code of Maryland, as set forth in this regulation.

B. Complaints, including the number, nature, and administrative status of the complaints, against the individual who is the subject of the insurance licensing record may be disclosed if the person requesting the disclosure:

(1) Has entered into a contract or is employing the services of the insurance licensee who is the subject of the request;

(2) Contemplates entering into a contract or employing the services of the insurance licensee who is the subject of the request;

(3) Has filed a complaint against the individual who is the subject of the insurance licensing record and the request is limited to those documents relating to this complaint.

C. A document relating to insurance licensing data, including the application record, on the individual who is the subject of the insurance licensing record may be disclosed if the person requesting the disclosure is affiliated with:

(1) A federal, state, local, or other law enforcement agency, and has requested the inspection for law enforcement or prosecutorial purposes; or

(2) An out-of-State insurance department where the insurance licensee is licensed, has sought licensure, or is believed to be conducting an insurance business without a license.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.09 Fees.

A. The fee schedule for copies of records is as follows:

(1) Copies. The fee for each copy is 20 cents per page if reproduction is made by a photocopying machine within the Administration. If records are not susceptible to photocopying (for example, punch cards, magnetic tape, blueprints, and microfilm), the fee for copies is based on the actual cost of reproduction.

(2) Diskettes. The fee for each reproduction made on compact disc or other type of diskette is $5.

(3) Minimum Fee Charged. Except as provided in §A(2) of this regulation, if the total amount of the fee is $5 or less, there is no charge.

B. If the official custodian is unable to copy a record within the Administration:

(1) The official custodian shall make arrangements for the reproduction of the record at facilities outside the Administration; and

(2) The custodian shall either collect from the applicant a fee to cover the actual cost of reproduction, or direct the applicant to pay the cost of reproduction directly to the facility making the copy.

C. Before copying a record, the official custodian shall estimate the cost of reproduction and either obtain the agreement of the applicant to pay the cost or demand prepayment of any estimated fee before reproducing the record.

D. Except as provided in §E of this regulation, the official custodian may charge reasonable fees for the search for, preparation of, and reproduction of a public record prepared, on request of the applicant, in customized format; and the actual costs of the search for, preparation, and reproduction of a public record in standard format, including media and mechanical processing costs. The staff and attorney review costs included in the calculation of such actual costs shall be prorated to reflect each individual’s salary and actual time attributable to the search for and preparation of a public record under this section.

E. The official custodian may not charge any search or preparation fee for the first 2 hours of official or employee time that is needed to respond to a request for information.

F. Upon request, the official custodian may waive or reduce any fee charged pursuant to this regulation if the applicant asks for a waiver, is indigent, and files an affidavit of indigency; or, if after consideration of the ability of the applicant to pay the fee and other relevant factors, the official custodian determines that the waiver would be in the public interest.

G. If the applicant requests that copies be mailed or delivered to the applicant, the official custodian may charge the applicant for the cost of postage or delivery to the applicant.

Cross References

31.02.06.06C(2)

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

COMAR 31.02.05.10 Inspection.

A. Time of Inspection. An applicant may inspect any public record that the applicant is entitled to inspect during the normal working hours of the Insurance Administration.

B. Place of Inspection. The place of inspection shall be the place where the document is located unless the custodian, after taking into account the applicant's expressed wish, determines that another place of inspection is more suitable and convenient.

History

Administrative History: Effective date: May 22, 1995 (22:10 Md. R. 707)
Administrative History: Regulation .09A amended effective April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.09 to COMAR 31.02.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .02B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .03B amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .04 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .06 amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .08A amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09A amended effective February 12, 2007 (34:3 Md. R. 302)
Administrative History: Regulation .09D, F amended as an emergency provision effective November 5, 2015 (42:24 Md. R. 1503); amended permanently effective February 1, 2016 (43:2 Md. R. 128)
Authority: General Provisions Article, Title 4; Insurance Article, §§2-109 and 2-112; Annotated Code of Maryland

31.02.06 Procedures for Quasi-Legislative Hearings

COMAR 31.02.06.01 Scope.

A. This chapter applies to quasi-legislative hearings that the Insurance Commissioner conducts to gather information before making a decision or taking an action.

B. This chapter does not apply to contested case hearings.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.02 Relation to Other Laws.

The procedural requirements of this chapter are in addition to the procedural requirements of any other applicable provision of law.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.03 Notice of Hearing.

A notice of a hearing held under this chapter shall include:

A. The time and location of the hearing;

B. The purpose of the hearing; and

C. Any other information required by applicable law.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.04 Conduct and Control of Hearing.

The Insurance Commissioner or a designee of the Insurance Commissioner shall determine the conduct of a hearing held under this chapter, including:

A. The order of presentation; and

B. Time limits for questions and testimony.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.05 Testimony.

A. The Insurance Commissioner or a designee of the Insurance Commissioner may:

(1) Request the attendance of persons to testify or the production of documents;

(2) Issue a subpoena requiring the attendance of persons to testify or the production of documents; and

(3) Require testimony to be given under oath.

B. The Insurance Commissioner or a designee of the Insurance Commissioner shall give all persons present who wish to testify an opportunity to do so, but may limit repetitious testimony.

C. The Insurance Commissioner or a designee of the Insurance Commissioner may:

(1) Ask questions of anyone present at a hearing;

(2) Take questions from the audience and redirect the questions to others present at the hearing; and

(3) Refer questions to employees of the Maryland Insurance Administration who may respond after the hearing.

D. The rules of evidence do not apply to a hearing held under this chapter.

E. The Insurance Commissioner or designee of the Insurance Commissioner shall receive and mark all exhibits offered in testimony if they are relevant to the hearing.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.06 Transcript.

A. At the discretion of the Maryland Insurance Administration and unless otherwise required by law, the Administration or a court reporter service shall stenographically record verbatim or tape record a hearing held under this chapter.

B. If a court reporter service records the hearing, a person who desires a copy of a transcript of the recording may purchase a copy from the court reporter service.

C. If an employee of the Maryland Insurance Administration records the hearing:

(1) The Maryland Insurance Administration shall keep the tape recording or stenographic recording with the original record of the hearing; and

(2) A person who desires a copy of the transcript of the recording, if one is made, may purchase a copy from the Maryland Insurance Administration for a reasonable cost in accordance with COMAR 31.02.05.09.

Cross References

31.02.06.07B(4)

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.07 Record.

A. The Insurance Commissioner or a designee of the Insurance Commissioner controls the record of a hearing held under this chapter.

B. The Insurance Commissioner or a designee of the Insurance Commissioner shall assemble a record that consists of:

(1) The notice of the hearing;

(2) Exhibits and documents entered into the record;

(3) The register of all persons who attended the hearing including their names, addresses, and any affiliations relevant to the hearing;

(4) In accordance with Regulation .06 of this chapter, any:

(a) Full or partial transcript of the hearing made or purchased by the Maryland Insurance Administration; and

(b) Tape or stenographic recording of the hearing made by the Maryland Insurance Administration; and

(5) If applicable, the final decision of the Insurance Commissioner or a designee of the Insurance Commissioner.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.08 Postponement and Continuance.

The Insurance Commissioner or a designee of the Insurance Commissioner has sole discretion to:

A. Postpone or continue a hearing; and

B. Keep the record open beyond the date of the hearing.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

COMAR 31.02.06.09 Judicial Review.

Unless otherwise required by law, a party who is aggrieved by a final decision issued by the Insurance Commissioner, or a designee of the Insurance Commissioner, at the conclusion of a hearing held under this chapter, may file a petition for judicial review in the Circuit Court for Baltimore City within 30 days after the date of the final decision.

History

Administrative History: Effective date: October 15, 2001 (28:20 Md. R. 1785)
Authority: Health-General Article, §19-713; Insurance Article, §§2-109, 2-203, 4-309, 11-502, 12-203, 12-204, 12-205, 13-110, 13-111, and 4-126; State Government Article, §§6.5-103 and 6.5-203; Annotated Code of Maryland

31.03.01 Temporary Licensees

COMAR 31.03.01.01 Individual Business Continuation Cases.

A. If a qualified and licensed resident insurance producer should die, become mentally or physically disabled, or enter upon active service in the armed forces of the United States of America, the Insurance Commissioner will give consideration to the issuance of temporary licenses to an individual who comes under one of the categories listed in Insurance Article, §10-120(a), Annotated Code of Maryland. Except in unusual circumstances, consideration will not be given to any nonresident applicant.

B. The grant of authority given to an approved applicant will be restricted to the same kinds of insurance only for which the insurance producer whom the applicant is replacing was qualified and licensed.

C. Any renewal application for a temporary license shall be stamped received in the Insurance Administration in advance of the expiration of the existing temporary license.

D. If the insurance business of the original insurance producer is sold, transferred, or otherwise disposed of, any temporary license to continue that business shall be terminated and the licensee shall return the license or licenses to the Insurance Administration for cancellation. Further licenses will not be issued in that case.

History

Administrative History: Effective date: April 1, 1964
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .03 repealed effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .04 recodified to Regulation .03 effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulations .05 and .06 adopted effective May 5, 1986 (13:9 Md. R. 1027)
Administrative History: Regulation .05 recodified to Regulation .04 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .06 recodified to Regulation .05 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.18 to COMAR 31.03.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-109, 10-115, 10-120, and 10-126, Annotated Code of Maryland

COMAR 31.03.01.02 Repealed.

History

Administrative History: Effective date: April 1, 1964
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .03 repealed effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .04 recodified to Regulation .03 effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulations .05 and .06 adopted effective May 5, 1986 (13:9 Md. R. 1027)
Administrative History: Regulation .05 recodified to Regulation .04 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .06 recodified to Regulation .05 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.18 to COMAR 31.03.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-109, 10-115, 10-120, and 10-126, Annotated Code of Maryland

COMAR 31.03.01.03 Revocation of Temporary Licenses.

A temporary license which has been issued under the provisions of the Insurance Article and this chapter may be revoked in accordance with provisions of the Insurance Article, §10-126, Annotated Code of Maryland.

History

Administrative History: Effective date: April 1, 1964
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .03 repealed effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .04 recodified to Regulation .03 effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulations .05 and .06 adopted effective May 5, 1986 (13:9 Md. R. 1027)
Administrative History: Regulation .05 recodified to Regulation .04 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .06 recodified to Regulation .05 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.18 to COMAR 31.03.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-109, 10-115, 10-120, and 10-126, Annotated Code of Maryland

COMAR 31.03.01.04 Issuance of Temporary License.

A temporary license for a life or health insurance producer may not be issued to any applicant affiliated or to be affiliated with an appointing insurer if to do so would increase the appointing insurer's proportion of resident insurance producers temporarily licensed to resident insurance producers permanently licensed to 10 percent or more, based upon statistics for the previous calendar year.

History

Administrative History: Effective date: April 1, 1964
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .03 repealed effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .04 recodified to Regulation .03 effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulations .05 and .06 adopted effective May 5, 1986 (13:9 Md. R. 1027)
Administrative History: Regulation .05 recodified to Regulation .04 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .06 recodified to Regulation .05 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.18 to COMAR 31.03.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-109, 10-115, 10-120, and 10-126, Annotated Code of Maryland

COMAR 31.03.01.05 Issuance of Appointments.

A. An insurer may not issue an appointment to act as a temporary life or health insurance producer if to do so would increase the proportion of resident insurance producers temporarily licensed by the insurer to resident insurance producers permanently licensed to 10 percent or more, based upon statistics for the previous calendar year.

B. The Insurance Commissioner may, at the discretion of the Insurance Commissioner, allow an insurer to exceed the 10 percent limitation stated in §A of this regulation if the Insurance Commissioner reasonably believes that the limitation would impose an undue burden on the conduct of the insurer's business in Maryland.

C. In determining whether to allow an insurer to exceed the 10 percent limitation stated in §A of this regulation, the Insurance Commissioner shall consider the total number of resident insurance producers appointed by the insurer and the length of time the insurer has been doing business in Maryland.

History

Administrative History: Effective date: April 1, 1964
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .03 repealed effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .04 recodified to Regulation .03 effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulations .05 and .06 adopted effective May 5, 1986 (13:9 Md. R. 1027)
Administrative History: Regulation .05 recodified to Regulation .04 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: Regulation .06 recodified to Regulation .05 and amended effective September 5, 1988 (15:18 Md. R. 2146)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.18 to COMAR 31.03.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-109, 10-115, 10-120, and 10-126, Annotated Code of Maryland

31.03.02 Insurance Producers — Continuing Education Requirements

COMAR 31.03.02.01 Scope.

A. This chapter applies to an individual licensed resident or nonresident insurance producer who seeks to renew a license under Insurance Article, Annotated Code of Maryland, but does not apply to an individual holding the type of license described in Insurance Article, §10-116(b), Annotated Code of Maryland.

B. The following types of courses are not considered to be continuing education courses and are outside the scope of this chapter:

(1) A course that is designed for preparing an applicant for the examination given to obtain an initial license as an insurance producer; and

(2) A course designed to prepare a person for an examination in a kind or subdivision of insurance that the insurance producer seeks to add to the insurance producer's existing license.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Advisory board” means a group of individuals appointed by the Insurance Commissioner pursuant to Insurance Article, §10-110, Annotated Code of Maryland, to review continuing education courses for insurance producers and to make recommendations regarding the courses.

(2) “Bail bondsman services” means any conduct relating to the sale, solicitation, negotiation, or procurement of a bail bond, and includes the posting of a bail bond.

(3) “Commissioner" means the Insurance Commissioner of Maryland.

(4) “Course” means a presentation of information delivered in person, in print, electronically, or via teleconference, the successful completion of which is measured by verifiable attendance or by examination, or both.

(5) “Course completion date” means the date when a student has submitted all necessary information to the education provider and, when applicable, successfully met the course attendance requirements or passed the final examination, or both.

(6) “Course completion roster” means a listing of candidates who have completed a continuing education course, provided in a format determined by the Commissioner, which includes the following:

(a) The course name, the designated course number, and the course completion date;

(b) The provider’s identification number;

(d) For each student who completes the course:

(i) The student’s name;

(ii) The student’s national producer number or the student’s license number, or both; and

(iii) The number of hours of continuing education earned by the student.

(7) “Course coordinator” means an individual who is responsible for organizing a continuing education course, getting it approved by the Insurance Commissioner, and supervising the administration of the course after its approval.

(8) “Expiration date” means the date the license expires as stated on the license.

(9) “Hour of continuing education” means 50 minutes of work in a course that has been approved by the Commissioner to receive continuing education credit.

(10) “Instructor” means a subject matter expert, approved by the Commissioner, presenting course activities or information in a course approved by the Commissioner.

(11) “License” has the meaning stated in Insurance Article, §10-101(d), Annotated Code of Maryland.

(12) “Licensed insurance producer” has the meaning stated in Insurance Article, §1-101(w), Annotated Code of Maryland.

(13) “National examination” means an examination given as part of a nationally recognized designation awarded by a national insurance organization, including the:

(a) Life Underwriter Training Council (LUTC) course curricula;

(b) American College diploma curriculum for Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Certified Employee Benefits Specialist (CEBS) or Registered Health Underwriter (RHU);

(d) Insurance Institute of America curriculum for:

(i) Program in General Insurance (INS);

(ii) Associate in Claims Program (AIC);

(iii) Associate in Risk Management Program (ARM);

(iv) Associate in Underwriting Program (AIU);

(v) Associate in Loss Control Management Program (ALCM);

(vi) Accredited Advisor in Insurance Program (AAI);

(vii) Associate Premium Auditing Program (APA); and

(viii) Associate in Research and Planning Program (ARP);

(e) American Institute for Property and Liability Underwriters Chartered Property and Casualty Underwriter (CPCU) program;

(f) Health Insurance Association of America Program (HIAA);

(g) Academy of Life Underwriting Education Council curriculum for LUEC program; or

(h) Certified Insurance Counselor program (CIC).

(14) “Preneed insurance contract” has the meaning stated in COMAR 31.05.03.03B.

(15) “Provider” means an entity that has been approved by the Commissioner to offer continuing education courses to licensed insurance producers in the State.

(16) “Renewal period” means the period from the issuance or renewal of a license until the day before the expiration date of the license.

(17) “Renewal year” means the 12-month period from January 1 until December 31 in which a license renewal occurs.

(18) “Self-study course” means a course that is not presented in a classroom, is not delivered in person, and does not require interaction with an instructor.

(19) “Successfully complete” means to complete and meet all requirements of an approved course for which a valid certificate of course completion has been issued.

(20) “Teleconference” means the live exchange of information among several persons who are separately located but linked by audio or video, or both, that provides for opportunities for interactions between student and instructor.

(21) “Viatical settlement broker” has the meaning stated in Insurance Article, §8-601(k), Annotated Code of Maryland.

Cross References

31.09.12.03B(5)

31.09.12.03B(15)

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.03 General Continuing Education Requirements.

A. Except as set forth in this regulation, in order to renew a license, a licensed insurance producer shall successfully complete in each renewal period at least 24 hours of continuing education.

B. A licensed insurance producer who, as of October 1, 2008, has held a license for 25 or more consecutive years shall successfully complete 8 hours of continuing education in each renewal period in order to renew the license.

C. A licensed insurance producer shall obtain at least 3 hours of continuing education in Ethics.

D. A licensed insurance producer shall obtain hours of continuing education in the kind or subdivision of insurance for which they hold a license, as follows:

(1) Except for the required hours of continuing education in Ethics, if the licensed insurance producer has only a license for property insurance, casualty insurance, or any of the subdivisions of property or casualty insurance, the licensed insurance producer shall obtain all necessary hours of continuing education in courses designated by the Commissioner as “Property/Casualty” or “PC”;

(2) Except for the required hours of continuing education in Ethics, if the licensed insurance producer has only a license for life insurance, health insurance, or any of the subdivisions of life or health insurance, the licensed insurance producer shall obtain all necessary hours of continuing education in courses designated by the Commissioner as “Life/Health” or “LH”;

(3) If the licensed insurance producer has a license for property or casualty, or any subdivision of property or casualty, and life or health, or any subdivision of life or health, then the licensed insurance producer shall complete:

(a) 24 hours of continuing education with a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty” and a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Life/Health”; or

(b) For licensed insurance producers who meet the requirements of §B of this regulation,8 hours of continuing education with a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty” and a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Life/Health”;

(4) In addition to the required hours of continuing education in Ethics, if the licensed insurance producer holds a title insurance producer license only, the licensed insurance producer shall obtain 13 hours of continuing education in one or more courses designated by the Commissioner as “Title” in each renewal period in order to renew the license;

(5) If the licensed insurance producer has a license for title and property or casualty, or any subdivision of property or casualty, then the licensed insurance producer shall complete:

(a) 24 hours of continuing education with a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Title” and a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty”; or

(b) For licensed insurance producers who meet the requirements of §B of this regulation, 8 hours of continuing education with a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Title” and a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty”;

(6) If the licensed insurance producer has a license for title and life or health, or any subdivision of life or health, then the licensed insurance producer shall complete:

(b) For licensed insurance producers who meet the requirements of §B of this regulation, 8 hours of continuing education with a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Title” and a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Life/Health”;

(7) If the licensed insurance producer has a license for title, property, or casualty, or any subdivision of property or casualty, and life or health, or any subdivision of life or health, then the licensed insurance producers shall complete:

(a) 24 hours of continuing education with a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Title”, a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty”, and a minimum of 6 hours of continuing education in one or more courses designated by the Commissioner as “Life/Health”; or

(b) For licensed insurance producers who meet the requirements of §B of this regulation, 8 hours of continuing education with a minimum of 1 hour of continuing education in a course designated by the Commissioner as “Title”, a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Property/Casualty”, and a minimum of 2 hours of continuing education in one or more courses designated by the Commissioner as “Life/Health”; or

(8) A licensed insurance producer who has only a license for life insurance and also is a licensed funeral director or a licensed mortician and sells only life insurance policies or annuity contracts that fund preneed insurance contracts and is not a viatical settlement broker shall complete at least 16 hours of continuing education courses designated by the Commissioner as “Life/Health” in each renewal period in order to renew the license.

E. Sales of Long-Term Care Insurance.

(1) A licensed insurance producer with authority to sell health insurance who also sells long-term care insurance shall obtain at least 2 hours of continuing education in a course designated “Long Term Care” or “LH-LTC” in order to renew the license.

(2) These hours of continuing education may be considered a part of the required hours of continuing education under §A or B of this regulation.

F. A licensed insurance producer who possesses a license to sell property and casualty insurance and who sells flood insurance, homeowners insurance, or commercial property insurance shall obtain at least 2 hours of continuing education that directly relates to flood insurance as part of the required hours of continuing education.

G. A licensed insurance producer who possesses a license to sell property and casualty insurance and provides bail bondsman services shall obtain at least 4 hours of continuing education that directly relates to bail bond insurance.

H. Hours of Continuing Education — Passing Scores.

(1) A licensee who receives a passing score on a national examination and has been awarded a nationally recognized designation as listed in Regulation .02B(13)of this chapter may request that the Commissioner apply towards the requirement stated in §D of this regulation:

(a) Up to 24 hours of continuing education credits approved by the Commissioner towards the hours of continuing education required for the next renewal period; and

(b) Up to 9 hours of any remaining continuing education hours approved by the Commissioner for the renewal period immediately thereafter.

(2) The licensee shall submit to the Administration the examination results issued by the nationally recognized designation organization that clearly identifies the national designation name, the licensee name, and the date the examination was passed with the renewal application.

(3) The hours of continuing education granted from earning the following designations shall be applied as Life/Health course credits to the continuing education requirement of licensees who hold the Life and/or Health lines of authority:

(a) Life Underwrite Training Council (LUTC);

(b) American College diploma curriculum for Chartered Life Underwriter (CLU);

(d) Certified Employee Benefits Specialist (CEBS);

(e) Registered Health Underwriter (RHU);

(f) College of Financial Planning diploma curriculum for Chartered Financial Planning (CFP);

(g) Health Insurance Association of America Program (HIAA); or

(h) Academy of Life Underwriting Education Council curriculum for LUEC program.

(4) The hours of continuing education granted from earning the following designations shall be applied as Property/Casualty course credits to the continuing education requirement of licensees who hold the Property and/or Casualty lines of authority:

(a) Associate in Risk Management Program (ARM);

(b) Accredited Advisor in Insurance Program (AAI); or

(5) The hours of continuing education granted from the following designations shall be applied as Life/Health/Property/Casualty course credits to the continuing education requirement of licensees who hold the Life, Health, Property and/or Casualty lines of authority:

(a) Program in General Insurance (INS);

(b) Associate in Claims Program (AIC);

(d) Associate Premium Auditing Program (APA);

(e) Associate in Research and Planning Program (ARP); or

(f) Certified Insurance Counselor Program (CIC).

(6) A licensee may not apply any hours of continuing education granted by the Commissioner pursuant to this section towards the 3 hours of continuing education in Ethics requirement.

(7) Hours of continuing education received for a passing score on a national examination are in addition to any hours of continuing education received for completing a course that is required in order to take the national examination and that has been approved by the Commissioner under this chapter.

I. A course instructor shall earn 1-1/2 hours of continuing education for each approved hour of instruction of an approved course.

J. A licensed insurance producer or a course instructor may not earn hours of continuing education:

(1) For attending or instructing a subsequent offering of the same course in the same renewal period; or

(2) If the same course was taken in two different renewal periods but within 6 months.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.04 Holders of Expired Licenses Who Seek Reinstatement.

A. The holder of an expired license who seeks reinstatement of the license under Insurance Article, §10-116.1, Annotated Code of Maryland, shall fulfill the continuing education requirements for the renewal period that concluded on the day before the immediately preceding expiration date of the licensed insurance producer’s license in order to qualify for reinstatement.

B. A licensed insurance producer who does not have sufficient hours of continuing education on the day before the most recent expiration date of the license will have all hours of continuing education earned on or after the expiration date credited toward the requirement for the renewal period that concluded on the day before the license expired.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.05 Nonresident Licensed Insurance Producers.

A. A nonresident licensed insurance producer whose state of residence has a continuing education requirement shall fulfill all of the requirements of the state of residence, and the continuing education requirements of Maryland may not be applicable to the licensed insurance producer.

B. A nonresident licensed insurance producer whose state of residence does not have a continuing education requirement shall fulfill Maryland continuing education requirements, which may be fulfilled entirely through correspondence courses.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.06 Licensed Insurance Producer Responsibilities.

A. A licensed insurance producer shall:

(1) Maintain a record of the certificate of course completion received for 4 years following the date that the course was completed; and

(2) Upon request, submit with the renewal application each certificate of course completion needed to fulfill the licensed insurance producer’s hours of continuing education for the renewal period.

B. Under Insurance Article, §10-126, Annotated Code of Maryland, the Commissioner may suspend or revoke a license if a licensed insurance producer is found to have knowingly:

(1) Falsified a certificate of course completion; or

(2) Submitted a falsified certificate of course completion.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.07 Approval of Courses.

A. A continuing education course shall be submitted to the Commissioner for approval. The Commissioner may approve a course only if the course imparts substantive and procedural knowledge relating to the insurance field.

B. The Commissioner may not approve a course covering any of the following subject areas:

(1) A course in office or business skills, including typing, speed reading, or the use of computers, calculators, or other machines or equipment;

(2) A course in office management, client relations, or other matters aimed at improving the operation of the person's business; or

(3) A course in salesmanship or product promotion, stress management, time management, psychology, motivation, or written or oral communications.

C. Except for a self-study course, a course submitted to the Commissioner for approval does not need to require a textbook or an examination in order to receive approval.

D. The Commissioner shall assign to each approved course:

(1) The number of hours of continuing education that an individual taking the course may receive for successful completion of the course;

(2) A designated course number that is provided on all certificates of course completion, all correspondence relating to the course, and on all forms filed with the Commissioner relating to the course;

(3) A designation of “Property/Casualty”, “Life/Health”, “Long Term Care”, or “Ethics”; and

(4) A course expiration date.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.08 Submission of Courses for Approval.

A. A provider shall submit to the Commissioner:

(1) A fully completed course approval package consisting of the following forms provided by the Commissioner;

(a) Request for approval of continuing education course,

(b) Course coordinator information,

(d) Certificate of course completion, and

(e) Checklist of items that must accompany the course approval package;

(2) A statement of the educational objectives;

(3) A full and detailed description of the course content including the amount of time allotted to each subject covered by the course on an hour-by-hour basis;

(4) All course materials, including textbooks, written materials in place of textbooks, course syllabus, policy forms, and any other items used by the instructor;

(5) Promotional materials; and

(6) A statement of the refund policy, which shall include:

(a) Full refund of course fees due to cancellation by the sponsor; and

(b) The refund policy when the licensed insurance producer:

(i) Withdraws from the course before commencement, and

(ii) Fails to complete the course after it has commenced; and

(7) If the Commissioner contracts with a vendor to review continuing education courses, the fee charged by the vendor.

B. The provider shall submit a course approval package to the Commissioner as follows:

(1) A course previously approved in another state or jurisdiction that has adopted the “NAIC Uniform Declaration Regarding Continuing Education Reciprocity Course Approval Guidelines” shall be submitted using the NAIC Uniform Continuing Education Reciprocity Course Filing Form at least 30 days before the first date on which the course is to be taught; or

(2) A course that has not been previously approved in a state that has adopted the “NAIC Uniform Declaration Regarding Continuing Education Reciprocity Course Approval Guidelines” shall be submitted at least 45 days before the first date on which the course is to be taught.

C. The Commissioner shall notify the provider in writing of a course approval and the period of time of the approval, which shall be from the date of the approval until the second anniversary of the date the course was approved.

D. A provider may offer only a course approved by the Commissioner.

Cross References

31.03.02.09B

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.09 Submission of Courses for Renewal.

A. At least 90 days prior to the expiration of a course’s approval, the Commissioner shall mail to the provider of the approved course a notice that states:

(1) The course name, the course content code, the course number, and the date on which the course approval expires;

(2) The date by which the Commissioner must receive the request to renew; and

(3) The fee charged for reviewing continuing education courses submitted for renewal.

B. In order to renew a course, a provider must comply with the provisions of COMAR 31.03.02.08.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.10 Providers.

A. A provider shall:

(1) Comply with this chapter for each of the provider’s approved courses;

(2) Use in all communication with the Commissioner or the Commissioner’s designee the provider identification number assigned by the Commissioner;

(3) Use a course coordinator who meets the qualifications specified in this chapter;

(4) Use an approved instructor; and

(5) Notify the Commissioner of the replacement of a course coordinator.

B. A provider who is an insurer authorized to do business in Maryland may not require an appointed insurance producers to obtain hours of continuing education by attending an approved course that the insurer is providing.

C. Within 10 days of the completion of a course, the provider shall report a course completion roster to the Commissioner or the Commissioner’s designee in an electronic format specified by the Commissioner.

Cross References

31.03.02.15B(5)

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.11 Course Coordinators.

A. The provider shall ensure that each approved continuing education course has at least one course coordinator who is responsible for:

(1) Supervising the administration of the course; and

(2) Compliance with this chapter.

B. A course coordinator shall possess one or more of the following qualifications:

(1) A minimum of 5 years experience as an actively licensed insurance producer;

(2) A minimum of 3 years experience as an administrator of an education program;

(3) A degree in education and at least 2 years experience as a licensed insurance producer; or

(4) Full-time employment in the insurance education field as a coordinator with at least 6 months experience.

C. A course coordinator shall:

(1) Assure compliance with this chapter;

(2) Notify the Commissioner of:

(a) Any change in the instructor for an approved course;

(b) The date, time, and location of a course offering and the name of the instructor not less than 14 calendar days in advance of the date that the course offering is scheduled to begin; and

(3) Assure that students are provided with current and accurate information;

(4) Create an accurate record of student attendance and successful course completion for each offering of an approved course;

(5) Supervise and evaluate courses and instructors;

(6) Investigate complaints relating to course offerings and instructors;

(7) Maintain accurate records relating to course offerings, instructors, student attendance, and student course completion for a minimum of 4 years following the date of the course offering; and

(8) Within 15 days of the student’s completion of the course, provide each student with a certificate of course completion on a form approved by the Commissioner.

Cross References

31.03.02.15B(4)

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.12 Instructors.

A. The provider shall ensure that each continuing education course approved by the Commissioner is taught by an instructor who has been approved by the Commissioner as meeting the qualifications specified in this chapter.

B. The provider shall submit to the Commissioner a course instructor information and approval form for each instructor of an approved course.

C. An instructor shall possess one or more of the following qualifications:

(1) A minimum of 2 years experience in the subject matter being taught;

(2) A degree in the subject matter being taught; or

(3) A minimum of 2 years recent experience as a licensed insurance producer and a minimum of 6 months practical experience in the subject matter being taught.

D. The Commissioner may not approve as an instructor a licensed insurance producer:

(1) Who has been fined; or

(2) Whose license has been suspended or revoked.

E. An instructor shall:

(1) Comply with this chapter;

(2) Provide students with:

(a) Current and accurate information on the subject matter of the course; and

(b) A course syllabus that shall contain at least the following information:

(i) Course title and designated course number assigned by the Commissioner;

(ii) Times and dates of the course offering;

(iii) Names, addresses, and telephone numbers of each course coordinator; and

(iv) Detailed outline of the subject matter of the course.

F. The Commissioner may revoke the approval of any course that is not taught by an approved instructor.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.13 Advertising of Approved Courses.

A. Except as provided in §D of this regulation, a provider may not advertise or distribute promotional materials unless the course has been approved by the Commissioner.

B. Advertisements and promotional materials may not be deceptive or misleading and shall, at a minimum, clearly identify the number of hours of continuing education for which a course has been approved and the fee for taking the course.

C. A provider of an approved course who advertises or promotes a course that has not been approved or a course that is not eligible for approval shall prominently state that no hours of continuing education can be earned by taking the course.

D. A provider may request, in writing, permission to advertise a course before approval is obtained from the Commissioner by submitting:

(1) A letter specifically requesting permission to advertise the course before approval is obtained; and

(2) With the course approval package, all advertisements or promotional materials that will be used before approval and which shall prominently include the words “approval from the Insurance Administration pending”.

E. The Commissioner shall issue the provider a written response either granting or denying the provider’s request. The provider may not advertise the course until the Commissioner has granted the request.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.14 Prohibited Practices.

The following practices by a provider, course coordinator, or instructor are prohibited:

A. Offering or teaching a course that is not approved or that is not in substantial conformity with the course completion package submitted to and approved by the Commissioner;

B. Promoting a particular insurance agency or insurance company or products of the agency or company; and

C. Requiring, as a condition of receiving a certificate of course completion, that students participate in other programs or services offered by the provider, course coordinator, or instructor.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.15 Powers of the Commissioner.

A. The Commissioner, the Commissioner’s designee, or the members of an advisory board may audit all course offerings with or without notice to the provider, course coordinator, or instructor of the course.

B. The Commissioner may suspend or revoke the approval of a course for any of the following violations of this chapter:

(1) Failure of the instructor to follow the approved course content;

(2) Failure to use a course coordinator meeting the qualifications specified in this chapter;

(3) Failure to use an approved instructor;

(4) Failure to notify the Commissioner of the date, time, location, and instructor of a course offering in accordance with Regulation .11C(2)(b) of this chapter; or

(5) Failure to report a course completion roster in accordance with Regulation .10C of this chapter.

C. The Commissioner may suspend or revoke all approved courses of a particular provider for a violation of this chapter or refuse to approve a course submitted by a specific provider if the Commissioner determines that a past course offering by that provider was not in compliance with this chapter.

D. The Commissioner may suspend or revoke the approval of any instructor, course coordinator, or course provider who fails to comply with this chapter.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.16 Waiver of the Continuing Education Requirement.

A. Subject to §B of this regulation, the continuing education requirements may be waived for a licensed insurance producer who:

(1) Submits a written request for a waiver; and

(2) Is determined by the Commissioner, in the Commissioner's discretion, to warrant the waiver.

B. A waiver request shall be accompanied by supporting documentation.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

COMAR 31.03.02.17 Advisory Boards.

The Commissioner may appoint a life and health advisory board and a property and casualty advisory board as provided by Insurance Article, §10-110(b) and (c), Annotated Code of Maryland, for the purpose of reviewing the course approval packages submitted to the Commissioner and making recommendations on approval or disapproval of courses.

History

Administrative History: Effective date: November 16, 1987 (14:23 Md. R. 2424)
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.17 adopted as an emergency provision effective July 1, 1997 (24:17 Md. R. 1209); adopted permanently effective November 17, 1997 (24:23 Md. R. 1609)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.74 to COMAR 31.03.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03J adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .16 amended effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective February 1, 2015 (41:20 Md. R. 1114)
Administrative History: Regulation .02B amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03 amended effective November 6, 2017 (44:22 Md. R. 1038)
Administrative History: Regulation .03D amended effective January 1, 2020 (46:19 Md. R. 816); ); February 1, 2023 (49:15 Md. R. 739)
Administrative History: Regulation .03F amended effective October 1, 2023 (50:13 Md. R. 514)
Administrative History: Regulation .03H amended effective December 14, 2020 (47:25 Md. R. 1067)
Administrative History: Regulation .10C amended effective January 27, 2020 (47:2 Md. R. 62)
Authority: Insurance Article, , §§2-109, 10-115, and 10-116, Annotated Code of Maryland

31.03.03 Fiduciary Responsibility of Insurance Producers: Premium Accounts — Commingling of Funds

COMAR 31.03.03.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means a person that is:

(a) An insurer that holds a certificate of authority in the State and provides insurance in the State;

(b) A health maintenance organization that is licensed to operate in the State;

(d) Any other person or organization that provides insurance or health benefit plans subject to State insurance regulation.

(2) “Operating account” means an account owned by an insurance producer containing monies that are utilized primarily for the day to day operation of the insurance producer’s business.

(3) “Personal account” means an account owned by an individual who is an insurance producer containing monies that are utilized primarily for the individual’s personal expenses.

(4) “Premium” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(5) “Premium account” means an account in a bank or banks authorized to do business in this State or subject to jurisdiction of this State containing premium monies or voluntary deposits, from which withdrawals may not be made except as specified in COMAR 31.03.03.02C.

(6) “Prompt remittance” means remittance of premium monies to carriers or insureds not later than the close of the fifth business day following receipt of the funds.

(7) “Voluntary deposit” means a deposit into a premium account in excess of aggregate net premiums, return premiums, and deposits received but not remitted, made for the purpose of maintaining a minimum balance, to guarantee the adequacy of the account, or to pay premium due but uncollected.

History

Administrative History: Effective date: January 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.20 to COMAR 31.03.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2018 (44:20 Md. R. 947)
Authority: Insurance Article, §§2-109 and 10-126, Annotated Code of Maryland

COMAR 31.03.03.02 General Requirements.

A. Premium Account. An insurance producer that does not make prompt remittance of a carrier or insured’s premium shall maintain such premium in one or more premium accounts, which shall be separate from any operating accounts or personal accounts.

B. Commingling of Premium.

(1) An insurance producer acting as such in this State may not commingle any premium account with any operating account or personal account.

(2) An insurance producer acting as such in this State may:

(a) Make voluntary deposits into the insurance producer’s premium account.

(b) Unless prohibited by the carrier, or by Regulation .04 of this chapter, commingle a single carrier’s premium with the premium of one or more other carriers into one or more premium accounts.

C. Withdrawals.

(1) Withdrawals from a premium account may not be made other than for the following purposes:

(a) Payment of premiums to carriers.

(b) Transfer to an operating account of bank interest, if the carrier has consented to it in writing.

(c) Transfer to an operating account of commissions either actual or average. If average commissions are used, the insurance producer shall maintain on file in the insurance producer's office at all times a letter from each carrier stating the percentage of the average commission.

(d) Withdrawal of voluntary deposits.

(e) Payment of return deposits to insureds.

(f) Payment of return premiums to insureds in the ordinary course of business when a written agreement with the carrier authorizing this practice exists.

(2) A withdrawal may not be made if the balance remaining in the premium account thereafter is less than aggregate net premiums, return premiums, and deposits received but not remitted.

D. Deposit of a premium in a premium account may not be construed as a commingling of the net premium and of the commission portion of the premium.

Cross References

31.03.03.01B(5)

History

Administrative History: Effective date: January 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.20 to COMAR 31.03.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2018 (44:20 Md. R. 947)
Authority: Insurance Article, §§2-109 and 10-126, Annotated Code of Maryland

COMAR 31.03.03.03 Account Current System.

In the case of an insurance producer operating under an account current system, maintenance at all times in one or more premium accounts of at least the net balance of premiums as determined by either actual or average commissions, return premiums, and deposits received but not remitted, shall be construed as compliance with this chapter, provided that the funds so held for each carrier are readily ascertainable from the insurance producer's records.

History

Administrative History: Effective date: January 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.20 to COMAR 31.03.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2018 (44:20 Md. R. 947)
Authority: Insurance Article, §§2-109 and 10-126, Annotated Code of Maryland

COMAR 31.03.03.04 Substantial Interest.

In those instances when the officers, directors, or principal management of a carrier have a substantial interest in either the conduct or operation of the agency or brokerage business, or when the officers, directors, or principal management of an agency or brokerage business have a substantial interest in the conduct or operation of the carrier, the agency or brokerage business shall maintain one or more premium accounts to be used exclusively for any premium collected from the carrier, which shall be separate from premium accounts for other carriers.

Cross References

31.03.03.02B(2)(b)

History

Administrative History: Effective date: January 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.20 to COMAR 31.03.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .05 repealed effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2018 (44:20 Md. R. 947)
Authority: Insurance Article, §§2-109 and 10-126, Annotated Code of Maryland

31.03.04 Regulation Restricting Licensed Insurance Producers to Placing Maryland Risks for State Citizens with Authorized Insurers

COMAR 31.03.04.01 Unfair Trade Practice.

A. This regulation does not apply to:

(1) Reinsurance of the liability of an admitted insurer;

(2) Insurance against perils of navigation, transit, or transportation upon hulls, freights or disbursements, or other personal property and interest therein, in the course of exportation from or importation into any country, or transportation coastwise, including transportation by land or water from point of origin to final destination and including war risks; and marine builder's risks, dry docks, and marine railways, including insurance of ship repairer's liability, and protection and indemnity insurance, but excluding insurance covering:

(a) Bridges and tunnels,

(b) Pleasure craft that are under 60 feet in length and are owned and used for pleasure and not for business, hire, or other commercial use,

(d) Charter or head boats under 50 gross tons that are not part of a fleet of three or more vessels;

(3) Aircraft insurance;

(4) Insurance on property or operations of railroads engaged in interstate commerce;

(5) Insurance effectuated in accordance with the Surplus-Line Insurance Law, Insurance Article, Title 3, Subtitle 3, Annotated Code of Maryland; and

(6) Insurance effectuated in accordance with Article 83A, §§5-1035 and 5-1037, Annotated Code of Maryland, and State Finance and Procurement Article, §§13-207, 13-208, 13-216, and 17-104, Annotated Code of Maryland.

B. It is deemed to be an unfair trade practice in the business of insurance for any insurance producer licensed both in Maryland and in another state or the District of Columbia to place insurance on risks located in Maryland for Maryland citizens with insurers not authorized to do business in this State.

Agency Note: The Insurance Administration has noted several recent instances where agents or brokers licensed both in Maryland and in another state or the District of Columbia have placed insurance on risks located in Maryland for Maryland citizens with insurers not authorized to do business in this State. While all transactions relating to the making of this insurance may be done outside Maryland, the practice is contrary to the intent of the Legislature as expressed in Insurance Article, §§4-101(a), 4-204, and 4-205, Annotated Code of Maryland, as amended to date, and is deemed to be against the best interest of the citizens of this State.

History

Administrative History: Effective date: August 1, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .01A amended effective April 22, 1996 (23:8 Md. R. 604)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.23 to COMAR 31.03.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01A amended effective December 29, 2008 (35:26 Md. R. 2250)
Authority: Insurance Article, §§2-109, 4-201, and 4-203, Annotated Code of Maryland

31.03.05 Bail Bonds

COMAR 31.03.05.01 Scope.

A. This chapter does not apply to property bail bondsmen.

B. Except as provided in Insurance Article, §10-309, Annotated Code of Maryland, this chapter does not apply to a bail bondsman who provides bail bondsman services under Criminal Procedure Article, §5-203, Annotated Code of Maryland.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affidavit” means a dated written or printed statement of facts, made voluntarily, and confirmed by oath or affirmation of the person making it, taken before an individual having authority to administer such oath or affirmation in connection with posting a bail bond pursuant to Maryland Rule 4-217.

(2) “Appointment” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(3) “Authorized insurer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(4) “Bail bond” has the meaning set forth in Insurance Article, §10-301, Annotated Code of Maryland.

(5) “Bail bond application” means a written request to a surety insurer for a bail bond that sets forth the required information to purchase a policy of surety insurance.

(6) “Bail bondsman” means a surety insurance producer who is appointed by a surety insurer to solicit, negotiate, or procure bail bonds on behalf of that surety insurer.

(7) “Bail bondsman services” means any conduct relating to the sale, solicitation, negotiation, or procurement of a bail bond, and includes the posting of a bail bond.

(8) “Balance amount” means the amount of premium owed by a person under an installment agreement after subtracting the down payment from the premium.

(9) “Commissioner” means the Maryland Insurance Commissioner.

(10) “Indemnity agreement” means a written surety agreement that is entered into by a bail bondsman and a person who agrees to indemnify a bail bondsman or surety insurer.

(11) “Installment agreement” means a written agreement between a bail bondsman and a person in which the person agrees to pay, and the bail bondsman agrees to accept, the payment of a premium for a bail bond using installment payments.

(12) “Insurance producer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(13) “Licensed insurance producer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(14) “Property bail bondsman” has the meaning set forth in Criminal Procedure Article, §5-209, Annotated Code of Maryland.

(15) “Surety insurance” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(16) “Surety insurance producer” means a licensed insurance producer who, for compensation, sells, solicits, negotiates, or procures surety insurance contracts and is appointed by an authorized surety insurer to act as an insurance producer.

(17) “Surety insurer” has the meaning set forth in Insurance Article, §10-301, Annotated Code of Maryland.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.03 Prohibited Actions.

A. An insurer may not:

(1) Directly or indirectly pay any commission, fee, reward, or other consideration for the sale, solicitation, negotiation, or procurement, or for influencing the sale, solicitation, negotiation, or procurement of, a bail bond to any person unless that person is a bail bondsman, and is appointed by the surety insurer; or

(2) Delegate its authority to appoint a bail bondsman.

B. A person acting as a bail bondsman or a person acting on behalf of a bail bondsman may not in any manner sell, solicit, negotiate, or procure a bail bond for a surety insurer in this State unless that person is a bail bondsman and is appointed by the surety insurer.

C. A bail bondsman may not submit to any clerk, District Court commissioner, or other person authorized by law to take a bail bond, a document representing consent by any person unless the document has been fully executed.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.04 Conduct of Business by a Bail Bondsman.

The business of a bail bondsman may be conducted by an individual, partnership, or corporation, provided that an individual who sells, solicits, negotiates, or procures bail bonds shall be a bail bondsman.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.05 Appointments.

A. A bail bondsman shall:

(1) Before conducting business as a bail bondsman, be appointed by a surety insurer to provide bail bondsman services; and

(2) Comply with the requirements of Maryland Rule 4-217.

B. A surety insurer that terminates the appointment of a bail bondsman shall immediately file a written notice of the termination with the Commissioner and with the Chief Clerk of the District Court of Maryland.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.06 Suspension or Revocation.

A bail bondsman who makes a misleading or false representation to a court or to a public official for the purpose of avoiding a forfeiture of bail, having a forfeiture set aside, or obtaining the release of a defendant on the defendant’s own recognizance, shall be in violation of Insurance Article, §10-126(a)(6), (13), and (14), Annotated Code of Maryland.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.07 Rates.

A. A bail bondsman shall issue a bail bond that complies with Insurance Article, §27-216, Annotated Code of Maryland.

B. Except as provided in §C of this regulation, it shall be an unfair trade practice and a violation of the Insurance Article, §27-216, Annotated Code of Maryland, for a bail bondsman to sell, solicit, procure, or negotiate a bail bond if:

(1) A surety insurer has an approved premium rate for both cash bail bonds and corporate surety bail bonds;

(2) The premium rates differ for cash bail bonds and corporate surety bail bonds; and

(3) A defendant is sold a bail bond with the higher premium rate.

C. If a surety insurer has approved premium rates for cash bail bonds and corporate surety bail bonds, a bail bondsman may sell a defendant a bail bond regardless of the approved premium rate if the court specifies a type of bail bond.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.08 Indemnity Agreement.

An indemnity agreement shall:

A. Contain the signatures of the bail bondsman providing the bail bondsman services and the person signing the indemnity agreement;

B. Be executed prior to the issuance of a bail bond;

C. Contain the printed name and insurance producer license number of the bail bondsman providing the bail bondsman services;

D. Require the person signing the indemnity agreement to pay, and the bail bondsman to collect, the premium for the bail bond that is issued:

(1) At the time the indemnity agreement for the bail bond is executed by the bail bondsman and the person signing the indemnity agreement; or

(2) Through installment payments pursuant to a written installment agreement that complies with the requirements set forth in Regulation .09 of this chapter; and

E. Contain the following statement on the first page in capital and bold letters of at least 12-point font: “THE PERSON SIGNING THIS INDEMNITY AGREEMENT IS ENTITLED TO A REFUND OF 100% OF THE PREMIUM PAID IF THIS BAIL BOND IS NOT POSTED.”

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.09 Installment Agreement.

A. An installment agreement shall be signed by a bail bondsman and the person who has agreed to pay the additional premium in installments.

B. The installment agreement shall be written in the form adopted under Regulation .15 of this chapter and shall contain the following information:

(1) The amount of the bail bond;

(2) The amount of the premium;

(3) The amount of the down payment;

(4) The amount of the balance owed;

(5) The total number of installment payments required to pay the balance;

(6) The amount and due date of each installment payment;

(7) The printed name and insurance producer license number of the bail bondsman executing the installment agreement;

(8) The printed name of the bail bond insurance producer firm and its insurance producer license number, if the bail bondsman is employed or otherwise engaged by a bail bond insurance producer firm; and

(9) The criminal case number for which bail was posted and the installment agreement entered.

C. The bail bondsman who signed the installment agreement shall maintain records demonstrating that the bail bondsman has taken all necessary steps to collect the amount owed.

D. Evidence that a bail bondsman has taken all necessary steps to collect the amount owed under the installment agreement may include, but is not limited to:

(1) Copies of all correspondence;

(2) Meeting logs, including the date and time the bail bondsman met with the person who signed the installment agreement;

(3) Telephone logs including the date, time, and name of the person with whom the bail bondsman communicated;

(4) Evidence that the debt has been referred to a collection agency, including the date of the referral and the name of the collection agency; and

(5) A copy of a civil court action seeking the money owed by the person who signed the installment agreement to the bail bondsman, including the filing of a writ of garnishment.

E. A bail bondsman shall provide the person signing the installment agreement a copy of the installment agreement and a receipt containing the amount of down payment made.

Cross References

31.03.05.08D(2)

31.03.05.10B(15)

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.10 Records.

A. A bail bondsman shall maintain for a period of 5 years after termination of the surety liability all documentation collected, prepared, and produced by the bail bondsman in the course of providing bail bondsman services, which shall include, but is not limited to, the following:

(1) Evidence of the return of any security or collateral, including a receipt evidencing the return or repayment of the security or collateral;

(2) Copies of the affidavit made in connection with posting a bond or an indemnity agreement or collateral received; and

(3) Copies of all written representations made to any court or to any public official for the purpose of avoiding a forfeiture of bail, setting aside a forfeiture of bail, or causing a defendant to be released on the defendant’s own recognizance.

B. In addition to the records set forth in §A of this regulation, a bail bondsman’s records shall include the following information:

(1) A copy of the power of attorney form;

(2) The date the bond was executed;

(3) The name of the person who signed the indemnity agreement;

(4) The amount of the bond;

(5) The premium charged;

(6) The premium reported to the surety insurer and the date reported;

(7) A description, including the date and amount, of any collateral received;

(8) A description, including the date and amount, of any collateral returned;

(9) The indemnity agreement;

(10) The disposition of the bond, including the date of disposition;

(11) A copy of any receipt for payment made to obtain an indemnity agreement or for an installment agreement;

(12) The bail bond application;

(13) A copy of the bail bond;

(14) The installment agreement, if any; and

(15) The information required under Regulation .09D of this chapter.

C. Records required by this regulation shall be maintained in writing or by electronic means, provided that the records:

(1) Are clear and legible;

(2) Accurately reproduce an original document in its entirety, including any attachments to the document; and

(3) Preserve any signature contained on the document.

D. The certification required pursuant to Insurance Article, §10-309(e)(3), Annotated Code of Maryland, shall be submitted by December 31 on a form made available by the Commissioner.

Cross References

31.03.05.11A

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.11 Premium Receipts.

A. A bail bondsman who collects a premium shall provide a numbered receipt to the person paying the premium. A copy of the receipt shall be retained by the bail bondsman and maintained in accordance with Regulation .10 of this chapter.

B. A receipt shall contain the following information:

(1) The name, place of business, address, and telephone number of the bail bondsman who collected the premium;

(2) An itemized statement of the amount of bail and the jurisdiction for which the bond is being written;

(3) An itemized statement of the premium charged;

(4) The amount collected by the surety insurance producer;

(5) The unpaid balance, if any;

(6) The amount, value, and description of any collateral received;

(7) The following statement, in capital and bold letters of at least 12-point font, at the bottom of the receipt: THE PERSON PAYING THE PREMIUM MUST RECEIVE A COPY OF THIS RECEIPT AT THE TIME OF MAKING A PAYMENT; and

(8) The insurance producer license number and the printed and signed name of the bail bondsman collecting the premium.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.12 Forms.

A bail bondsman shall:

A. Ensure that each document provided to, or executed by, the person signing the indemnity agreement contains the name and insurance producer license number of the bail bondsman providing the bail bondsman services and the bail bond insurance producer firm, if any; and

B. Provide the person to whom the bail bondsman services are provided with a copy of:

(1) A premium receipt at the time the premium is paid;

(2) A collateral receipt at the time the collateral is given; and

(3) An installment agreement or indemnity agreement at the time that any such document is signed.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.13 Collateral.

A. A bail bondsman shall, in an affidavit, describe in detail any collateral received in connection with the sale of a bail bond and the terms of an indemnity or collateral agreement; and

B. A bail bondsman shall provide a copy of the affidavit to the person signing the indemnity agreement or the person signing the collateral agreement.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.14 Return of Collateral.

A. Immediately upon the discharge of a bail bond, the bail bondsman shall return any collateral held by the bail bondsman. Upon receiving a request for return of collateral, the bail bondsman shall promptly determine whether the bail bond has been discharged.

B. The bail bondsman may deduct any unpaid premiums due on the bail bond from any collateral being returned.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

COMAR 31.03.05.15 Installment Agreement Form.

FORM AT END OF CHAPTER

Cross References

31.03.05.09B

Attachments

31.03.05.15-form

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.94 to COMAR 31.03.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: ——————
Administrative History: Chapter revised effective March 22, 2016 (43:2 Md. R. 128)
Administrative History: Regulation .09B amended February 12, 2018 (45:3 Md. R. 158)
Administrative History: Regulation .15 adopted February 12, 2018 (45:3 Md. R. 158)
Authority: Insurance Article, §§2-108, 2-109(a)(1), 10-126, and 10-309, and Title 10, Subtitle 3, Annotated Code of Maryland

31.03.06 Surplus Lines

COMAR 31.03.06.01 Purpose.

The purpose of this chapter is to establish procedures for compliance with the Surplus Line Insurance Law, Insurance Article, Title 3, Subtitle 3, Annotated Code of Maryland.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.01-1 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Condominium” includes the common elements of a condominium.

(2) Home State.

(a) “Home State” means, except as provided in §B(2)(b) of this regulation, with respect to an insured:

(i) The state in which an insured maintains its principal place of business or, in the case of any individual, the individual’s principal residence; or

(ii) If 100 percent of the insured risk is located out of the state referred to in §B(2)(a)(i) if this regulation, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.

(b) If more than 1 insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term “Home State” means the Home State, as determined pursuant to §B(2)(a) of this regulation, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.

(3) “Qualified risk manager” means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:

(a) The person is an employee of, or third-party consultant retained by, the commercial policyholder;

(b) The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance; and

(i) The person has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the Commissioner to demonstrate minimum competence in risk management and has 3 years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance;

(ii) The person has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the Commissioner to demonstrate minimum competence in risk management, and holds:

A designation as a Chartered Property and Casualty Underwriter (in this subparagraph referred to as “CPCU”) issued by the American Institute for CPCU/Insurance Institute of America;
A designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;
A designation as a Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education and Research;
A designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or
Any other designation, certification, or license determined by the Commissioner to demonstrate minimum competency in risk management;

(iii) The person has at least 7 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance, and has any one of the designations specified in §B(3)(c)(ii)1—5 of this regulation;

(iv) The person has at least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or

(v) The person has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the Commissioner to demonstrate minimum competence in risk management.

(4) Residential Property.

(a) “Residential property” means a home, townhouse, or other habitable structure that is used principally as a residence.

(b) “Residential property” does not include:

(i) A vacant structure;

(ii) A structure with both commercial and residential use if more than 50 percent of the structure is devoted to commercial use;

(iii) An apartment building that contains more than four apartment units; or

(iv) A condominium.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.02 Maryland Surplus Lines Brokers' Licenses.

Before placing any surplus line or otherwise acting as a surplus lines broker, where Maryland is the Home State of the insured, it will be the responsibility of each individual so acting to acquire a valid Maryland surplus lines broker’s certificate of qualification. The broker will be held responsible for securing timely renewals of the broker’s certification of qualification in order to place new business and provide a continuity of service to clients for whom the broker has previously acted. Each original surplus lines broker’s certificate of qualification shall be issued for a term expiring every other year on the date stated on the certificate of qualification and may be renewed biennially thereafter.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.03 Surplus Lines Affidavits.

A surplus lines broker placing a surplus lines coverage shall execute the affidavit required by Insurance Article, §3-307, Annotated Code of Maryland, on a form provided by the Commissioner, or containing all of the information required by the Commissioner, and shall file the affidavit with the Commissioner on or before the 45th day after the last day of the quarter in which the insurance was placed.

Cross References

31.03.06.10B

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.04 Residential Property — Substantially Similar Renewal Offer.

A. Presumption. For purposes of Insurance Article, §3-306(a)(5)(iii), Annotated Code of Maryland, a renewal offer by an authorized insurer for coverage on residential property is presumed to be made on substantially the same terms and conditions as the current coverage unless the renewal offer:

(1) Contains an increase in premium of 20 percent or more;

(2) Contains an increase in the deductible of 100 percent or more; or

(3) Contains or omits any other term or condition that the Commissioner has determined in writing to result in the terms and conditions of the renewal offer not being substantially similar to the terms and conditions of the current coverage.

B. Request for Determination.

(1) Upon written request from the originating insurance producer or a surplus lines broker, the Commissioner shall provide a written determination of whether the terms and conditions of a renewal offer are substantially similar to the current coverage which will be expiring.

(2) The request shall provide, at a minimum, the following information:

(a) A description of the insured risk and the type of coverage provided;

(b) A policy number for the expiring coverage and the date that the coverage expires;

(d) Copies of the relevant policies or specific policy terms, if needed to fully explain the differences;

(e) The name, address, phone number, and electronic mail address for the individual who can respond to any questions from the Commissioner's staff; and

(f) The name and address of the individual who is to receive the Commissioner's written determination.

C. Documentation. Whenever coverage provided by an authorized insurer on residential property is replaced with coverage provided by an unauthorized insurer, the surplus lines broker or the originating insurance producer shall state in the affidavit required by Insurance Article, §3-307, Annotated Code of Maryland, or on a form approved by the Commissioner and submitted with the affidavit:

(1) Whether the authorized insurer made a renewal offer; and

(2) If the authorized insurer did make a renewal offer, the reason why the terms and conditions of the renewal offer were not substantially similar to the terms and conditions of the coverage previously provided.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.05 Surplus Lines Reports and Premium Receipts Tax.

A. Each surplus lines broker that has transacted surplus lines business in the State during the preceding half calendar year shall file with the Commissioner a semiannual statement that reports on business subject to the tax imposed by Insurance Article, §3-324, Annotated Code of Maryland, during the preceding half calendar year. The report shall be made in accordance with the form prescribed by the Commissioner and available from the Commissioner’s office.

B. The broker shall deliver the report to the office of the Commissioner on or before March 15 and September 15 of each year.

C. The March 15 report shall cover the business placed between July 1 and December 31, inclusive, of the preceding calendar year. The September report shall cover the business placed between January 1 and June 30, inclusive, of the calendar year in which the report is made.

D. The reports shall be open to public inspection and shall include:

(1) The gross amount of each kind of insurance business transacted and the aggregate gross premiums charged;

(2) The aggregate of returned premiums and taxes paid to insureds;

(3) The aggregate of net premiums; and

(4) Any additional information required by the form.

E. All premiums and taxes, including additional and return premiums and taxes, may be reported and paid on a placed or written basis but shall be paid in any case for the full term of the policy, whether or not one or more installments of premium remain unearned and payable at some future date or dates during the term of policy. In computing the tax due, the broker may deduct the expense of any examination made in accordance with Insurance Article, §§2-208 and 3-325(d), Annotated Code of Maryland, during the period covered by the report.

Cross References

31.03.06.06B

31.03.06.06C

31.03.06.06D

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.06 Compliance with Filing and Premium Receipts Tax Payment Requirements.

A. A report, affidavit, or return that must be filed under this chapter complies with the filing requirement if the report, affidavit, or return is:

(1) Mailed or postmarked by the United States Postal Service on or before the filing date;

(2) Delivered on or before the filing date to a private delivery service recognized by the Commissioner, if the delivery is evidenced by a receipt; or

(3) Transmitted electronically on or before the filing date in a manner approved by the Commissioner.

B. Each broker shall remit the full amount of the premium receipts tax appearing on the report filed pursuant to Regulation .05 of this chapter at the time the report is filed.

C. Each broker shall remit the full amount of the premium receipts tax in the manner directed by the Commissioner on the form prescribed by the Commissioner pursuant to Regulation .05 of this chapter.

D. With respect to premium receipts tax due to the State, a surplus lines broker who fails to pay a tax when a report under Regulation .05 of this chapter is due, or fails to file a report, is subject to the provisions of Insurance Article, Title 6, Subtitle 1, Annotated Code of Maryland related to penalties, audits, assessments, limitations, appeals, and refunds.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.07 Books and Records.

A. Every surplus lines broker shall keep a separate record and account of all business transacted under the surplus lines broker's license, including a copy of each daily report, if any, and of each binder or cover note delivered by the surplus lines broker. The records shall be available for examination by the Commissioner at any reasonable time within 3 years after the issuance of the coverage to which the records relate.

B. Every surplus lines broker shall maintain an adequate record of all return or additional premiums resulting from cancellations, adjustments made on deposit or minimum premiums, audit premiums, additional or return premiums as a result of endorsement to existing policies, additional or return premiums resulting from changes in the amount or type of coverage, and other changes resulting from any other cause.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.08 Illegal Coverage.

A surplus lines broker may not place with an unauthorized insurer any risk, whether individual or group, including any fictitious fleet or fictitious group, which is not eligible for placement with authorized insurers under the provisions of the Insurance Article, Annotated Code of Maryland.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.09 Disclosure Form.

A. Printing Specifications; Provision of Form to Insured. The written disclosure required by Insurance Article, §3-308, Annotated Code of Maryland, shall be:

(1) In the form set forth in §B of this regulation in at least 14-point type;

(2) On a separate piece of paper that:

(a) Contains only the disclosure; and

(b) Is attached to the insurance contract or binder; and

(3) Provided to the insured at the time of the initial purchase or delivery of an insurance contract or binder from a surplus lines insurer and at each renewal of the insurance contract.

B. Form.

DISCLOSURE REGARDING SURPLUS LINES INSURANCE.

Please Read the Following Carefully Before Purchasing Insurance From a Surplus Lines Insurer.

This policy is issued by a surplus lines insurer that has been approved by the Maryland Insurance Administration to issue insurance policies in the surplus lines insurance market. Surplus lines insurers are not under the jurisdiction of the Maryland Insurance Administration and do not possess a certificate of authority to transact insurance business in the State of Maryland. Because surplus lines insurers are not under the jurisdiction of the Maryland Insurance Administration, your ability to seek assistance from the State if you have a problem with your insurance company is limited.

Property and Casualty Insurance Guaranty Corporation and Maryland Life and Health Insurance Guaranty Corporation provide funds that permit certain claimants or policyholders to receive payment of covered claims if their insurance company becomes insolvent (i.e., bankrupt) and is unable to pay the claims. However, these funds do not apply to surplus lines insurers, as a surplus lines insurer is not a member insurer of the Property and Casualty Insurance Guaranty Corporation or the Maryland Life and Health Insurance Guaranty Corporation. If a surplus lines insurer becomes insolvent (i.e. bankrupt), any claim that you have against the surplus lines insurer will not be covered by the funds administered by Property and Casualty Insurance Guaranty Corporation and Maryland Life and Health Insurance Guaranty Corporation.

If you have any questions regarding this disclosure or surplus lines insurance, please contact the Maryland Insurance Administration at 410-468-2340.

C. In addition to the disclosure required by §B of this regulation, the surplus lines broker shall:

(1) Provide a clear and conspicuous written disclosure to the prospective insured of:

(a) Any inspection fee;

(b) The total amount of the policy fee;

(d) Any financial interest of the person performing the inspection, if applicable;

(e) Whether the surplus lines broker will receive compensation from the person that performs the inspection; and

(f) Any charge for actual expenses incurred by the surplus lines broker for payment of the premium, policy fee, and any other fees and taxes relating to the policy by use of a credit card; and

(2) Notify the prospective insured of the option to obtain the inspection from another person who meets the requirements of or is approved by the surplus lines broker.

D. Signature of Insured on Disclosure Form for Policies Covering Residential Property or a Condominium.

(1) This section applies only to the written disclosure form for an insurance policy covering residential property or a condominium.

(2) In addition to the text required by §B of this regulation, the disclosure form for an insurance policy covering residential property or a condominium shall include blanks for the insured's signature, the insured's printed name, and the execution date.

(3) Whenever residential property or condominium insurance is placed or renewed with a surplus lines insurer, the originating insurance producer shall obtain the signature of the insured, the insured's printed name, and the execution date on the disclosure form.

(4) On execution, the originating insurance producer shall:

(a) Send the original copy of the disclosure form to the surplus lines broker;

(b) Provide a copy of the disclosure form to the insured; and

(c) Keep a copy of the disclosure form in the files of the originating insurance producer for at least 3 years after the date of execution by the insured.

(5) The surplus lines broker shall:

(a) Retain the original copy of the disclosure form for at least 3 years after the date of execution by the insured; and

(b) Make the disclosure form available for inspection by the Commissioner on request.

E. Disclosure Form Requirements for Policies Not Covering Residential Property or a Condominium.

(1) This section applies only to a written disclosure form for an insurance policy that does not cover residential property or a condominium.

(2) The surplus lines broker or the originating insurance producer shall provide the insured with the written disclosure required by §B of this regulation in the manner specified by §A of this regulation.

(3) The surplus lines broker or the originating insurance producer shall:

(a) Certify on a form approved by the Commissioner that the disclosure notice required by this regulation has been delivered to the insured with the insurance policy or binder; or

(b) Obtain from the insured written acknowledgment of receipt of the disclosure form.

(4) If the surplus lines broker or the originating insurance producer obtains written acknowledgement of receipt of the disclosure form, the surplus lines broker or the originating insurance producer shall:

(a) Retain for at least 3 years a copy of the written acknowledgment of receipt from the insured; and

(b) Make the acknowledgment available for inspection by the Commissioner on request.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.10 Surplus Lines Exportable List.

A. Diligent Search Not Required. In accordance with Insurance Article, §3-306.1(b)(1), Annotated Code of Maryland, a coverage that is listed in §C of this regulation may be placed with a surplus lines insurer without first conducting a diligent search as defined by Insurance Article, §3-306.1(a), Annotated Code of Maryland.

B. Affidavit Required. When a coverage that is listed in §C of this regulation is placed with a surplus lines insurer, the originating insurance producer shall execute and file an affidavit in accordance with Insurance Article, §3-307, Annotated Code of Maryland, and Regulation .03 of this chapter.

C. The surplus lines exportable list is as follows:

(1) Amusement devices;

(2) Animal mortality;

(3) Armored cars;

(4) Auto racing and auto race tracks;

(5) Aviation—crop dusters;

(6) Billiard halls;

(7) Bowling alleys—property damage only;

(8) Builders risk—all risks form (non-Bureau form);

(9) Building demolition—including use of explosives;

(10) Carnivals and circuses;

(11) Child and adult care centers, convalescent homes, or community residence facilities;

(12) Difference in condition—parasol;

(13) Directors' and officers' liability for the following:

(a) Coverages:

(i) Employment practices liability;

(ii) Entity liability coverage;

(iii) Non-monetary damages;

(iv) Liability for prior acts; or

(v) Fiduciary liability; or

(b) Classes:

(i) Entities involved in initial public offerings of securities;

(ii) Nonprofit organizations with negative fund balances;

(iii) Entities in business for less than 3 years; or

(iv) Financially distressed risks, including risks in pending or threatened bankruptcy, risks operating under Chapter 11 of the Bankruptcy Code, or risks unable to meet their financial obligations out of current assets;

(14) Employment practices liability for the following coverages:

(a) Family Medical Leave Act liability;

(b) False imprisonment;

(d) Interference with contractual relations;

(e) Negligent supervision or hiring;

(f) Damages for breach of express contract;

(g) Mergers;

(h) Prior acts;

(i) Punitive or liquidated damages; or

(j) Prior knowledge;

(15) Environmental impairment liability;

(16) Excess automobile and motorcycle;

(17) Exercise and health clubs;

(18) Excess liability;

(19) Exterminators;

(20) False arrest liability;

(21) Fire and general liability on buildings occupied as auction markets or farmers' markets;

(22) Fire and general liability on buildings occupied as bars, restaurants, or night clubs, with or without entertainment;

(23) Fireworks displays;

(24) Flood and water damage — excess of federal flood insurance programs or primary coverage that is at least as broad as the coverage available through the federal flood insurance program;

(25) Golf driving ranges;

(26) Holdup, theft, and robbery coverages for:

(a) Automated teller machines;

(b) Check cashing businesses;

(d) Taverns;

(e) Package stores;

(f) Carnivals;

(g) Fairs; and

(h) Exhibitions;

(27) House movers and house wreckers;

(28) Libel and slander;

(29) Liquor liability;

(30) Non-appearance, event cancellation, or weather insurance;

(31) Physical damage:

(a) Automobile physical damage for antique vehicles, high-value vehicles, kits, replicas, and custom-made vehicles; or

(b) Vehicle physical damage for vehicles with a gross vehicle weight classified by the Insurance Services Office (ISO) as medium or heavier;

(32) Pollutants—first and/or third-party coverages for existence or removal, or both, of a broad range of contaminants or pollutants;

(33) Prize indemnification;

(34) Professional liability—miscellaneous errors and omissions, except for those professions and occupations available in the admitted market, including architects, engineers, physicians, lawyers, travel agents, real estate brokers, and insurance producers;

(35) Riding academies and pony rides (on location or away from premises);

(36) Risks in bankruptcy;

(37) Securities Exchange Act liability;

(38) Short-term events;

(39) Short-term homeshare business multi-peril;

(40) Skating rinks—roller and ice;

(41) Space satellites or craft;

(42) Sporting events;

(43) Stop loss and excess aggregate over self-insured retention (S.I.R.)—all lines not excluded pursuant to Insurance Article, §3-302, Annotated Code of Maryland;

(44) Substandard fire risks not eligible for Fair Plan;

(45) Swimming clubs, water skiing clubs, and swimming pools;

(46) Tanning beds or salons;

(47) Tattoo parlors;

(48) Umbrella liability:

(a) With no self-insured retention;

(b) With defense costs outside policy limits; or

(49) Vacant or unoccupied buildings; and

(50) Warehousepersons' legal liability.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

COMAR 31.03.06.11 Exempt Commercial Purchaser — Waiver of Diligent Search Requirement.

A. Scope. This regulation does not apply to:

(1) Professional liability insurance;

(2) Title insurance; or

(3) Workers' compensation insurance.

B. In this regulation, “Exempt Commercial Purchaser” means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:

(1) The person employs or retains a qualified risk manager to negotiate insurance coverage;

(2) The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months; and

(3) The person meets at least 1 of the following criteria:

(a) The person possesses a net worth in excess of $20,000,000, as such amount is adjusted pursuant to §C of this regulation;

(b) The person generates annual revenues in excess of $50,000,000, as such amount is adjusted pursuant to §C of this regulation;

(c) The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate;

(d) The person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to §C of this regulation; or

(e) The person is a municipality with a population in excess of 50,000 persons.

C. Effective on the fifth January 1 occurring after July 21, 2011, and each fifth January 1 occurring thereafter, the amounts in §B(3)(a), (b), and (d) of this regulation shall be adjusted to reflect the percentage change for the 5-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.

D. Waiver of Diligent Search Requirement.

(1) An Exempt Commercial Purchaser may waive the diligent search requirement of Insurance Article, §3-306, Annotated Code of Maryland, for the procurement of a surplus lines insurance policy if:

(a) The surplus lines broker has disclosed to the Exempt Commercial Purchaser that the insurance may or may not be available from admitted insurers that may be subject to greater protection and regulatory oversight; and

(b) The Exempt Commercial Purchaser subsequently has requested the surplus lines broker in writing to procure nonadmitted insurance from or place the nonadmitted insurance with a nonadmitted insurer.

(2) The surplus lines broker shall:

(a) Retain for at least 3 years a copy of the written request document signed by the Exempt Commercial Purchaser; and

(b) Make the written request document available for inspection by the Commissioner on request.

E. Procurement That Is Not Authorized By Regulation. This regulation does not authorize an Exempt Commercial Purchaser to procure surplus lines insurance:

(1) Solely to obtain a lower premium rate than would be accepted by an authorized insurer;

(2) Solely to obtain more favorable terms of the insurance contract; or

(3) To replace coverage on residential property that is insured by an authorized insurer and for which a renewal offer has been made on substantially the same terms and conditions as the current coverage.

F. Premium Tax. This regulation does not exempt an Exempt Commercial Purchaser from payment of the premium tax on surplus lines insurance pursuant to Insurance Article, §3-324, Annotated Code of Maryland.

History

Administrative History: Effective date: March 1, 1968
Administrative History: Amended effective January 1, 1971
Administrative History: Regulations .01—.12 repealed effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: ——————
Administrative History: Regulations .01—.08 adopted effective June 1, 1983 (10:9 Md. R. 790)
Administrative History: Regulation .02 amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05D amended effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Appendix A repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.22 to COMAR 31.03.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01-1 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .01-1 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .01-1B amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .02 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260); October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .03 amended as an emergency provision effective December 15, 2007 (34:1 Md. R. 30); amended permanently effective February 12, 2007 (34:3 Md. R. 303)
Administrative History: Regulation .03 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .04 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05 amended effective February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675); October 2, 2017 (44:19 Md. R. 898)
Administrative History: Regulation .06 amended effective April 10, 2006 (33:7 Md. R. 675); February 20, 2012 (39:3 Md. R. 260)
Administrative History: Regulation .07A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .09 adopted effective June 11, 2001 (28:11 Md. R. 1055)
Administrative History: Regulation .09 amended effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .09 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09 amended effective May 18, 2016 (43:6 Md. R. 412); June 18, 2018 (45:12 Md. R. 621)
Administrative History: Regulation .09C, D amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status expired December 25, 1999
Administrative History: Regulation .10 adopted effective May 1, 2000 (27:8 Md. R. 806)
Administrative History: Regulation .10B, C amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .10C amended effective October 20, 2008 (35:21 Md. R. 1828); February 20, 2012 (39:3 Md. R. 260); February 27, 2017 (44:4 Md. R. 255); May 18, 2020 (47:10 Md. R. 520)
Administrative History: Regulation .11 adopted effective January 7, 2002 (28:26 Md. R. 2275)
Administrative History: Regulation .11 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1938); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .11 amended effective February 20, 2012 (39:3 Md. R. 260)
Authority: Insurance Article, §§2-109, 3-304, 3-306—3-308, 3-311—3-313, 3-316, 3-325(c), 9-301(f), 9-303(5), 9-401(j)(1) and (2), 9-405(b), and 27-216, Annotated Code of Maryland

31.03.07 Installment Vendors Doing Business In Maryland (Such as Auto Dealers, Boat Dealers, Appliance Dealers, Loan Companies)

COMAR 31.03.07.01 Violations.

It has come to the attention of the Insurance Administration that installment vendors may be selling insurance in conjunction with their retail installment sales without proper insurance producers' licenses. These sales or service of insurance are violations of the Insurance Article, Annotated Code of Maryland, and this chapter.

History

Administrative History: Effective date: November 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.17 to COMAR 31.03.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 repealed effective May 18, 2016 (43:6 Md. R. 412)
Authority: Insurance Article, §§1-201, 2-109, 10-103, 10-130, and 10-131, Annotated Code of Maryland

COMAR 31.03.07.02 Requirements.

Installment vendors shall comply with the requirements of Insurance Article, §§1-201, 10-103, 10-130, and 10-131, Annotated Code of Maryland.

History

Administrative History: Effective date: November 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.17 to COMAR 31.03.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 repealed effective May 18, 2016 (43:6 Md. R. 412)
Authority: Insurance Article, §§1-201, 2-109, 10-103, 10-130, and 10-131, Annotated Code of Maryland

COMAR 31.03.07.03 Employees To Read this Chapter.

Installment vendors should make certain that this chapter of regulations is read by all their employees that may be affected by it.

History

Administrative History: Effective date: November 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.17 to COMAR 31.03.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .04 repealed effective May 18, 2016 (43:6 Md. R. 412)
Authority: Insurance Article, §§1-201, 2-109, 10-103, 10-130, and 10-131, Annotated Code of Maryland

COMAR 31.03.08 Licensing Services — Designation of Contractor — Payment for Services [Repealed]

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective September 19, 1997 (24:21 Md. R. 1445); adopted permanently effective March 9, 1998 (25:5 Md. R. 368)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.29 to COMAR 31.03.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective October 5, 1998 (25:20 Md. R. 1534)
Administrative History: ——————
Administrative History: Chapter repealed effective April 10, 2006 (33:7 Md. R. 675)

31.03.09 Staggered System for Renewal of Licenses

COMAR 31.03.09.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “License” has the meaning stated in Insurance Article, §10-101(d), Annotated Code of Maryland.

History

Administrative History: Effective date: August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-108, 2-109, and 10-115, Annotated Code of Maryland

COMAR 31.03.09.02 Establishment of Staggered System of Renewals.

A. In General. The Administration may establish a staggered system of renewal for licenses.

B. Uniform Distribution of Renewal Dates.

(1) The Administration shall establish staggered renewal dates for licenses so that approximately the same number of licenses are renewed each day.

(2) From time to time, the Administration shall evaluate the monthly volume of license renewals for the purpose of maintaining relatively uniform workloads.

(3) The Administration may adjust the monthly volumes of license renewals by:

(a) Changing the month of expiration of a license;

(b) Prorating the renewal fee for the license and the fraud prevention fee in accordance with Regulation .04 of this chapter; and

(c) Prorating the continuing education hours for renewal of the license in accordance with Regulation .05 of this chapter.

Cross References

31.03.09.03B

31.03.09.05B(1)

31.03.09.05B(2)

History

Administrative History: Effective date: August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-108, 2-109, and 10-115, Annotated Code of Maryland

COMAR 31.03.09.03 Term and Renewal of Licenses.

A. Term. The term of a license is 2 years from the date of issuance.

B. Renewal. The Administration shall renew licenses for a term of 2 years from the date of renewal unless the Administration changes the expiration date under Regulation .02B(3) of this chapter.

History

Administrative History: Effective date: August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-108, 2-109, and 10-115, Annotated Code of Maryland

COMAR 31.03.09.04 Proration of Fees.

A. Renewal Fees. If the Administration is required to charge a prorated renewal fee for a license, the Administration shall calculate the amount of the prorated fee by:

(1) Dividing the appropriate renewal fee listed in Insurance Article, §2-112, Annotated Code of Maryland, by 24;

(2) Multiplying the quotient obtained under §A(1) of this regulation by the number of months for which the license is issued or renewed; and

(3) Rounding the product obtained under §A(2) of this regulation to the nearest dollar, with amounts ranging from 1 cent to 50 cents rounded down to the next lower dollar and amounts ranging from 51 cents to 99 cents rounded up to the next higher dollar.

B. Fraud Prevention Fee. If the Administration is required to charge a prorated fraud prevention fee, the Administration shall calculate the amount of the prorated fee by:

(1) Dividing the fraud prevention fee listed in Insurance Article, §6-203, Annotated Code of Maryland, by 24;

(2) Multiplying the quotient obtained under §B(1) of this regulation by the number of months for which the license is issued or renewed; and

(3) Rounding the product obtained under §B(2) of this regulation to the nearest dollar, with amounts ranging from 1 cent to 50 cents rounded down to the next lower dollar and amounts ranging from 51 cents to 99 cents rounded up to the next higher dollar.

Cross References

31.03.09.02B(3)(b)

History

Administrative History: Effective date: August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-108, 2-109, and 10-115, Annotated Code of Maryland

COMAR 31.03.09.05 Proration of Continuing Education Credit Hours.

A. General Continuing Education Requirements. Except as otherwise provided by Insurance Article, §10-116, Annotated Code of Maryland, the holder of a license shall complete 16 credit hours of continuing education before the holder may renew the license.

B. Proration.

(1) The holder of a license whose date of expiration is changed by the Administration pursuant to Regulation .02B(3)(a) of this chapter, who has held a license for fewer than 25 consecutive years, shall successfully complete the following number of credit hours of continuing education before the holder may renew the license and receive a license with a 2-year term:

(a) For a license changed to a term of 1 year to 1 1/2 years, 8 credit hours;

(b) For a license changed to a term of more than 1 1/2 years but not more than 2 years, 12 credit hours;

(d) For a license changed to a term of more than 2 1/2 years but not more than 3 years, 20 credit hours.

(2) The holder of a license whose date of expiration is changed by the administration pursuant to Regulation .02B(3)(a) of this chapter, who has held a license for 25 or more consecutive years, beginning on the date of expiration, and counting back to the year that the license was first obtained, shall successfully complete 50 percent of the credit hours of continuing education required in §B(1) of this regulation before the holder may renew the license and receive a license with a 2-year term.

(3) If the holder of a license whose date of expiration is changed has a license for both property or casualty, or any subdivision of property or casualty, and life or health, or any subdivision of life or health, in order to renew the license, the holder of the license shall successfully complete a minimum of:

(a) 25 percent of the required credit hours in one or more courses designated “Property/Casualty”; and

(b) 25 percent of the required credit hours in one or more courses designated “Life/Health”.

(4) National Examination.

(a) If the holder of a license whose date of expiration is changed receives a passing score on a national examination on or before the day before the expiration date of the license, the holder of the license shall receive the number of continuing education credit hours that the Commissioner has approved for the examination towards the credit hours needed to renew the license.

(b) If the holder of a license whose date of expiration is changed receives a passing score on a national examination on or after the expiration date of the license, the holder of the license shall receive the number of continuing education credit hours that the Commissioner has approved for the examination towards the next license renewal.

Cross References

31.03.09.02B(3)(c)

History

Administrative History: Effective date: August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Chapter revised effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §§2-108, 2-109, and 10-115, Annotated Code of Maryland

31.03.10 Advisers

COMAR 31.03.10.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Adviser” has the meaning stated in Insurance Article, §10-201(b), Annotated Code of Maryland.

(2) “Licensed insurance producer” has the meaning stated in Insurance Article, §1-101(w), Annotated Code of Maryland.

History

Administrative History: Effective date: January 21, 2002 (29:1 Md. R. 26)
Authority: Insurance Article, §§2-109, 10-202, and 10-203, Annotated Code of Maryland

COMAR 31.03.10.02 Representation by Member of Trade Association.

A. In General. A person is not required to be licensed as an adviser under Insurance Article, §10-203, Annotated Code of Maryland, in order to represent to the public that the person is a member of a trade association or similar organization that uses the term “insurance adviser” or a similar term in the name of the association or organization if the person:

(1) Is a member in good standing of the trade association or similar organization at the time that the person makes the representation;

(2) Does not otherwise act as an adviser or represent that the person is an adviser; and

(3) Makes the representation in accordance with the requirements of §B of this regulation.

B. Manner of Representation. A person who otherwise qualifies to make a representation under §A of this regulation may make the representation only if the person:

(1) Expressly qualifies the representation by use of a disclaimer such as “not a licensed insurance adviser” or, if the person is a licensed insurance producer, “licensed insurance producer only”; or

(2) Makes the representation:

(a) During a meeting of the trade association or similar organization held for the purpose of conducting the association's or organization's general business activities;

(b) In a newspaper, newsletter, e-mail, or similar publication or electronic communication that is intended to be distributed only to members of the trade association or similar organization;

(d) During an approved continuing education class for licensed insurance producers.

C. Manner of Disclaimer. A person who is required to make a disclaimer under §B(1) of this regulation shall make the disclaimer:

(1) At the same time and in the same medium as the representation; and

(2) If the representation is made in writing, on the same document or screen close to the representation.

History

Administrative History: Effective date: January 21, 2002 (29:1 Md. R. 26)
Authority: Insurance Article, §§2-109, 10-202, and 10-203, Annotated Code of Maryland

31.03.11 Motor Vehicle Rental Companies—Limited Lines License

COMAR 31.03.11.01 Scope.

This chapter applies to motor vehicle rental companies that sell or offer any insurance coverage in this State to a motor vehicle renter in connection with, and incidental to, a motor vehicle rental agreement.

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Franchisee” means a person to whom a franchise has been granted by a motor vehicle rental company under Business Regulation Article, Title 14, Subtitle 2, Annotated Code of Maryland.

(2) “Limited lines license” means a limited lines license to sell insurance in connection with, and incidental to, the rental of a vehicle.

(3) Motor Vehicle Rental Company.

(a) “Motor vehicle rental company” means a person that is in the business of providing motor vehicles to the public under a rental agreement for a period of 180 days or less.

(b) “Motor vehicle rental company” includes a franchisee or subsidiary that is in the business of providing motor vehicles to the public under a rental agreement for a period of 180 days or less.

(4) “Rental agreement” means a written agreement containing the terms and conditions that govern the use of a vehicle provided by a motor vehicle rental company under the provisions of Transportation Article, Title 18, Annotated Code of Maryland.

(5) “Renter” means a person obtaining the use of a vehicle from a motor vehicle rental company under the terms of a rental agreement.

(6) “Subsidiary” means a business entity that is directly or indirectly controlled by a motor vehicle rental company.

(7) “Vehicle” means a motor vehicle of the:

(a) Private passenger type, including passenger vans, minivans, and sport utility vehicles; or

(b) Cargo type, including cargo vans, pickup trucks, and trucks that do not require the operator to possess a commercial driver's license.

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.03 Limited Lines License and Appointment Required.

Before a motor vehicle rental company or an employee of a motor vehicle rental company sells or offers any policies of insurance in this State to a renter in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall:

A. Hold a limited lines license issued by the Commissioner; and

B. Have on file with the Commissioner an appointment from each authorized insurer that the motor vehicle rental company intends to represent.

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.04 Application for Limited Lines License.

An applicant for a limited lines license shall:

A. Submit an application to the Commissioner on the form approved by the Commissioner;

B. Pay to the Commissioner the applicable fee required under Insurance Article, §2-212, Annotated Code of Maryland, for an insurance producer license;

C. Submit with the application a disclosure as set out in Regulation .06 of this chapter, including any brochures or other written material;

D. Submit with the application the filing required by Regulation .07C of this chapter that describes the training program that a motor vehicle rental company must have approved by the Commissioner;

E. If applicable, submit a written agreement signed by an officer of each insurer represented by the motor vehicle rental company that the premiums collected from a renter for the insurance do not need to be segregated from other funds collected by the motor vehicle rental company in connection with the vehicle rental; and

F. Submit any other information or documentation that the Commissioner requires, including any information or documentation to determine the professional competence, good character, and trustworthiness of the motor vehicle rental company.

Cross References

31.03.11.05A

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.05 Issuance, Term, and Renewal of Limited Lines License.

A. Issuance. The Commissioner shall issue a limited lines license to each applicant who meets the requirements of Regulation .04 of this chapter and Insurance Article, §§10-603 and 10-604, Annotated Code of Maryland.

B. Term and Renewal. A limited lines license expires every other year on the anniversary date of the issuance of the license unless renewed as provided in Insurance Article, §10-115, Annotated Code of Maryland.

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.06 Disclosures.

A. In General. Before the completion of a rental transaction, a motor vehicle rental company shall provide to a prospective renter who purchases any of the insurance coverages a disclosure that meets the requirements of this regulation.

B. Sale or Offer of Insurance on Business Premises. If a motor vehicle rental company sells or offers to sell insurance on any business premises of the motor vehicle rental company in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall prominently display on the premises and make readily available to prospective renters a disclosure that meets the requirements of §F of this regulation.

C. Sale or Offer of Insurance Over Telephone. If a motor vehicle rental company sells or offers to sell insurance over the telephone in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall, if the prospective renter requests insurance coverage or information on insurance coverage or otherwise indicates an interest in insurance coverage, advise the prospective renter that the State of Maryland has a consumer disclosure relating to insurance coverage for rental vehicles and offer to read the prospective renter a disclosure that meets the requirements of §F of this regulation.

D. Sale or Offer of Insurance Through a Web Site. If a motor vehicle rental company sells or offers to sell insurance through a web site in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall include on the web site an electronic disclosure that meets the requirements of §F of this regulation:

(1) As part of any description of the insurance coverage that is included on the web site; and

(2) On the same screen in close proximity to any click-through process or other electronic process that allows a prospective renter to indicate that the prospective renter would like to purchase insurance.

E. Completion of Transaction.

(1) When a renter goes to the business premises of a motor vehicle rental company to take possession of a vehicle pursuant to a rental agreement, the renter may reject or select any insurance coverage offered in connection with, and incidental to, the rental agreement regardless of any previous decision that the renter made by telephone or over the internet regarding insurance coverage.

(2) An insurer, or a motor vehicle rental car company on behalf of an insurer, may not charge a renter a premium for any insurance coverage that the renter rejects when the renter takes possession of a vehicle regardless of any previous decision that the renter made by telephone or over the internet regarding insurance coverage.

F. Form and Content of Disclosure. The disclosures required by §§A—D of this regulation shall include the following:

(1) A summary that clearly and correctly describes the material terms of coverage offered to the renter, including any limitations or exclusions pertaining to that coverage;

(2) The name of the authorized insurer;

(3) A statement that the coverage offered by the motor vehicle rental company may provide duplication of coverage already provided by the renter's personal automobile insurance policy, homeowner's insurance policy, personal liability policy, or other source of coverage;

(4) A statement, if in writing in at least 10-point type, that:

“You may not need the automobile insurance offered by the (insert motor vehicle rental company name). Your automobile insurance policy may provide coverage for your liability while operating a rental vehicle. You should check the terms and conditions of your automobile insurance policy to determine if coverage is provided for this rental. The purchase of insurance is not required as a condition of renting an automobile. In addition, if you are driving this rental vehicle due to an accident or repairs, state law may require your personal automobile liability policy to provide coverage and purchase of any excess liability coverage may duplicate coverage required by law to be provided by the owner of the rental vehicle.”; and

(5) A description of the process through which the renter can file a claim, including the insurer's address, and where the claim should be filed.

G. Filing and Approval of Disclosure.

(1) Before providing the written disclosure required by §B of this regulation to a prospective renter, a motor vehicle rental company shall file with the Commissioner a copy of all written materials containing the disclosure.

(2) Before providing the oral disclosure required by §C of this regulation to a prospective renter over the telephone, a motor vehicle rental company shall file the text of the oral disclosure with the Commissioner.

(3) Before providing the electronic disclosure required by §D of this regulation to a prospective renter through a web site, a motor vehicle rental company shall:

(a) Provide the Commissioner with access to an electronic prototype of the web site; or

(b) File with the Commissioner a printout of each screen that contains the disclosure.

(4) The Commissioner may disapprove a written, oral, or electronic disclosure at any time if the Commissioner determines that the disclosure does not comply with Insurance Article, §10-604, Annotated Code of Maryland.

(5) If the Commissioner does not disapprove a written or oral disclosure, the disclosure is deemed to be approved 60 days after filing.

(6) If the Commissioner does not disapprove an electronic disclosure through a web site, the disclosure is deemed to be approved 60 days after:

(a) The Commissioner is provided with access to an electronic prototype of the web site; or

(b) A printout of each screen that contains the disclosure is filed with the Commissioner.

(7) The Commissioner may extend the time for review of a disclosure under §G(5) or (6) of this regulation for not more than 30 days.

Cross References

31.03.11.04C

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.11.07 Training Program.

A. In General.

(1) Each motor vehicle rental company shall have a training program for its employees who sell, solicit, or negotiate insurance coverage under this chapter.

(2) Employees shall take the course, in person, before selling, soliciting, or negotiating insurance coverage.

B. The training program shall include instruction:

(1) About the kinds of insurance that motor vehicle rental companies may sell or offer under this chapter;

(2) That the trainee shall inform a renter that purchasing any insurance from the motor vehicle rental company is not required in order to rent a vehicle;

(3) That the trainee shall inform a renter that the purchase of insurance may be a duplication of coverage already provided by the renter's personal automobile insurance policy, homeowner's insurance policy, liability policy, or other source of coverage; and

(4) About all the other requirements of Insurance Article, §§10-605 and 10-606, Annotated Code of Maryland.

C. Approval of Training Program.

(1) The training program shall be approved by the Commissioner before it is implemented.

(2) A motor vehicle rental company that proposes to conduct a training program shall file with the Commissioner:

(a) A description or outline of the course or video tapes of the course;

(b) Copies of all written materials to be used in the course or with the video tapes; and

Cross References

31.03.11.04D

History

Administrative History: Effective date: September 1, 2002 (29:11 Md. R. 890)
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.03.12.01 Purpose.

The purpose of this chapter is to establish procedures and requirements for individuals who are required by 18 U.S.C. §1033 to obtain written consent from the Commissioner before the individuals may engage in the business of insurance in the State.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Application counselor” has the meaning stated in Insurance Article, §31-101(a-1), Annotated Code of Maryland.

(2) Application Form.

(a) “Application form” means a standardized application form developed by the Insurance Administration for submission by individuals applying for a written consent to engage in the business of insurance in the State under this chapter.

(b) “Application form” includes the short application form and the comprehensive application form.

(3) Business of Insurance.

(a) “Business of insurance” means writing insurance or reinsuring risks.

(b) “Business of insurance” includes:

(i) All acts necessary or incidental to writing insurance or reinsuring risks;

(ii) The activities of an individual who acts as, or is, an officer, director, agent, or employee of an insurer; and

(iii) The activities of any other individual who is authorized to act on behalf of an officer, director, agent, or employee of an insurer.

(4) “Commissioner” means the Maryland Insurance Commissioner.

(5) “Felony involving breach of trust” includes any felony constituting or involving misuse, misapplication, or misappropriation of anything of value that:

(a) Is held as a fiduciary; or

(b) Belongs to any public, private, or charitable organization.

(6) “Felony involving dishonesty” includes any felony constituting or involving:

(a) Perjury;

(b) Bribery;

(d) Counterfeiting;

(e) False or misleading oral or written statements;

(f) Deception;

(g) Fraud;

(h) Schemes or artifices to deceive or defraud;

(i) Material misrepresentation; and

(j) Failure to disclose material facts.

(7) “Fiduciary” includes an individual acting as:

(a) A trustee;

(b) An administrator;

(d) A conservator;

(e) A receiver;

(f) A guardian;

(g) An agent;

(h) An employee;

(i) A partner;

(j) An officer;

(k) A director; or

(l) A public servant.

(8) “Individual Exchange” has the meaning stated in Insurance Article, §31-101(h), Annotated Code of Maryland.

(9) “Individual Exchange navigator” has the meaning stated in Insurance Article, §31-101(i), Annotated Code of Maryland.

(10) “Interstate commerce” means commerce:

(a) Within the District of Columbia or any territory or possession of the United States;

(b) Between any point in a state, territory, possession, or the District of Columbia and any point outside the state, territory, possession, or the District of Columbia;

(d) Over which the United States has jurisdiction.

(11) “NAIC” means the National Association of Insurance Commissioners.

(12) “SHOP Exchange” has the meaning stated in Insurance Article, §31-101(w), Annotated Code of Maryland.

(13) “SHOP Exchange navigator” has the meaning stated in Insurance Article, §31-101(x), Annotated Code of Maryland.

(14) “State” means:

(a) Any state;

(b) The District of Columbia;

(d) The Northern Mariana Islands;

(e) The Virgin Islands;

(f) American Samoa; and

(g) The Trust Territory of the Pacific Islands.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.03 Written Consent Required.

A. Scope. This regulation applies to the following individuals:

(1) An officer, director, or employee of a domestic insurer;

(2) An individual who performs substantial insurance-related activities for a domestic insurer or a resident licensee, including:

(a) An insurance producer;

(b) A third-party administrator;

(d) An actuary;

(e) A reinsurer;

(f) An underwriter; and

(g) An adjuster; and

(3) An individual who maintains a resident license or certificate of qualification in Maryland, including:

(a) An insurance producer;

(b) A managing general agent;

(d) A SHOP exchange navigator;

(e) An individual exchange navigator; and

(f) An application counselor.

B. Consent Required. If an individual to whom this regulation applies has been convicted of a felony involving dishonesty, a felony involving breach of trust, or a violation of the federal Violent Crime Control and Law Enforcement Act of 1994, the individual may not engage in the business of insurance affecting interstate commerce in Maryland unless the individual obtains the written consent of the Insurance Commissioner.

C. Exceptions. Notwithstanding §B of this regulation, an individual is not required to obtain the written consent of the Insurance Commissioner if:

(1) The conviction of the individual has been expunged; or

(2) The individual has been pardoned for the conviction.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.04 Application for Written Consent.

A. In General. An individual who is required to obtain written consent to engage in the business of insurance shall comply with the requirements of this regulation.

B. Application Form.

(1) Except as provided in §B(2) of this regulation, an applicant for written consent shall submit the short application form to the Commissioner.

(2) An applicant for written consent shall submit the comprehensive application form to the Commissioner if:

(a) The applicant intends to act as an insurance producer; or

(b) Following review of the applicant's short application form, the Commissioner:

(i) Determines that the applicant may be a threat to the public; and

(ii) Requests the applicant to submit a comprehensive application form.

(3) An applicant shall attach two recent 2 inch by 2 inch photographs of the applicant to the upper right hand corner of the application form.

(4) The application form shall include a notarized signature of the applicant affirming that the information provided in the application form is truthful and complete.

C. Credit Report. An applicant shall submit to the Commissioner a credit report prepared within 30 days of the date of application and certified by a credit bureau.

D. Request for Criminal Records Check.

(1) An applicant shall apply for a records check for the existence of criminal convictions in the criminal history records information maintained by the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services and received from the Federal Bureau of Investigation by:

(a) Completing and submitting, in a manner approved by the Director of the Central Repository, an application containing identifying information, including the applicant's Social Security number, to verify identity and preserve the security of the record maintained by the Central Repository;

(b) Submitting two complete sets of legible fingerprints taken on forms approved by the Director and the Federal Bureau of Investigation; and

(2) The applicant shall submit a copy of the application for a criminal records check to the Commissioner.

E. Character References.

(1) An application shall be accompanied by at least three letters of reference addressed to the Commissioner, attesting to the character and reputation of the applicant.

(2) An individual who provides a letter of reference may not be related to the applicant by blood or marriage.

(3) A letter of reference shall:

(a) Indicate the length of time and the capacity in which the individual writing the letter has known the applicant;

(b) Describe the applicant's character traits as they relate to the employment, position, or duties for which written consent is sought; and

(c) State that the individual writing the letter is aware that the letter of reference is being provided in connection with a request for written consent to engage in the business of insurance despite the existence of a felony conviction.

F. Additional Information. An applicant may submit any additional documents or information that the applicant would like the Commissioner to consider.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.05 Review of Application.

A. In General. On receipt of an application for written consent and the required accompanying information, the Commissioner shall review the application and information in accordance with this regulation to determine if the applicant should be granted written consent to engage in the business of insurance in the State.

B. Notification of NAIC Members.

(1) On receipt of an application for written consent, the Commissioner shall notify all other members of the NAIC that an application for written consent has been filed, identifying:

(a) The name, address, and Social Security number of the applicant; and

(b) The types of insurance activities to be conducted by the applicant.

(2) The Commissioner shall allow at least 30 days for other members of the NAIC to respond with any relevant information about the applicant.

C. Standard of Review.

(1) The Commissioner shall determine if:

(a) The applicant has been fully rehabilitated and no longer poses a risk or threat to insurance consumers or insurers; and

(b) The issuance of written consent to the applicant is consistent with the public interest, federal and Maryland law, and any applicable court orders.

(2) The Commissioner may grant written consent only if the mitigating circumstances clearly and substantially outweigh the seriousness of the applicant's criminal history together with any other aggravating circumstances.

(3) In reviewing an application for written consent, the factors considered by the Commissioner shall include:

(a) The interest in protecting property and the safety and welfare of consumers, businesses, and the general public;

(b) The nature and severity of the act for which the applicant was convicted;

(d) The injury or loss caused by the act for which the applicant was convicted;

(e) Whether the conviction is related to the business of insurance;

(f) Whether the applicant completed a parole or probation;

(g) Whether the applicant has been charged with, indicted for, or convicted of any other crimes;

(h) Any evidence of the applicant's rehabilitation, including:

(i) Good conduct in prison or in the community;

(ii) Counseling or psychiatric treatment received;

(iii) Acquisition of additional academic or vocational training;

(iv) Successful participation in correctional work-release programs; and

(v) The recommendation of individuals who have had the applicant under their supervision;

(i) The nature and strength of any character references;

(j) The applicant's business and personal record before and after commission of the crime;

(k) Whether and to what extent the applicant has made material false statements in an application, renewal, or other document filed with the Commissioner; and

(l) Whether and to what extent the applicant has made material false statements in applications or other documents filed with other state or federal agencies.

D. Additional Information.

(1) The Commissioner may request any additional documents or information that the Commissioner considers necessary to determine if an applicant should be granted written consent to engage in the business of insurance in Maryland.

(2) If the Commissioner requests additional documents or information, the applicant shall submit the documents or information to the Commissioner within 30 days after receiving the request.

(3) If an applicant fails to submit the requested documents or information to the Commissioner within 30 days, the application of the applicant shall be considered withdrawn.

E. Verification of Duties. The Commissioner may verify with the applicant's employer or prospective employer the duties that the applicant will be performing for the employer.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.06 Grant of Written Consent.

A. In General. If the Commissioner decides to grant the applicant's request for written consent, the Commissioner shall issue a written consent to the applicant.

B. Scope of Written Consent.

(1) The written consent shall be:

(a) Specific as to job duties; and

(b) Conditioned on the individual remaining in a position with substantially similar duties.

(2) If an individual who holds a written consent wishes to engage in additional duties within the business of insurance, the individual shall obtain a new written consent that includes those duties.

(3) If an individual who holds a written consent assumes significantly different job duties without obtaining a new written consent, the written consent of the individual is immediately invalidated.

(4) An individual who holds a written consent and changes employers is not required to obtain a new written consent if the individual's job duties with the new employer are substantially similar to the individual's job duties with the individual's former employer.

C. Truth and Veracity of Information.

(1) A written consent shall be conditioned on the truth and veracity of the documents and information submitted by or on behalf of the applicant.

(2) If the applicant has made materially false or misleading statements or has failed to disclose material information, the written consent is void ab initio.

D. Temporary Written Consent. The Commissioner may grant temporary written consent.

E. Notification of NAIC Members. If the Commissioner grants a request for written consent, the Commissioner shall notify all other members of the NAIC.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.07 Denial of Written Consent.

A. Order. If the Commissioner denies the applicant's request for written consent, the Commissioner shall issue an order that:

(1) States that the request is denied; and

(2) Explains the reasons for the denial.

B. Licensing Prohibited. An applicant who has been denied a written consent may not be granted or continue to hold a license or certificate of qualification to engage in the business of insurance in Maryland.

C. Notification of NAIC Members. If the Commissioner denies an applicant's request for written consent, the Commissioner shall notify all other members of the NAIC.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.08 Hearing.

The Commissioner shall hold a hearing in accordance with Insurance Article, §2-210, Annotated Code of Maryland, on the demand of any applicant who is aggrieved by:

A. The denial of written consent by the Commissioner; or

B. The scope of a written consent issued by the Commissioner.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

COMAR 31.03.12.09 Subsequent Conviction.

A. Written Consent Invalidated Immediately. If an individual who has been granted written consent is subsequently convicted of a felony, the written consent of the individual is invalidated immediately without the necessity of any further action by the Commissioner.

B. Notification. An individual who has been granted written consent and is subsequently convicted of a felony shall:

(1) Immediately notify the Commissioner, the individual's employer, and any insurers with which the individual holds an appointment; and

(2) Provide to the Commissioner all relevant documents and information about the felony conviction.

History

Administrative History: Effective date: June 24, 2002 (29:12 Md. R. 934)
Administrative History: Regulation .02B amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02B amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .03A amended effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .03A amended as an emergency provision effective October 11, 2013 (40:22 Md. R. 1875); amended permanently effective January 6, 2014 (40:26 Md. R. 2166)
Administrative History: Regulation .04D amended effective October 8, 2018 (45:20 Md. R. 920)
Administrative History: Regulation .09A amended effective April 10, 2006 (33:7 Md. R. 675)
Authority: Insurance Article, §2-109(e), Annotated Code of Maryland

31.03.13 Producer Registers and Documentation of Appointments

COMAR 31.03.13.01 Definition.

A. In this chapter, the following term has the meaning indicated.

B. Term Defined. “Producer register” means a register of appointed insurance producers who are authorized to sell, solicit, or negotiate contracts of insurance on behalf of an insurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

COMAR 31.03.13.02 Producer Register.

A. Required. An insurer authorized to transact the business of insurance in the State shall maintain a producer register.

B. Form and Content.

(1) Within 30 days after appointing an insurance producer, an insurer shall add the following information to the insurer's producer register:

(a) The Maryland license number of the insurance producer;

(b) If the insurance producer is an individual, the first and last name and residence or business address of the individual;

(i) The tax ID number of the insurance producer;

(ii) The name of the business entity; and

(iii) The address of the business entity; and

(d) The date that the insurance producer was appointed.

(2) Within 30 days after the effective date of an insurer's termination of an appointment of an insurance producer, the insurer shall add the following information to the insurer's producer register:

(a) The effective date of the termination of the appointment; and

(b) An identifier that indicates if the termination was wholly or partly the result of a belief that the insurance producer engaged or is engaging in any of the activities set forth in Insurance Article, §10-126, Annotated Code of Maryland.

(3) Each item that an insurer is required to include in its producer register under §B(1) and (2) of this regulation shall be entered:

(a) On a separate line or space; or

(b) If the producer register is maintained electronically, in a separate searchable field.

(4) If an insurer maintains its producer register electronically, the insurer shall maintain the producer register in a manner that allows the information in the producer register to be retrieved within 10 working days after a request from the Insurance Commissioner.

Cross References

31.03.13.03B(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

COMAR 31.03.13.03 Updating and Maintaining Producer Register.

A. At least once every 31 days, an insurer shall determine whether the license of any insurance producer who currently is appointed by the insurer has been suspended or revoked.

B. After determining that the license of an insurance producer who currently is appointed by an insurer has been suspended or revoked, the insurer shall:

(1) Within 5 business days after making the determination, terminate the appointment of the insurance producer; and

(2) Within 30 days after the effective date of the termination, update the insurer's producer register to reflect the termination of the appointment in accordance with Regulation .02B(2) of this chapter.

C. An insurer shall maintain its producer register for as long as the insurer acts as an insurer in the State.

D. If an insurer ceases to act as an insurer in the State due to a sale, merger, consolidation, or other transaction:

(1) The insurer shall transfer its producer register to the successor insurer that acquires the business of the insurer; and

(2) The successor insurer shall maintain the producer register for as long as the successor insurer acts as an insurer in the State.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

COMAR 31.03.13.04 Documentation of Appointment.

A. Within 30 days after appointing an insurance producer, an insurer shall provide the insurance producer with written documentation of the appointment that contains, at a minimum:

(1) The name of the insurer;

(2) The date that the documentation was provided to the insurance producer;

(3) The Maryland license number of the insurance producer;

(4) If the insurance producer is an individual, the first and last name of the individual;

(5) If the insurance producer is a business entity, the name of the business entity;

(6) The date that the insurance producer was appointed; and

(7) The following statement, prominently displayed on the written documentation: “This document shall be retained while your appointment is in effect and for at least 5 years after the termination of your appointment.”

B. An insurer may provide the written documentation to an insurance producer electronically if the insurance producer agrees to receive the written documentation electronically.

Cross References

31.03.13.05A(1)

31.03.13.06

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

COMAR 31.03.13.05 Maintenance of Information by Insurance Producer.

A. A licensed insurance producer that has received written documentation of an appointment from an insurer shall maintain:

(1) The documentation of the insurer's appointment that is provided by the insurer under Regulation .04 of this chapter; and

(2) A list of insurers that have appointed the insurance producer.

B. If an insurance producer maintains the information required to be maintained by §A of this regulation electronically, the insurance producer shall maintain the information in a manner that allows the information to be retrieved within 10 working days after a request from the Insurance Commissioner.

C. With respect to a particular appointment, the insurance producer shall maintain the information required to be maintained by §A of this regulation:

(1) While the appointment is in effect; and

(2) For at least 5 years after the termination of the appointment.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

COMAR 31.03.13.06 Producer Action on Behalf of Insurer.

On appointment by an insurer, a licensed producer that has written documentation of the appointment pursuant to Regulation .04 of this chapter may act on behalf of the insurer before the insurer adds the producer to its register.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective January 1, 2004 (31:1 Md. R. 29); adopted permanently effective June 21, 2004 (31:12 Md. R. 915)
Administrative History: Regulation .02B amended effective February 26, 2007 (34:4 Md. R. 403); February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .04A amended effective February 25, 2019 (46:4 Md. R. 191); February 21, 2022 (49:4 Md. R. 302)
Administrative History: Regulation .05A amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .06 adopted effective August 14, 2006 (33:16 Md. R. 1366)
Authority: Insurance Article, §§2-109(a)(1), 10-103(c), and 10-118(j), Annotated Code of Maryland

31.03.14 Notice of Payment Options When Premium Financing is Offered

COMAR 31.03.14.01 Purpose.

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.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland

COMAR 31.03.14.02 Scope.

This chapter does not apply to life insurance, health insurance, or annuities.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland

COMAR 31.03.14.03 Definitions.

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.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland

COMAR 31.03.14.04 Notice of Payment Options.

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.

Cross References

31.03.14.05A

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland

COMAR 31.03.14.05 Retention of Signed Disclosure Forms.

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.

History

Administrative History: Effective date: July 16, 2009 (36:14 Md. R. 985)
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland

31.03.15 Senior or Retiree Designations and Credentials

COMAR 31.03.15.01 Purpose.

The purpose of this chapter is to protect seniors and retirees as purchasers of health insurance, life insurance, and annuity contracts, against the use of sales methods which are misleading.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.02 Scope.

A. This chapter applies to advisors and insurance producers.

B. Under this chapter it is a violation of Insurance Article, Title 27, Annotated Code of Maryland, to use a senior specific designation or certification in a way that misleads or would mislead any person to indicate that the user has special certification or training in advising or serving senior citizens or retirees:

(1) When advising about life insurance, health insurance, or annuities; or

(2) In connection with the offer, sale, or purchase of life insurance, health insurance, or annuities.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Advisor” has the meaning stated in Insurance Article, §10-201, Annotated Code of Maryland.

(2) “Annuity” means annuity as defined in Insurance Article, §1-101, Annotated Code of Maryland.

(3) “Commissioner” means the Maryland Insurance Commissioner.

(4) “Financial services regulatory agency” includes, for the purposes of this chapter, an agency that regulates broker-dealers, investment advisers, or investment companies as defined under the Investment Company Act of 1940.

(5) “Health insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(6) “Life insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(7) “Insurance producer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.04 Prohibited Use of Certification or Professional Designation.

The prohibited use of a certification or professional designation includes the following:

A. Use of certification or professional designation by a person who has not actually earned or is ineligible to use the certification or designation;

B. Use of nonexistent or self-conferred certification or professional designation;

C. Use of certification or professional designation that indicates a level of occupational qualifications obtained through education, training, or experience that the user does not have; and

D. Use of a certification or professional designation that was obtained from a designating or certifying organization that:

(1) Is primarily engaged in the business of instruction in sales, marketing, or sales and marketing;

(2) Does not have reasonable standards or procedures for assuring the competency of its designees or certificate holders;

(3) Does not have reasonable standards or procedures for monitoring and disciplining it designees or certificate holders for improper or unethical conduct; or

(4) Does not have reasonable continuing education requirements for its designees or certificate holders in order to maintain the designation or certification.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.05 Rebuttable Presumption.

A. There is a rebuttable presumption that a designating or certifying organization is not disqualified solely for purposes of this chapter if:

(1) The organization has been accredited by:

(a) The American National Standards Institute or The National Commission for Certifying Agencies; or

(b) The organization is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes” and the issued designation or credential does not primarily apply to sales, marketing, or sales and marketing.

B. The following factors shall be considered when determining whether a combination of words, or an acronym standing for a combination of words constitutes a certification or professional designation indicating or implying that a person has special certification or training in advising or servicing senior citizens or retirees:

(1) Use, in the name of the certification or professional designation, of one or more words such as “senior”, “retirement,” “elder”, or similar terms, combined with one or more words such as “certified”, “registered”, “chartered”, “adviser”, “specialist”, “consultant”, “planner”, or similar terms; and

(2) The manner in which the words described in §B(1) of this regulation are combined.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.06 Exceptions.

For purposes of this chapter, a certification or professional designation does not include a job title within an organization that is licensed or registered by a state or federal financial services regulatory agency, when that job title:

A. Indicates seniority or standing within the organization; or

B. Specifies an individuals’ area of specialization within the organization.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

COMAR 31.03.15.07 Enforcement.

Nothing in this chapter shall limit the Commissioner’s authority to enforce existing provisions of law.

History

Administrative History: Effective date: April 4, 2011 (38:7 Md. R. 433)
Authority: Insurance Article, §§2-109(a)(1), 10-212, 27-201, and 27-223, Annotated Code of Maryland

31.03.16 SHOP Exchange Navigators — Licensing

COMAR 31.03.16.01 Purpose.

The purpose of this chapter is to establish certain requirements that must be satisfied in order to qualify for a SHOP Exchange navigator license.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.02 Applicability.

This chapter applies to any person seeking to act as a SHOP Exchange navigator.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.03 Definitions.

A. In this chapter, the following terms have the meaning indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Applicant” means a person who is applying for a SHOP Exchange navigator license.

(3) “Application” means a written request for a license in a form approved by the Commissioner.

(4) “Commissioner” means the Maryland Insurance Commissioner.

(5) “Effective Date” means the date on which a license takes effect.

(6) “Examination” means the written pre-licensing examination given under the authority of the Commissioner pursuant to Insurance Article, §31-112(d), Annotated Code of Maryland.

(7) “License” means a SHOP Exchange navigator license.

(8) “Licensee” means a SHOP Exchange navigator.

(9) “Maryland Health Benefit Exchange” means the public corporation established under Insurance Article, §31-102, Annotated Code of Maryland.

(10) “SHOP Exchange” has the meaning set forth in Insurance Article, §31-101(w), Annotated Code of Maryland.

(11) “SHOP Exchange navigator” has the meaning set forth in Insurance Article, §31-101(x), Annotated Code of Maryland.

(12) “SHOP Exchange navigator license” has the meaning set forth in Insurance Article, §31-101(y), Annotated Code of Maryland.

(13) “Training Program” means the educational program offered to an applicant by the SHOP Exchange that must be completed subject to Insurance Article, §31-112(c)(2)(v), Annotated Code of Maryland.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.04 Licensing Requirements.

A. Before a person may act as a SHOP Exchange navigator in the State, the person shall obtain a license issued by the Commissioner.

B. To qualify for a license, an applicant:

(1) Shall be at least 18 years of age;

(2) Shall successfully complete the training program;

(3) Shall complete and pass both sections of the examination;

(4) Shall submit an application and any additional information the Commissioner deems necessary to the Administration;

(5) Shall pay to the Administration initial license and application fees if permitted by law;

(6) Shall be of good character and trustworthy; and

(7) May not have committed any act the Commissioner finds would warrant suspension or revocation of a license under Insurance Article, §31-112(e), Annotated Code of Maryland.

Cross References

31.03.16.09B

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.05 Examination.

A. To qualify to take the examination, an applicant must submit evidence of successful completion of the training program.

B. The examination shall be:

(1) Divided into a State-specific section and a general section;

(2) Based on a content outline that is approved by the Commissioner in consultation with the Maryland Health Benefit Exchange;

(3) Reviewed by the Commissioner on a periodic basis, in consultation with the Maryland Health Benefit Exchange, to ensure that it accurately measures an applicant’s competency in the required areas of knowledge;

(4) In writing, but may be administered electronically to an applicant;

(5) Conducted in specified locations throughout the State which have been approved by the Commissioner;

(6) Conducted in facilities that comply with the Americans with Disabilities Act of 1990 as amended by 42 U.S.C. §12101, et seq.; and

(7) Administered quarterly, or more frequently if deemed appropriate by the Commissioner.

C. Each section of the examination shall be scored separately.

D. The Commissioner shall establish a minimum passing score, in consultation with the Maryland Health Benefit Exchange, for each section of the examination.

E. An applicant who fails a single section of the examination may retake the failed section of the examination within 1 year of the initial examination date. If the applicant does not pass the failed section within that time, the applicant must retake both sections of the examination to be eligible to pass the examination. The examination may be taken no more than three times in a 6-week period.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.06 Changes to Information in the Application.

A. Within 30 days after a change to any information in an initial or renewal application, a licensee shall file with the Commissioner, in a form required by the Commissioner, the change in information.

B. If a licensee fails to timely file with the Commissioner a change to the information specified in §A of this regulation, the licensee is in violation of Insurance Article, §31-112(e)(1)(i), Annotated Code of Maryland.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.07 License Term.

A. An initial license expires on the last day of the licensee’s birth month following the second anniversary of the effective date of the initial license.

B. A renewal license expires on the second anniversary of its effective date.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.08 License Renewal.

A. To qualify to renew a license, a licensee:

(1) Shall submit to the Commissioner a renewal application approved by the Commissioner;

(2) Shall pay a license renewal fee if permitted by law;

(3) Shall submit to the Commissioner any additional information the Commissioner deems necessary;

(4) Shall complete the continuing education requirements as set forth in §A(7) of this regulation;

(5) Shall be of good character and trustworthy;

(6) May not have committed any act the Commissioner finds would warrant suspension or revocation of a license under Insurance Article, §31-112(e), Annotated Code of Maryland;

(7) Shall complete 16 credit hours of continuing education during the prior license period as approved by the Administration in consultation with the Maryland Health Benefit Exchange. The credit hours shall include the following:

(a) A minimum of 9 credit hours in health insurance; and

(b) A minimum of 3 credit hours in ethics;

(8) Shall have paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller of Maryland and the Secretary of Labor or have provided for payment in a manner satisfactory to the unit responsible for collection; and

(9) Shall have paid any amount in arrears on an applicant’s child support obligation, if any, or have provided for payment in a manner satisfactory to the unit responsible for collection.

B. A renewal application is considered timely filed if:

(1) The application contains all of the required information;

(2) The renewal license fee, if permitted by law, has been received by the Administration; and

(3) The application is:

(a) Mailed and postmarked on or before the expiration date of the license; or

(b) Submitted electronically and received by an information processing system that the Administration has designated for the purpose of receiving electronic applications prior to the expiration date of the license.

C. If, at least 2 calendar weeks before a license expires, the licensee makes sufficient application for renewal of the license, the license shall not expire until:

(1) The Administration takes final action on the renewal application; and

(2) The time for seeking judicial review of the action expires or any judicial stay of the Administration’s final action expires.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

COMAR 31.03.16.09 Expired License Reinstatement.

A. An individual whose license has expired:

(1) Is prohibited from acting as a SHOP Exchange navigator in the State; and

(2) For up to 1 year after the expiration date of the license, may obtain reinstatement of the expired license by:

(a) Submitting to the Commissioner a reinstatement application approved by the Commissioner;

(b) Meeting all of the renewal requirements under Regulation .08(A) and (B) of this chapter; and

B. An individual who does not qualify for reinstatement under §A(2) of this regulation may apply for an initial license as described in Regulation .04 of this chapter.

C. The Commissioner may waive the reinstatement procedures for a SHOP Exchange navigator who is unable to comply with the renewal and reinstatement procedures due to:

(1) Military service; or

(2) Other extenuating circumstances, including a long-term medical disability.

History

Administrative History: Effective date: March 4, 2013 (40:4 Md. R. 348)
Authority: Insurance Article, §§2-109 and 31-112, Annotated Code of Maryland

31.03.17 Consolidated Services Center — SHOP Exchange Enrollment Permits

COMAR 31.03.17.01 Purpose.

The purpose of this chapter is to establish certain requirements that shall be satisfied in order to qualify for a SHOP Exchange enrollment permit.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.02 Applicability.

This chapter applies to any employee of the Consolidated Services Center seeking to provide the services set forth in Insurance Article, §31-112(c)(1), Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.03 Definitions.

A. In this chapter, the following terms have the meaning indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Applicant” means a person who is applying for a SHOP Exchange enrollment permit.

(3) “Application” means a written request for a permit in a form approved by the Commissioner.

(4) “Commissioner” means the Maryland Insurance Commissioner.

(5) “Consolidated Services Center” has the meaning set forth in Insurance Article, §31-101(c-2), Annotated Code of Maryland.

(6) “Effective date” means the date on which a permit takes effect.

(7) “Examination” means the examination given under the authority of the Commissioner pursuant to Insurance Article, §31-112(d), Annotated Code of Maryland.

(8) “Maryland Health Benefit Exchange” means the public corporation established under Insurance Article, §31-102, Annotated Code of Maryland.

(9) “Permit” means a SHOP Exchange enrollment permit.

(10) “SHOP Exchange” has the meaning set forth in Insurance Article, §31-101(w), Annotated Code of Maryland.

(11) “SHOP Exchange Enrollment Permit” means a permit issued by the Commissioner to Consolidated Services Center employees, as required under Insurance Article, §31-113.1(b)(3), Annotated Code of Maryland.

(12) “SHOP Exchange Navigator License” has the meaning set forth in Insurance Article, §31-101(y), Annotated Code of Maryland.

(13) “Training program” means the educational program offered to an applicant by the SHOP Exchange that must be completed subject to Insurance Article, §31-112(2)(v), Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.04 Permit Requirements.

A. Before an employee of the Consolidated Services Center may provide the services set forth in Insurance Article, §31-112(c)(1), Annotated Code of Maryland, the person shall obtain a permit issued by the Commissioner.

B. To qualify for a permit, an applicant shall:

(1) Be at least 18 years of age;

(2) Successfully complete the training program;

(3) Complete and pass both sections of the examination;

(4) Submit an application and any additional information the Commissioner deems necessary to the Administration;

(5) Pay to the Administration initial permit and application fees if permitted by law;

(6) Be of good character and trustworthy;

(7) Not have committed any act the Commissioner finds would warrant suspension or revocation of a permit under Insurance Article, §31-113.1(b)(4), Annotated Code of Maryland; and

(8) Be engaged by the Consolidated Services Center and receive compensation only through the Consolidated Services Center.

Cross References

31.03.17.09B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.05 Examination.

A. For an applicant to qualify to take the examination, the Maryland Health Benefit Exchange, or its designee, must submit evidence of the applicant’s successful completion of the training program to the Commissioner.

B. The examination shall be the same examination administered by the Commissioner to those individuals seeking a SHOP Exchange Navigator License.

C. An applicant who fails a single section of the examination may retake the failed section of the examination within 1 year of the initial examination date. If the applicant does not pass the failed section within that time, the applicant shall retake both sections of the examination to be eligible to pass the examination. The examination may not be taken more than three times in a 6-week period.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.06 Changes to Information in the Application.

A. Within 30 days after a change to any information in an initial or renewal application, a permit holder shall file with the Commissioner, in a form required by the Commissioner, the change in information.

B. If a permit holder fails to timely file with the Commissioner a change to the information specified in §A of this regulation, the permit holder is in violation of Insurance Article, §31-112(e)(1)(i), Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.07 Permit Term.

A. An initial permit expires on the last day of the permit holder’s birth month following the second anniversary of the effective date of the initial permit.

B. A renewal permit expires on the second anniversary of its effective date.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.08 Permit Renewal.

A. To qualify to renew a permit, a permit holder shall:

(1) Submit to the Commissioner a renewal application approved by the Commissioner;

(2) Pay a permit renewal fee if permitted by law;

(3) Submit to the Commissioner any additional information the Commissioner deems necessary;

(4) Complete the continuing education requirements as set forth in §A(7) of this regulation;

(5) Be of good character and trustworthy;

(6) Not have committed any act the Commissioner finds would warrant suspension or revocation of a SHOP Exchange enrollment permit under Insurance Article, §31-113.1(b)(4), Annotated Code of Maryland;

(7) Complete 16 credit hours of continuing education during the prior permit period as approved by the Administration in consultation with the Maryland Health Benefit Exchange which shall include the following:

(a) A minimum of nine credit hours in health insurance; and

(b) A minimum of three credit hours in ethics;

(8) Have paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller of Maryland and the Secretary of Labor or has provided for payment in a manner satisfactory to the unit responsible for collection;

(9) Have paid any amount in arrears on an applicant’s child support obligation, if any, or has provided for payment in a manner satisfactory to the unit responsible for collection; and

(10) Be engaged by the Consolidated Services Center and receive compensation only through the Consolidated Services Center.

B. A renewal application is considered timely filed if:

(1) The application contains all of the required information;

(2) The renewal permit fee, if permitted by law, has been received by the Administration; and

(3) The application is:

(a) Mailed and postmarked on or before the expiration date of the permit; or

C. If, at least 2 calendar weeks before a permit expires, the permit holder makes sufficient application for renewal of the permit, the permit shall not expire until:

(1) The Administration takes final action on the renewal application; and

(2) The time for seeking judicial review of the action expires or any judicial stay of the Administration’s final action expires.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

COMAR 31.03.17.09 Expired Permit Reinstatement.

A. An individual whose permit has expired:

(1) Is prohibited from providing the services set forth in the Insurance Article, §31-112(c)(1), Annotated Code of Maryland; and

(2) For up to 1 year after the expiration date of the permit, may obtain reinstatement of the expired permit by:

(a) Submitting to the Commissioner a reinstatement application approved by the Commissioner;

(b) Meeting all of the renewal requirements under Regulation .08A—B(1), (2) and (3)(b) of this chapter; and

B. An individual who does not qualify for reinstatement under §A(2) of this regulation may apply for an initial permit as described in Regulation .04 of this chapter.

C. The Commissioner may waive the reinstatement procedures for a Consolidated Services Center employee who is unable to comply with the renewal and reinstatement procedures due to:

(1) Military service; or

(2) Other extenuating circumstances, including a long-term medical disability.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09 adopted as an emergency provision effective September 19, 2013 (40:21 Md. R. 1772); adopted permanently effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109 and 31-113.1, Annotated Code of Maryland

31.03.18 Public Adjusters

COMAR 31.03.18.01 Scope.

This chapter does not apply to:

A. An adjuster for or an insurance producer or employee of an insurer or group of insurers under common control or ownership that, as representative of the insurer or group, adjusts losses or damages under policies issued by the insurer or group;

B. An insurance producer that acts as an adjuster without compensation for an insured for whom the insurance producer is acting as an insurance producer; or

C. An attorney at law who does not:

(1) Regularly act as a public adjuster; and

(2) Represent to the public by sign, advertisement, or otherwise that the attorney at law acts as a public adjuster.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.02 Definitions.

A. In this chapter the following words have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Business entity” has the meaning stated in Insurance Article, §10-101(c), Annotated Code of Maryland.

(3) “Course” means a presentation of information delivered in person, in print, electronically, or via teleconference, which is measured by verifiable attendance or examination, or both.

(4) “Course completion date” means the date when a student has submitted all necessary information to the education provider and, when applicable, successfully met the course attendance requirements or passed the final examination, or both.

(5) “Course completion roster” means a listing of candidates who have completed a continuing education course, provided in a format determined by the Commissioner, which includes the following:

(a) The course name, the designated course number, and the course completion date;

(b) The provider’s identification number;

(d) For each student who completes the course:

(i) The student’s name;

(ii) The student’s national producer number or the student’s license number, or both; and

(iii) The number of hours of continuing education earned by the student.

(6) “Course coordinator” means an individual who is responsible for organizing a continuing education course, getting it approved by the Insurance Commissioner, and supervising the administration of the course after its approval.

(7) “Expiration date” means the date the license expires as stated on the license.

(8) “Hours of continuing education” means 50 minutes of work in a course that has been approved by the Commissioner to receive continuing education credit.

(9) “Instructor” means a subject matter expert, approved by the Commissioner, presenting course activities or information in a course approved by the Commissioner.

(10) “License” means a license issued by the Commissioner to act as a public adjuster.

(11) “Licensed insurance producer” has the meaning stated in Insurance Article, §1-101(w), Annotated Code of Maryland.

(12) “Provider” means an entity that has been approved by the Commissioner to offer continuing education courses to licensed insurance producers in the State.

(13) “Public adjuster” has the meaning stated in Insurance Article, §10-401(d), Annotated Code of Maryland.

(14) “Renewal period” means the period from the issuance or renewal of a license until the day before the expiration date of the license.

(15) “Renewal year” means the 12-month period from January 1 until December 31 in which a license renewal occurs.

(16) “Self-study course” means a course that is not presented in a classroom, is not delivered in person, and does not require interaction with an instructor.

(17) “Successfully complete” means to complete and meet all requirements of an approved course for which a valid certificate of course completion has been issued.

(18) “Teleconference” means the live exchange of information among several persons who are separately located but linked by audio or video, or both, that provides for opportunities for interactions between student and instructor.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.03 General Continuing Education Requirements.

A. Except as provided in §§B and C of this regulation, in order to renew a license, a licensed public adjuster who is not a business entity shall successfully complete in each renewal period at least 24 hours of continuing education as follows:

(1) At least 3 hours in Ethics; and

(2) 21 hours shall be in courses designated by the Commissioner as “Public Adjuster” or “Property/Casualty”.

B. If the licensed public adjuster is also a licensed insurance producer and has only a producer license for property insurance, casualty insurance, or a subdivision of property or casualty insurance, the licensee shall obtain necessary hours in courses designated by the Commissioner as “Public Adjuster” or “Property/Casualty”.

C. If the licensed public adjuster is also a licensed insurance producer and has a producer license for property insurance or casualty insurance, or a subdivision of property or casualty insurance, and life insurance or health insurance, or a subdivision of life or health insurance, then the licensee shall complete:

(1) A minimum of 6 hours in one or more courses designated Public Adjuster;

(2) A minimum of 6 hours in one or more courses designated Property/Casualty;

(3) A minimum of 6 hours in one or more courses designated Life/Health; and

(4) Three additional hours of continuing education in any course or courses designated for areas specified in §C(1)—(3) of this regulation.

D. Course of Continuing Education—Passing Scores. Passing scores received on or after the expiration date for the public adjuster’s license shall result in hours of continuing education that may be used for the next renewal period.

E. A course instructor shall earn 1-1/2 hours of continuing education for each approved hour of instruction of an approved course.

F. A public adjuster or a course instructor may not earn hours of continuing education for attending or instructing a subsequent offering of the same course in the same renewal period.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.04 Holders of Expired Licenses Who Seek Reinstatement.

A. The holder of an expired license who seeks reinstatement of the license under Insurance Article, §10-408.1, Annotated Code of Maryland, shall fulfill the continuing education requirements for the renewal period that concluded on the day before the immediately preceding expiration date of the licensed public adjuster’s license in order to qualify for reinstatement.

B. A licensed public adjuster who does not have sufficient hours of continuing education on the day before the most recent expiration date of the license will have all hours of continuing education earned on or after the expiration date credited toward the requirement for the renewal period that concluded on the day before the license expired.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.05 Nonresident Licensed Public Adjusters.

A. A nonresident licensed public adjuster whose state or residence has a continuing education requirement shall fulfill all of the requirements of the state of residence, and the continuing education requirements of Maryland may not be applicable to the licensed public adjuster.

B. A nonresident licensed public adjuster whose state of residence does not have a continuing education requirement shall fulfill Maryland continuing education requirements, which may be fulfilled entirely through correspondence courses.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.06 Licensed Public Adjuster Responsibilities.

A. A licensed public adjuster shall:

(1) Maintain a record of the certificate of course completion received for 4 years following the date that the course was completed; and

(2) Upon request, submit with the renewal application each certification of course completion needed to fulfill the licensed public adjuster’s hours of continuing education for the renewal period.

B. Under Insurance Article, §10-410, Annotated Code of Maryland, the Commissioner may suspend or revoke a license if a licensed public adjuster is found to have knowingly:

(1) Falsified a certification of course completion; or

(2) Submitted a falsified certification of course completion.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.07 Approval of Courses.

B. The Commissioner may not approve a course covering any of the following subject areas:

(1) A course in office or business skills, including typing, speed reading, or the use of computers, calculators, or other machines or equipment;

(2) A course in office management, client relations, or other matters aimed at improving the operating of the person’s business; or

(3) A course in salesmanship or product promotion, stress management, time management, psychology, motivation, or written or oral communications.

C. Except for a self-study course, a course submitted to the Commissioner for approval does not need to require a textbook or an examination in order to receive approval.

D. The Commissioner shall assign to each approved course:

(1) The number of hours of continuing education that an individual taking the course may receive for successful completion of the course;

(3) A designation of “Public Adjuster”, “Property/Casualty” or “Ethics”; and

(4) A course expiration date.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.08 Submission of Courses for Approval.

A. A provider shall submit to the Commissioner:

(1) A fully completed course approval package consisting of the following forms provided by the Commissioner:

(a) Request for approval of continuing education course;

(b) Course coordinator information;

(d) Certificate of course completion; and

(e) Checklist of items that must accompany the course approval package;

(2) A statement of the educational objectives;

(3) A full and detailed description of the course content including the amount of time allotted to each subject covered by the course on an hour-by-hour basis;

(4) All course materials, including textbooks, written materials in place of textbooks, course syllabus, policy forms, and any other items used by the instructor;

(5) Promotional materials; and

(6) A statement of the refund policy, which shall include:

(a) Full refund of course fees due to cancellation by the sponsor; and

(b) The refund policy when the licensed insurance producer:

(i) Withdraws from the course before commencement; and

(ii) Fails to complete the course after it has commenced.

B. The provider shall submit a course approval package to the Commissioner as follows:

D. A provider may offer only a course approved by the Commissioner.

Cross References

31.03.18.09B

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.09 Submission of Courses for Renewal.

A. At least 90 days prior to the expiration of a course’s approval, the Commissioner shall mail to the provider of the approved course a notice that states:

(1) The course name, the course content code, the course number, and the date on which the course approval expires;

(2) The date by which the Commissioner must receive the request to renew; and

(3) The fee charged for reviewing continuing education courses submitted for renewal.

B. In order to renew a course, a provider shall comply with the provisions of Regulation .08 of this chapter.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.10 Providers.

A. A provider shall:

(1) Comply with this chapter for each of the provider’s approved courses;

(2) Use in all communication with the Commissioner or the Commissioner’s designee the provider identification number assigned by the Commissioner;

(3) Use a course coordinator who meets the qualifications specified in Regulation .11 of this chapter;

(4) Use an approved instructor; and

(5) Notify the Commissioner of the replacement of a course coordinator.

B. A provider who is an insurer authorized to do business in Maryland may not require an appointed insurance producer to obtain hours of continuing education by attending an approved course that the insurer is providing.

C. Within 15 days of the completion of a course, the provider shall submit a course completion roster to the Commissioner or the Commissioner’s designee in an electronic format specified by the Commissioner.

Cross References

31.03.18.15B(5)

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.11 Course Coordinators.

A. The provider shall ensure that each approved continuing education course has at least one course coordinator who is responsible for:

(1) Supervising the administration of the course; and

(2) Compliance with this chapter.

B. A course coordinator shall possess one or more of the following qualifications:

(1) A minimum of 5 years experience as an actively licensed public adjuster;

(2) A minimum of 3 years experience as an administrator of an education program;

(3) A degree in education and at least 2 years experience as a licensed public adjuster; or

(4) Full-time employment in the insurance education field as a coordinator with at least 6 months experience.

C. A course coordinator shall:

(1) Assure compliance with this chapter;

(2) Notify the Commissioner of:

(a) Any change in the instructor for an approved course;

(b) The date, time, and location of a course offering and the name of the instructor not less than 14 calendar days in advance of the date that the course offering is scheduled to begin; and

(3) Assure that students are provided with current and accurate information;

(4) Create an accurate record of student attendance and successful course completion for each offering of an approved course;

(5) Supervise and evaluate courses and instructors;

(6) Investigate complaints relating to course offerings and instructors;

(7) Maintain accurate records relating to course offerings, instructors, student attendance, and student course completion for a minimum of 4 years following the date of the course offering; and

(8) Within 15 days of the student’s completion of the course, provide each student with a certificate of course completion on a form approved by the Commissioner.

Cross References

31.03.18.10A(3)

31.03.18.15B(4)

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.12 Instructors.

B. The provider shall submit to the Commissioner a course instructor information and approval form for each instructor of an approved course.

C. An instructor shall possess one or more of the following qualifications:

(1) A minimum of 2 years experience in the subject matter being taught;

(2) A degree in the subject matter being taught; or

(3) A minimum of 2 years recent experiences as a licensed public adjuster and a minimum of 6 months practical experience in the subject matter being taught.

D. The Commissioner may not approve as an instructor a licensed public adjuster:

(1) Who has been fined; or

(2) Whose license has been suspended or revoked.

E. An instructor shall:

(1) Comply with the requirements of this chapter; and

(2) Provide students with:

(a) Current and accurate information on the subject matter of the course; and

(b) A course syllabus that shall contain at least the following information:

(i) Course title and designated course number assigned by the Commissioner;

(ii) Times and dates of the course offering;

(iii) Names, addresses, and telephone numbers of each course coordinator; and

(iv) Detailed outline of the subject matter of the course.

F. The Commissioner may revoke the approval of any course that is not taught by an approved instructor.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.13 Advertising of Approved Courses.

A. Except as provided in §D of this regulation, a provider may not advertise or distribute promotional materials unless the course has been approved by the Commissioner.

D. A provider may request, in writing, permission to advertise a course before approval is obtained from the Commissioner by submitting:

(1) A letter specifically requesting permission to advertise the course before approval is obtained; and

E. The Commissioner shall issue the provider a written response either granting or denying the provider’s request for course approval. The provider may not advertise the course until the Commissioner has granted the request.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.14 Prohibited Practices.

The following practices by a provider, course coordinator, or instructor are prohibited:

A. Offering or teaching a course that is not approved or that is not in substantial conformity with the course completion package submitted to and approved by the Commissioner;

B. Promoting a particular public adjuster, insurance agency or insurance company or products of the agency or company; and

C. Requiring, as a condition of receiving a certificate of course completion, that students participate in other programs or services offered by the provider, course coordinator, or instructor.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.15 Powers of the Commissioner.

A. The Commissioner, or the Commissioner’s designee, may audit all course offerings with or without notice to the provider, course coordinator, or instructor of the course.

B. The Commissioner may suspend or revoke the approval of a course for any of the following violations of this chapter:

(1) Failure of the instructor to follow the approved course content;

(2) Failure to use a course coordinator meeting the qualifications specified in this chapter;

(3) Failure to use an approved instructor;

(4) Failure to notify the Commissioner of the date, time, location, and instructor of a course offering in accordance with Regulation .11C(2)(b) of this chapter; or

(5) Failure to submit a course completion roster in accordance with Regulation .10C of this chapter.

D. The Commissioner may suspend or revoke the approval of any instructor, course coordinator, or course provider who fails to comply with this chapter.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.16 Waiver of the Continuing Education Requirement.

A. Subject to §B of this regulation, the continuing education requirements may be waived for a licensed insurance producer who:

(1) Submits a written request for a waiver; and

(2) Is determined by the Commissioner, in the Commissioner’s discretion, to warrant a waiver.

B. A waiver request shall be accompanied by supporting documentation.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

COMAR 31.03.18.17 Protections after Loss or Damage to Property.

A. The term “business day”, as it is used in Insurance Article, §§10–411(h) and 10-414(f), Annotated Code of Maryland means any day other than a Saturday, Sunday, or State holiday.

B. In enforcing Insurance Article, §10-414(f), Annotated Code of Maryland, the Commissioner shall determine the date of a loss giving rise to an insurance claim as follows:

(1) If the insurance claim resulted from a hurricane, then the date of loss giving rise to the insurance claim is the date that the hurricane made landfall in the State of Maryland;

(2) If the insurance claim resulted from a tornado, windstorm, severe rain, or other weather-related event that is not a hurricane, then the date of loss giving rise to the insurance claim is the date that the tornado, windstorm, severe rain, or other weather-related event is verified to have occurred in Maryland by the National Oceanic and Atmospheric Administration; or

(3) If the insurance claim is not within the scope of §B(1) or (2) of this regulation, then the date of loss giving rise to the insurance claim is the date that the loss was discovered.

C. To comply with §10-414(f), a public adjuster who enters into a contract for public adjuster services during or within 72 hours after a loss giving rise to an insurance claim shall electronically submit the Public Adjuster Contract Submission Form that is published to the Administration’s website, together with any attachments required therein, within one business day after entering into the contract.

History

Administrative History: Effective date: April 1, 2017 (44:6 Md. R. 328)
Administrative History: Regulation .02B amended effective July 30, 2018 (45:15 Md. R. 728); January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulation .03D—F adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: New Regulations .04—.16 adopted effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .17 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§2-109, 2-209 and 10-408, Annotated Code of Maryland

31.03.19 Managing General Agents

COMAR 31.03.19.01 Bond and Errors and Omissions Coverage Requirement.

A. A managing general agent shall obtain and maintain:

(1) A fidelity bond for the protection of the insurer and policyholder equal to or greater than 10 percent of the maximum annual premium volume as stated in the underwriting guidelines in the contract required by Insurance Article, §8-209, Annotated Code of Maryland, but no less than $100,000; and

(2) An errors and omissions policy for the protection of the insurer and policyholder with limits of at least $1,000,000.

B. A managing general agent shall provide evidence of bond and errors and omissions coverage on the initial or renewal application.

History

Administrative History: Effective date: December 14, 2020 (47:25 Md. R. 1067)
Authority: Insurance Article, §§8-201(c), 8-207 and 8-209, Annotated Code of Maryland

31.03.20 License Application Procedures

COMAR 31.03.20.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Applicant” means a person who submits an application to obtain a license.

(2) “Examination” means an examination to obtain a license, as required by Insurance Article, §§10-108, 10-109, 10-204, or 10-404, Annotated Code of Maryland or Insurance Article.

(3) “License” has the meaning in Insurance Article, §§10-101(e), 10-201(c), or 10-401(e), Annotated Code of Maryland.

History

Administrative History: Effective date: June 22, 2026 (53:12 Md. R. 531)
Authority: Insurance Article, §§10-101, 10-102, 10-103, 10-104, 10-105, 10-107, 10-111, 10-112, 10-201, 10-202, 10-203, 10-204, 10-205, 10-207, 10-305, 10-401, 10-402, 10-403, 10-404, 10-405, 10-406, 10-407, 10-410, Annotated Code of Maryland

COMAR 31.03.20.02 Valid License Exam Scores.

A. License applicants shall pass any required examinations given by the Commissioner prior to the submission of a license application.

B. Passing examination scores and results are valid for 1 year from the date the examination is passed.

C. If required examination scores are older than 1 year at the time of application submission, the application may be rejected.

History

Administrative History: Effective date: June 22, 2026 (53:12 Md. R. 531)
Authority: Insurance Article, §§10-101, 10-102, 10-103, 10-104, 10-105, 10-107, 10-111, 10-112, 10-201, 10-202, 10-203, 10-204, 10-205, 10-207, 10-305, 10-401, 10-402, 10-403, 10-404, 10-405, 10-406, 10-407, 10-410, Annotated Code of Maryland

COMAR 31.03.20.03 Timeliness for Response to Application Information Request.

A. The Commissioner may request additional documentation from the applicant pertaining to their license application.

B. The applicant shall respond within the time frame requested by the Commissioner in the request for information.

C. Failure to respond to the request within the requested time frame may lead to:

(1) The denial of the application; or

(2) The Commissioner may deem the application withdrawn by the applicant.

D. If no date is specified in the request for information from the Commissioner, and the applicant does not respond within 6 months of the date of the Commissioner’s request, the application may be deemed withdrawn.

History

Administrative History: Effective date: June 22, 2026 (53:12 Md. R. 531)
Authority: Insurance Article, §§10-101, 10-102, 10-103, 10-104, 10-105, 10-107, 10-111, 10-112, 10-201, 10-202, 10-203, 10-204, 10-205, 10-207, 10-305, 10-401, 10-402, 10-403, 10-404, 10-405, 10-406, 10-407, 10-410, Annotated Code of Maryland

31.04 INSURERS

31.04.01 Examination of Insurers

COMAR 31.04.01.01 Applicability.

A. Regulation .02 of this chapter is applicable to a person who acts as an insurer in this State, including dental plan organizations, fraternal benefit societies, health maintenance organizations, and nonprofit health service plans.

B. Regulations .03 and .04 of this chapter are applicable to a person who acts as an insurer in this State, including dental plan organizations, fraternal benefit societies, health maintenance organizations, nonprofit health service plans, and accredited reinsurers.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.58 to COMAR 31.04.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03A amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Health-General Article, §§19-717 and 19-718; Insurance Article, §§2-109, 2-205, 2-207, 2-208, 2-209, 3-303, 3-318, 3-319, 4-116, 5-201, 5-903, 5-904, 8-461, 8-462, 13-116, 14-125, and 14-411; Annotated Code of Maryland

COMAR 31.04.01.02 Examination of Foreign Authorized Insurers and Alien Authorized Insurers.

A. In this regulation, “accreditated state” means a state in which its insurance regulatory agency meets the accreditation requirements of the National Association of Insurance Commissioners in accordance with its Financial Regulation Standards and Accreditation Program.

B. Except as provided in §C of this regulation, the Commissioner shall examine each foreign authorized insurer or alien authorized insurer whenever the Commissioner considers advisable and at least once every 5 years.

C. Exception.

(1) Instead of conducting an examination of the foreign authorized insurer or the alien authorized insurer, the Commissioner may accept a full report of the last examination made of the insurer and certified by the insurance supervisory official of the state of domicile of a foreign authorized insurer or the state of entry of an alien authorized insurer.

(2) On and after January 1, 1994, the Commissioner may accept the report of examination only from an accreditated state whose insurance regulatory agency conducted the examination.

(3) If the report of examination is from an insurance regulatory agency of a nonaccreditated state, the Commissioner may accept the report only if the examination:

(a) Is performed under the supervision of an insurance regulatory agency of an accreditated state; or

(b) Is performed with the participation of one or more examiners who:

(i) Are employed by the insurance regulatory agency of an accreditated state, and

(ii) After a review of the work papers and report of the examination, state under oath that the examination is performed in accordance with the standards and procedures required by the accreditated state of the examiner.

Cross References

31.04.01.01A

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.58 to COMAR 31.04.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03A amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Health-General Article, §§19-717 and 19-718; Insurance Article, §§2-109, 2-205, 2-207, 2-208, 2-209, 3-303, 3-318, 3-319, 4-116, 5-201, 5-903, 5-904, 8-461, 8-462, 13-116, 14-125, and 14-411; Annotated Code of Maryland

COMAR 31.04.01.03 Conduct of Examination; Filing of Examination Report.

A. This regulation applies to:

(1) A person subject to examination under Insurance Article, §2-205, Annotated Code of Maryland;

(2) A nonprofit health service plan subject to examination under Insurance Article, §14-125, Annotated Code of Maryland;

(3) A fraternal benefit society subject to examination under Insurance Article, §8-461 or 8-462, Annotated Code of Maryland;

(4) A fronting reinsurer subject to examination under Insurance Article, §13-116, Annotated Code of Maryland;

(5) An accredited reinsurer subject to examinationunder Insurance Article, Title 5, Subtitle 9, Annotated Code of Maryland;

(6) A dental plan organization subject to examination under Insurance Article, §14-411, Annotated Code of Maryland; or

(7) A health maintenance organization subject to examination under Insurance Article, §2-205(b)(1)(v), Annotated Code of Maryland.

B. The Commissioner, or an examiner designated by the Commissioner, shall conduct an examination authorized under Insurance Article, Annotated Code of Maryland, or Health-General Article, Annotated Code of Maryland, in accordance with the Examiners' Handbook adopted by the National Association of Insurance Commissioners and any other guidelines or procedures considered necessary by the Commissioner.

C. Time Period for Completion and Filing Report.

(1) Within 60 days after the completion of an examination conducted under Insurance Article, Annotated Code of Maryland, or Health-General Article, Annotated Code of Maryland, each examiner in charge of the examination shall prepare for filing with the Commissioner a verified written report of the examination.

(2) At least 30 days before filing the report in the office of the Commissioner, the Commissioner shall give a copy of the report to the person that was examined.

(3) If the person requests a hearing, in writing, within the 30-day period, the Commissioner shall grant a hearing on the report.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.58 to COMAR 31.04.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03A amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Health-General Article, §§19-717 and 19-718; Insurance Article, §§2-109, 2-205, 2-207, 2-208, 2-209, 3-303, 3-318, 3-319, 4-116, 5-201, 5-903, 5-904, 8-461, 8-462, 13-116, 14-125, and 14-411; Annotated Code of Maryland

COMAR 31.04.01.04 Accounting Practices and Procedures.

A person who is required under Insurance Article, Annotated Code of Maryland, or Health-General Article, Annotated Code of Maryland, to file an annual financial statement, interim financial statement, audited financial report, or annual actuarial opinion shall prepare the documents in accordance with the Annual Statement Instructions and the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners.

Cross References

31.05.10.02B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.58 to COMAR 31.04.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03A amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Health-General Article, §§19-717 and 19-718; Insurance Article, §§2-109, 2-205, 2-207, 2-208, 2-209, 3-303, 3-318, 3-319, 4-116, 5-201, 5-903, 5-904, 8-461, 8-462, 13-116, 14-125, and 14-411; Annotated Code of Maryland

31.04.02 Examination of Principal Management or Controllers of Insurers

COMAR 31.04.02.01 Purpose and Scope.

The purpose of this chapter is to ensure protection of the public interest by providing for the evaluation of the suitability of certain individuals who exercise control of any substantial portion of certain entities that do insurance business in the State, including an insurer, health maintenance organization, managed care organization, fraternal benefit society, nonprofit health service plan, and dental plan organization. This chapter does not apply to workers’ compensation self-insurance groups organized pursuant to Insurance Article, Title 25, Subtitle 3, Annotated Code of Maryland.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affiant” means an individual who certifies to the accuracy of statements made in a biographical affidavit.

(2) “Applicant” means a person who submits a biographical affidavit pursuant to Regulation .03A of this chapter.

(3) “Approved independent third party” means an independent third party as defined in §B(12) of this regulation that is on the currently approved independent third party list published by the NAIC on the Uniform Certificate of Authority website.

(4) “Background report” means documentation provided by an approved independent third party that complies with NAIC’s “Best Practices for NAIC Background Investigations” and details information verified or discovered in the course of the background investigation, or both.

(5) “Biographical affidavit” means the current NAIC Form 11, “Biographical Affidavit”, of the NAIC Uniform Certificate of Authority Application and must include a completed, state-specific “Disclosure and Authorization Concerning Background” form.

(6) “Certificate of authority” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(7) “Control” has the meaning stated in Insurance Article, §7-101, Annotated Code of Maryland.

(8) “Dental plan organization” has the meaning stated in Insurance Article, §14-401(c), Annotated Code of Maryland.

(9) “Entity” includes an insurer, health maintenance organization, managed care organization, fraternal benefit society, nonprofit health service plan, and dental plan organization.

(10) “Fraternal benefit society” has the meaning stated in Insurance Article, §8-402(a), Annotated Code of Maryland.

(11) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701(g), Annotated Code of Maryland.

(12) “Independent third party” means a consumer reporting agency regulated by the Federal Trade Commission and, therefore, subject to the Fair Credit Reporting Act:

(a) That is able to verify information contained in the biographical affidavit through the use of domestic and international resources;

(b) Whose officers, directors, or both, have stock ownership amounting to 1 percent or less of the applicant’s outstanding stock, unless the Commissioner grants written approval of an entity in which the officers, directors, or both, have more than 1 percent stock ownership; and

(c) That is at all times compliant with the “NAIC Background Investigation Guidelines” and Regulations .06 and .07 of this chapter relevant to the preparation of the background report and its submission to the Commissioner.

(13) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(14) “Managed care organization” has the meaning stated in Health-General Article, §15-101(e), Annotated Code of Maryland.

(15) “NAIC” means the National Association of Insurance Commissioners.

(16) “Nonprofit health service plan” has the meaning stated in Insurance Article, §14-102, Annotated Code of Maryland.

(17) “Person” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(18) “Principal management” means any person, regardless of title, who exercises control of any substantial portion of the general business of the insurer and may include the:

(a) Chairman of the board;

(b) President;

(d) Secretary;

(e) Treasurer;

(f) Controller or comptroller;

(g) Actuary;

(h) Directors; and

(i) Members of the executive committee.

(19) “Provider sponsored organization” has the meaning stated in Health-General Article, §19-7A-01(f), Annotated Code of Maryland.

(20) “Uniform Certificate of Authority Expansion Application” means the NAIC’s uniform process, adopted by the Commissioner, for use by an entity that wishes to expand its operations into one or more states.

(21) “Uniform Certificate of Authority Primary Application” means the NAIC’s uniform process, adopted by the Commissioner, for use in the formation of a new insurer to be domiciled in Maryland in order to obtain a certificate of authority, or for a foreign entity to use in making application to redomesticate to Maryland from another state.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.03 Biographical Affidavit.

A. Biographical affidavits shall be submitted on the individuals required by the applicable filing when:

(1) An entity files an application for a certificate of authority using the NAIC Uniform Certificate of Authority Primary Application;

(2) A foreign entity files an application for a certificate of authority using the Uniform Certificate of Authority Expansion Application;

(3) A foreign entity files an application to redomesticate to Maryland using the Uniform Certificate of Authority Primary Application;

(4) A person files a registration statement pursuant to Insurance Article, §7-603, Annotated Code of Maryland; and

(5) Any person seeking to acquire control of an insurer or other entity files a statement pursuant to Insurance Article, §7-304, Annotated Code of Maryland.

B. Upon written request of the Commissioner and within 30 days of such a request, a foreign entity holding a current certificate of authority in this State that had a change in principal management shall provide a biographical affidavit for the affiant listed in the request.

C. For any change in principal management of a domestic entity, a person shall submit a biographical affidavit for the affiant within 30 days of the date of change.

Cross References

31.04.02.02B(2)

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.04 Biographical Affidavit and Disclosure Authorization Format.

A. Form. Each biographical affidavit required by this chapter shall be submitted to the Commissioner and the approved independent third party in a legible format, in the most recent form made available by the NAIC.

B. Contents. The biographical affidavit requires an affiant to provide information, including the affiant’s employment history, education, personal information, and character.

C. Date. Biographical affidavits must be certified by the affiant, notarized, and dated no earlier than 1 year prior to the date of submission of the application or statement, or management change.

D. NAIC Disclosure and Authorization Concerning Background Form.

(1) Consent to Release Information. By completing the NAIC “Disclosure and Authorization Concerning Background” form, the affiant consents to:

(a) The release of the information in the biographical affidavit to the approved independent third party;

(b) The background investigation conducted by the approved independent third party; and

(2) An affiant may revoke the authorization at any time by delivering a written revocation to the applicant.

(3) The applicant shall, upon an affiant’s action pursuant to §D(2) of this regulation, forward such revocation promptly to any approved independent third party that either prepared or is preparing a background report under the “NAIC Disclosure and Authorization Concerning Background” form.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.05 Considerations Regarding Independent Third Parties.

A. The applicant is responsible for selecting an independent third party to perform the verification of the information contained in all submitted biographical affidavits.

B. When selecting the independent third party, the applicant:

(1) Must select an approved independent third party; and

(2) Is responsible for ensuring that the independent third party it selects is able to perform a complete investigation in the applicable jurisdictions.

C. The applicant is responsible for the payment of the services provided by the approved independent third party for the preparation and submission of the background report to the Commissioner.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.06 Background Report.

A. Contents. A background report shall conform to the NAIC Background Investigation Guidelines and the Best Practices for NAIC Background Investigations for the preparation and content of the response from an approved independent third party.

B. Submission Requirements.

(1) The background report shall be prepared by an approved independent third party.

(2) Background reports must be submitted directly to the Commissioner by the approved independent third party.

(3) The applicant is responsible for ensuring that the background report has been provided to the Commissioner.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

COMAR 31.04.02.07 Review of Submitted Information.

The information contained in the biographical affidavit, the background report, and any other information deemed relevant by the Commissioner will be reviewed by the Commissioner to evaluate the suitability, competency, character, and integrity of the affiant. The review will also evaluate whether discrepancies or inconsistencies exist between information disclosed in the biographical affidavit and the background report and whether follow-up action should be taken.

History

Administrative History: Effective date: June 12, 1969
Administrative History: Regulation .03 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .07 adopted and Appendix A repealed effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.03 to COMAR 31.04.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 5, 2007 (34:22 Md. R. 1979)
Administrative History: ——————
Administrative History: Chapter revised effective October 1, 2016 (43:18 Md. R. 1018)
Authority: Health-General Article, §§15-102.6, 19-705, 19-708, 19-7A-03, and 19-7A-04;Insurance Article, §§2-109, 2-205(c), 4-108, 4-113(a)(7)—(9), 7-304, 7-603, 8-412, 8-417, 14-109(3), and 14-405; Annotated Code of Maryland

31.04.03 Home and Executive Offices

COMAR 31.04.03.01 Authority and Purpose.

This chapter is considered necessary as an aid to the effectuation of the provisions of Insurance Article, §§2-112 and 4-115, Annotated Code of Maryland.

History

Administrative History: Effective date: March 16, 1992 (19:5 Md. R. 576)
Administrative History: Regulation .03 amended effective December 18, 1995 (22:25 Md. R. 1961)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.62 to COMAR 31.04.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-112, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.03.02 Applicability.

This chapter is applicable to all domestic insurers.

History

Administrative History: Effective date: March 16, 1992 (19:5 Md. R. 576)
Administrative History: Regulation .03 amended effective December 18, 1995 (22:25 Md. R. 1961)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.62 to COMAR 31.04.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-112, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.03.03 Home and Executive Offices.

An insurer's home office or executive office is the location at which significant aspects of the insurer's business operations are performed, and at which the insurer's books and records are prepared and maintained on a day-to-day basis and where a full-scope financial examination shall be made.

History

Administrative History: Effective date: March 16, 1992 (19:5 Md. R. 576)
Administrative History: Regulation .03 amended effective December 18, 1995 (22:25 Md. R. 1961)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.62 to COMAR 31.04.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 2-112, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.04.01 Required Financial Filings.

A. Annual Statements.

(1) Each domestic and foreign insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan that has been issued a certificate of authority by the Administration is required to annually file an annual statement with the Administration in paper or electronic format as specified in Regulation .02 of this chapter.

(2) Unless the Commissioner extends the time for good cause, the annual statements shall be filed:

(a) For insurance companies and nonprofit health service plans, on or before March 1 of each year;

(b) For health maintenance organizations:

(i) On or before March 1 of each year; or

(ii) If approved by the Commissioner, within 60 days after the end of their fiscal year; and

(3) The annual statements shall be:

(a) Prepared in accordance with the Annual Statement Instructions and Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners (NAIC);

(b) Supplemented by such related filings as shall be required by the Annual Statement Instructions.

(4) A domestic company’s annual statement shall be prepared under oath and signed by at least two executive officers. The executive officers authorized to sign the oath shall include:

(a) The president, vice-president, or chief financial officer; and

(b) The secretary, treasurer, CEO, or other officer approved by the Commissioner.

(5) A foreign company’s annual statement shall be prepared and executed in accordance with the laws and regulations of the company’s home state.

B. Quarterly Statements.

(1) Each domestic insurance company, health maintenance organization, dental plan organization and nonprofit health service plan that has been issued a certificate of authority by the Administration is required to file quarterly statements with the Administration.

(2) Unless the Commissioner extends the time for good cause, the quarterly statements shall be filed:

(a) For insurance companies, dental plan organizations and nonprofit health service plans, on or before May 15, August 15, and November 15 of each year; and

(b) For health maintenance organizations, May 15, August 15, and November 15 of each year, or if approved by the Commissioner, 45 days after the end of each quarter other than the quarter in which its fiscal year ends.

(3) The quarterly statements shall be prepared in accordance with the Annual Statement Instructions and Accounting Practices and Procedures Manual adopted by the NAIC.

(4) A domestic company’s quarterly statement shall be prepared under oath and signed by at least two executive officers. The executive officers authorized to sign the oath shall include:

(a) The president, vice-president, or chief financial officer; and

(b) The secretary, treasurer, CEO, or other officer approved by the Commissioner.

(5) A foreign company’s quarterly statement shall be prepared and executed in accordance with the laws and regulations of the company’s home state.

C. Annual Audited Financial Statements.

(1) Each domestic and foreign insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan that has been issued a certificate of authority by the Administration to engage in business in this State is required to annually file annual audited financial statements with the Administration.

(2) Unless the Commissioner extends the time for good cause, the annual audited financial statements shall be filed:

(a) For insurance companies, on or before June 1 of each year;

(b) For nonprofit health service plans, on or before March 1 of each year;

(d) For health maintenance organizations, June 1 of each year, or if approved by the Commissioner, within 150 days after the date their fiscal year ends.

History

Administrative History: Effective date: December 31, 1953
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.09 to COMAR 31.04.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01 and .02 adopted effective February 26, 2007 (34:4 Md. R. 403)
Administrative History: Regulation .01 amended effective October 1, 2019 (46:13 Md. R. 590)
Authority: Health-General Article, §§19-705, 19-717, and 19-728; Insurance Article, §§2-109(a)(1), 4-116, 14-121, 14-411(a), and 14-413; Annotated Code of Maryland

COMAR 31.04.04.02 Form of Financial Filings.

A. Definition.

(1) In this regulation, the following term has the meaning indicated.

(2) “Required related annual filings” means, but is not limited to, the Statement of Actuarial Opinion, Risk-Based Capital Report, and Management's Discussion and Analysis.

B. Filings. The filings required by §§C and D of this regulation shall be made in accordance with the Annual Statement Instructions adopted by the NAIC.

C. Domestic Companies.

(1) Each domestic insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan that is required to file an annual statement and required related annual filings, quarterly statements, and annual audited financial statements, as well as all amendments and addenda to these filings, shall make those filings on paper with the Administration.

(2) Each domestic insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan shall also file its annual statements, required related annual filings, quarterly statements, and annual audited financial statements, as well as all amendments and addenda to these filings, in both a paper and an electronic format with the NAIC.

D. Foreign Companies

(1) Each foreign insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan that has been issued a certificate of authority by the Administration shall file its annual statements, required related annual filings, and annual audited financial statements, as well as all amendments and addenda to these filings, in an electronic format with the NAIC.

(2) Foreign companies shall file the documents required by §D(1) of this regulation with the NAIC on or before the due dates specified in Maryland law. These filings shall be considered to have been filed with the Administration when they are received by the NAIC.

(3) The Administration shall use the dates the documents are received by the NAIC in order to determine compliance with Maryland filing requirements, and for imposing any fines or penalties specified in Maryland law for failing to file these documents on or before their due dates.

(4) Each foreign insurance company, health maintenance organization, dental plan organization, and nonprofit health service plan that has been issued a certificate of authority by the Administration shall annually, on or before the filing due dates specified in this regulation, provide the administration with an annual statement jurat page, signed by appropriate officers of the company, and affirming that the electronic filing made by the company with the NAIC is, except for formatting differences, an exact copy of the Annual Statement.

Cross References

31.04.04.01A(1)

History

Administrative History: Effective date: December 31, 1953
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.09 to COMAR 31.04.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01 and .02 adopted effective February 26, 2007 (34:4 Md. R. 403)
Administrative History: Regulation .01 amended effective October 1, 2019 (46:13 Md. R. 590)
Authority: Health-General Article, §§19-705, 19-717, and 19-728; Insurance Article, §§2-109(a)(1), 4-116, 14-121, 14-411(a), and 14-413; Annotated Code of Maryland

COMAR 31.04.05.01 Application.

A. An application of a foreign stock or mutual insurance company for a license to transact the insurance business in Maryland may not be considered until it has met the requirements of either §B or C of this regulation.

B. The foreign stock or mutual insurance company shall have continuously, actively, and successfully transacted the business of insurance for at least 2 years immediately before the making of the application. However, the Commissioner may waive the 2-year requirement, if the Commissioner considers it in the public interest. In the case of reorganization, merger, or consolidation of stock or mutual insurance companies, the surviving company or new company may, in the discretion of the Commissioner, be considered as having the age of the eldest company which is a party to the reorganization, merger, or consolidation for the purpose of complying with the requirements of this regulation.

C. In the case of a foreign stock company making application within the 2-year period in §B of this regulation, the company shall have a capital of at least $3,000,000 and a surplus of at least $4,000,000 (in excess of its capital stock), and, in the case of a foreign mutual company making application within the 2-year period in §B of this regulation, a surplus of at least $7,000,000 if the company's assets are invested substantially in accordance with the Insurance Laws of Maryland governing investments, and will be maintained on the same basis.

Agency Note: Experience has demonstrated that until a stock or mutual insurance company has been actively engaged in the business of insurance for at least 2 years, or within the 2-year period has adequately established its financial worth through the accumulation of certain minimum capital and surplus, there is not a sufficient basis upon which to form a judgment as to whether its methods and practices in the conduct of its business are such as to protect the interests of the policyholders and people of this State, or to confirm that the general fitness and experience of its officers and directors is sufficient to warrant that the business of the company will be efficiently conducted in accordance with the intent and purpose of the laws of Maryland which regulate the business of insurance, and that the public interest will not be jeopardized by admitting the company to engage in the business of insurance in this State.

History

Administrative History: Effective date: June 22, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .01 amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.05 to COMAR 31.04.05 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 4-102, 4-103, and 4-104, Annotated Code of Maryland

31.04.06 Conflict of Interests

COMAR 31.04.06.01 Interrogatory.

In order to assure disclosure of possible conflict of interests, foreign and domestic companies shall be able to answer in the affirmative the following interrogatory which is contained in the “General Interrogatories” section of the National Association of Insurance Commissioners (NAIC) annual statement:

“Has the reporting entity an established procedure for disclosure to its board of directors or trustees of any material interest or affiliation on the part of any of its officers, directors, trustees, or responsible employees which is in, or is likely to, conflict with the official duties of such persons?”

History

Administrative History: Effective date: January 30, 1968
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.08 to COMAR 31.04.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03 amended effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-116, Annotated Code of Maryland

COMAR 31.04.06.02 Company Policy and Statements.

A. All companies, both foreign and domestic, shall have ready for convenient inspection by examiners from this Administration both of the following:

(1) A board of directors' or trustees' resolution or bylaw setting forth the company's policy as to disclosure of a possible conflict of interest;

(2) Questionnaires completed and signed annually by officers, directors, trustees, and responsible employees.

B. The following two samples meet Insurance Administration requirements and should be followed closely by domestic companies, though they may pass additional board of directors' or trustees' resolutions or bylaws or require additional information on their questionnaires.

C. Foreign companies will be allowed sufficient latitude in the forms they use, so that they will not be obliged to use a special form merely to satisfy Maryland requirements. However, they should be substantially equivalent or more than equivalent in their breadth of coverage and the strictness of their requirements. The variances should not have the effect of lessening or weakening the requirements of the samples.

History

Administrative History: Effective date: January 30, 1968
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.08 to COMAR 31.04.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03 amended effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-116, Annotated Code of Maryland

COMAR 31.04.06.03 Sample Board of Directors' or Trustees' Resolution or Bylaw.

(1) Be It Resolved That all Officers, Directors, Trustees and Employees of the Company in their transactions with others are expected to act in the best interests of the Company and not for their own advantage.

(2) Resolved Further, That this policy requires that—

(a) Officers, Directors, Trustees and Responsible Employees and members of their families must have no relationships nor engage in any activities that might impair their independence of judgment concerning Company business of such Officers, Directors, Trustees or Responsible Employees.

(b) They must have no personal financial interests that might impair their independence of judgment or influence their decisions or actions on Company business in the direction of such personal financial interests.

(c) They must not accept gifts, benefits, or unusual hospitality that might tend to influence them in the performance of their duties.

(d) If any possible conflict of interest exists, the individual concerned must disclose the facts by completing the attached questionnaire and returning it to the secretary of the Company or an officer of the Company superior to the Secretary.

(3) Resolved Further, That the officer of the Company to whom the questionnaires are returned must refer any conflict, disclosed to him, to the Board for review and appropriate action on or before ___________ 20__, and that a similar questionnaire shall be completed and returned in each succeeding year.

History

Administrative History: Effective date: January 30, 1968
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.08 to COMAR 31.04.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03 amended effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-116, Annotated Code of Maryland

COMAR 31.04.06.04 Sample Questionnaire.

(1) Do you or does any member of your family have any relationships or engage in any activities that might impair your independence of judgment concerning Company business?

Yes _______ No________

(2) Do you or does any member of your family have any personal financial interests that might impair your independence of judgment or influence your decisions or actions concerning Company business in the direction of such personal financial interests?

Yes_______ No_______

(3) Have you accepted gifts, benefits, or unusual hospitality that might tend in any way to impair your independence of judgment or affect your decisions or actions concerning Company business?

Yes________ No_______

(If your answer to any of the foregoing three questions is yes, please attach to this questionnaire a full explanation.)

| _____________________________ | ______________________________ | | --- | --- | | Dated | Signature | | ______________________________ | | | Position | |

History

Administrative History: Effective date: January 30, 1968
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.08 to COMAR 31.04.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .03 amended effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-116, Annotated Code of Maryland

31.04.07 Proxies, Consents, and Authorizations of Domestic Stock Insurers

COMAR 31.04.07.01 Applicability.

A. This chapter does not apply to any insurer if 95 percent or more of its equity securities is owned or controlled by a parent or an affiliated insurer and the remaining securities are held of record by less than 500 persons. A domestic stock insurer which files with the Securities and Exchange Commission with respect to any class of securities forms of proxies, consents, and authorizations complying with the requirements of the Securities Exchange Act of 1934, as amended, and its applicable regulations, is exempt from the provisions of this chapter with respect to that class of securities.

B. A domestic stock insurer that has any class of equity securities held of record by 300 or more persons, or any director, officer, or employee of that insurer, or any other person, may not solicit, or permit the use of the person's name to solicit, by mail or otherwise, any proxy, consent, or authorization in respect to any class of equity securities in contravention of this regulation and Schedules A and B in Regulations .14 and .15 of this chapter.

C. Unless proxies, consents, or authorizations with respect to any class of equity securities of a domestic insurer subject to §B of this regulation are solicited by or on behalf of the management of the insurer from the holders of record of the securities in accordance with this chapter and its schedules prior to any annual or other meeting of the security holders, the insurer shall file with the Commissioner and transmit to every security holder who is entitled to vote in regard to any matter to be acted upon at the meeting and from whom a proxy is not solicited a written information statement containing the information specified in Schedule C of Regulation .16 of this chapter.

Cross References

31.04.07.03A

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(2) “Associate” means:

(a) A corporation or organization (other than the issuer or a majority owned subsidiary of the issuer) of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities;

(b) A trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and

(c) A relative or spouse of that person, or any relative of the spouse, who has the same home as the person or who is a director or officer of the issuer or any of its parents or subsidiaries.

(3) “Beneficial owner” means a person who, directly or indirectly, through a contract, arrangement, understanding, relationship, or otherwise, has or shares:

(a) Voting power including the power to vote, or the power to direct voting of, a security; or

(b) Investment power which includes the power to dispose of, or to direct the disposition of, the security.

(4) “Control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

(5) “Issuer” means the issuer of the securities in respect of which a proxy is solicited.

(6) “Last fiscal year” means the last fiscal year of the issuer ending before the date of the meeting for which proxies are to be solicited.

(7) “Officer” means the president, secretary, treasurer, any vice president in charge of a principal business function (such as sales, administration, or finance), and any other individual who performs similar policy-making functions for the insurer.

(8) “Parent” means an affiliate controlling the person directly or indirectly through one or more intermediaries.

(9) “Person” means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, or a government or political subdivision of a government.

(10) “Proxy statement” means the statement required by Regulation .04 of this chapter, whether or not contained in a single document.

(11) Solicitation.

(a) “Solicitation” means:

(i) A request for a proxy, whether or not accompanied by or included in a form of proxy;

(ii) A request to execute or not to execute, or to revoke, a proxy; or

(iii) The furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy.

(b) “Solicitation” does not apply, however, to:

(i) The furnishing of a form of proxy to a security holder upon the unsolicited request of the security holder;

(ii) The performance by the issuer of acts required by Regulation .08 of this chapter; or

(iii) The performance by any person of ministerial acts on behalf of a person soliciting a proxy.

(12) “Trust” includes only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

Cross References

31.04.07.03B

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.03 Solicitations to Which Chapter Applies.

A. Regulation .10 of this chapter applies to every solicitation that is subject to Regulation .01 of this chapter.

B. Regulations .02—.09 and Regulation .11 of this chapter apply to every solicitation that is subject to Regulation .01 except the following:

(1) A solicitation made otherwise than on behalf of the issuer where the total number of persons solicited is not more than ten;

(2) A solicitation by a person with respect to securities carried in the person's name or in the name of the person's nominee (otherwise than as voting trustee), or held in the person's custody, if the person:

(a) Receives no commission or remuneration for the solicitation, directly or indirectly, other than reimbursement of reasonable expenses;

(b) Furnishes promptly to the solicited person a copy of all soliciting material with respect to the same subject matter or meeting received from all persons who shall furnish copies for that purpose and who shall, if requested, defray the reasonable expenses to be incurred in forwarding the material; and

(c) In addition, does no more than impartially instruct the person solicited to forward a proxy to the person, if any, to whom the person solicited desires to give a proxy, or impartially request from the person solicited instructions as to the authority to be conferred by the proxy and state that a proxy will be given if no instructions are received by a certain date;

(3) A solicitation by a person with respect to securities of which it is the beneficial owner;

(4) A solicitation through the medium of a newspaper advertisement which informs security holders of a source from which they may obtain copies of a proxy statement, form of proxy, and any other soliciting material, and does no more than:

(a) Name the issuer;

(b) State the reason for the advertisement; and

(5) Any solicitation which the Commissioner finds for good cause should be exempted from this chapter or any part of this chapter.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.04 Information to be Furnished Security Holders.

A. A solicitation subject to this chapter may not be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in Schedule A.

B. Annual Report.

(1) If the solicitation is made on behalf of the issuer and relates to an annual meeting of security holders at which directors are to be elected, each proxy statement furnished pursuant to §A of this regulation shall be accompanied or preceded by an annual report to security holders as decided in this section.

(2) The report shall contain, in comparative columnar form, such financial statements for the last 2 fiscal years, prepared on a consistent basis, as will in the opinion of the management adequately reflect the financial position of the issuer at the end of each year, and the results of its operations for each year. Consolidated financial statements of the issuer and its subsidiaries shall be included in the report if they are necessary to reflect the financial position and results of operations of the issuer and its subsidiaries, but in that case the individual statements of the issuer may be omitted. The Commissioner may, upon the request of the issuer, permit the omission of financial statements for the earlier of the 2 fiscal years upon a showing of good cause.

(3) The financial statements for the last 2 fiscal years required by §B(2) of this regulation shall be prepared in a manner acceptable to the Commissioner.

(4) The report shall include, in comparative columnar form, a summary of issuer's operations, or the operations of the issuer and its subsidiaries consolidated, or both as appropriate, for each of the last 5 fiscal years of the issuer (or the life of the issuer and its predecessors, if less).

(5) The report shall contain a brief description of the business or businesses done by the issuer and its subsidiaries during the most recent fiscal year which will, in the opinion of management, indicate the general nature and scope of the business of the issuer and its subsidiaries.

(6) The report shall identify each of the issuer's directors and officers and shall indicate the principal occupation or employment of each person and the name and principal business of any organization by which the person is so employed.

(7) The report shall identify the principal market in which securities of any class entitled to vote at the meeting are traded, stating the range of bid and asked quotations for each quarterly period during the issuer's 2 most recent fiscal years, and shall set forth each dividend paid during the 2-year period.

(8) Subject to the foregoing requirements, the report may be in any form considered suitable by management, and the information required by §B(4)—(7) of this regulation may be presented in an appendix or other separate section of the report, if the attention of security holders is called to the presentation.

(9) This section does not apply, however, to solicitations made on behalf of the management before the financial statements are available if solicitation is being made at the time in opposition to the management and if the management's proxy statement includes an undertaking in bold face type to furnish the annual report to all persons being solicited, at least 20 days before the date of the meeting.

C. Two copies of the report sent to security holders pursuant to this regulation shall be mailed to the Commissioner not later than the date on which the report was first sent or given to security holders, or the date on which preliminary copies of solicitation material are filed pursuant to Regulation .07 of this chapter, whichever date is later.

D. If the issuer knows that securities of any class entitled to vote at a meeting with respect to which the issuer intends to solicit proxies, consents, or authorizations are held of record by a broker, dealer, bank, or voting trustee, or their nominees, the issuer shall inquire of the record holder at least 10 days before the record date for the meeting of security holders whether other persons are the beneficial owners of the securities and, if so, the number of copies of the proxy and other soliciting material and, in the case of an annual meeting at which directors are to be elected, the number of copies of the annual report to security holders, necessary to supply these materials to beneficial owners. The issuer shall supply the record holder in a timely manner with additional copies assembled in a form and at a place the record holder may reasonably request, in order to address and send one copy to each beneficial owner of securities so held and shall, upon the request of the record holder, pay its reasonable expenses for mailing the materials to security holders to whom the material is sent.

Cross References

31.04.07.02B(10)

31.04.07.12D

31.04.07.12D(2)

31.04.07.12E

31.04.07.12F

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.05 Requirements as to Proxy.

A. Form of Proxy.

(1) The form of proxy shall:

(a) Indicate in bold face type whether or not the proxy is solicited on behalf of the insurer's board of directors, or, if not, by whom it is solicited;

(b) Provide a specifically designated blank space for dating the proxy; and

(c) Identify clearly and impartially each matter or group of related matters intended to be acted upon, whether proposed by the issuer or by security holders.

(2) Reference need not be made to proposals as to which discretionary authority is conferred pursuant to §C of this regulation.

B. Contents.

(1) Means shall be provided in the form of proxy by which the person solicited is afforded an opportunity to specify by ballot a choice between approval or disapproval of, or abstention with respect to, each matter or group of related matters referred to as intended to be acted upon, other than elections to office. A proxy may confer discretionary authority with respect to matters as to which a choice is not specified, if the form of proxy states in bold face type how it is intended to vote the shares represented by the proxy in each case.

(2) A form of proxy, which provides both for the election of directors and for action on other specified matters, shall be prepared clearly to provide, by a box or otherwise, a means by which the security holder may withhold authority to vote for any nominee for election as a director. The form of proxy, which is executed by the security holder in a manner as not to withhold authority to vote for the election of all nominees, shall be considered to grant authority for all nominees for which a vote is not withheld, if the form of proxy so states in bold face type.

C. A proxy may confer discretionary authority to vote with respect to any of the following matters:

(1) Matters which the persons making the solicitation do not know, a reasonable time before the solicitation, are to be presented at the meeting, if a specific statement to that effect is made in the proxy statement or form of proxy;

(2) Approval of the minutes of the prior meeting if the approval does not amount to ratification of the action taken at that meeting;

(3) The election of any individual to any office for which a bona fide nominee is named in the proxy statement and the nominee is unable to serve or for good cause will not serve;

(4) Any proposal omitted from the proxy statement and form of proxy pursuant to Regulation .09 or .10 of this chapter; and

(5) Matters incident to the conduct of the meeting.

D. A proxy may not confer authority to vote for the election of any individual to any office for which a bona fide nominee is not named in the proxy statement, or to vote at any annual meeting, other than the next annual meeting (or any adjournment of it), to be held after the date on which the proxy statement and form of proxy are first sent or given to security holders. A person is not considered to be a bona fide nominee and may not be named the bona fide nominee unless the individual has consented to being named in the proxy statement and to serve if elected.

E. The proxy statement or form of proxy shall provide, subject to reasonable specified conditions, that the securities represented by the proxy will be voted and that, if the person solicited specifies by means of a ballot provided pursuant to §B of this regulation a choice with respect to any matter to be acted upon, the securities will be voted in accordance with specifications so made.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.06 Presentation of Information in Proxy Statement.

A. The information included in the proxy statement shall be clearly presented, the statements made shall be divided into groups according to subject matter, and the various groups of statements shall be preceded by appropriate headings.

B. All proxy statements shall disclose, under an appropriate caption, the date by which proposals of security holders intended to be presented at the next annual meeting shall be received by the issuer for inclusion in the issuer's proxy statement and form of proxy relating to that meeting. This date shall be calculated in accordance with the provisions of Regulation .09A of this chapter. If the date of the next annual meeting is subsequently advanced by more than 30 calendar days or delayed by more than 90 calendar days from the date of the annual meeting to which the proxy statement relates, the issuer shall, in a timely manner, inform security holders of the change, and the date by which proposals of security holders must be received, by any means reasonably calculated to so inform them.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.07 Material Required to be Filed.

A. Two preliminary copies of the proxy statement and form of proxy, and any other soliciting material to be furnished to security holders with the proxy (or the information statement pursuant to Schedule C), shall be filed with the Commissioner at least 10 days before the date final copies of the material are first sent or given to security holders, or a shorter period before that date as the Commissioner may authorize upon a showing of good cause.

B. Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to security holders after the proxy statement shall be filed with the Commissioner at least 2 days (exclusive of Saturdays, Sundays, and holidays) before the date copies of the material are first sent or given to security holders, or a shorter period before the date as the Commissioner may authorize upon a showing of good cause.

C. Two definitive copies of the proxy statement, form of proxy, and all other soliciting material (or the information statement), in the form in which the material is furnished to security holders, shall be filed with, or mailed for filing to, the Commissioner not later than the date the material is first sent or given to any security holder.

D. Copies of replies to inquiries from security holders requesting further information, and copies of communications that do no more than request that forms of proxy previously solicited be signed and returned, do not need to be filed pursuant to this regulation.

E. Despite the provisions of §§A and B of this regulation and of Regulation .12E of this chapter, copies of soliciting material in the form of speeches, press releases, and radio or television scripts may, but need not, be filed with the Commissioner before use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Commissioner as required by §C of this regulation not later than the date the material is used or published. The provisions of §§A and B of this regulation and of Regulation .12E of this chapter apply, however, to any reprints or reproductions of all or any part of this material.

F. If any proxy statement, form of proxy, or other material filed pursuant to this regulation is amended or revised, one of the copies of the amended or revised material filed pursuant to this regulation shall be marked to indicate clearly and precisely the changes.

Cross References

31.04.07.04C

31.04.07.09D

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.08 Mailing Communications for Security Holders.

A. If the management of the issuer has made or intends to make any solicitation subject to this chapter, the issuer shall perform the acts in §§B—D of this regulation requested in writing with respect to the same subject matter or meeting by any security holder who is, or security holders who are, entitled to vote at least 1 percent of the votes entitled to be voted on the matter and who shall defray the reasonable expenses to be incurred by the issuer in the performance of the act or acts requested.

B. The issuer shall mail or otherwise furnish to a security holder, as promptly as practicable after the receipt of the request:

(1) A statement of the approximate number of record owners and, to the extent known to the issuer, the approximate number of beneficial owners of any class of securities, any of whom have been or are to be solicited on behalf of the management, or any group of whom the security holder shall designate; and

(2) An estimate of the cost of mailing a specified proxy statement, form of proxy, or other communication to the owners.

C. Issuer Responsibilities.

(1) Copies of any proxy statement, form of proxy, or other communication furnished by the security holder shall be mailed by the issuer to any of the security owners specified in §B(1) of this regulation as the security holder designates.

(2) The material furnished by the security holder shall be mailed with reasonable promptness after receipt of the material to be mailed, envelopes or other containers, and postage or payment for postage. The issuer need not, however, mail any material before the first day that solicitation is made on behalf of the issuer.

(3) The issuer is not responsible for the proxy statement, form of proxy, or other communication.

D. Instead of performing the acts specified in §§B—C of this regulation, the issuer may, at its option, furnish promptly to a security holder:

(1) A reasonably current list of the names and addresses of the record owners and, to the extent known to the issuer, the beneficial owners the security holder designates; and

(2) A schedule of the handling and mailing costs if the schedule has been supplied to the issuer.

Cross References

31.04.07.02B(11)(b)(ii)

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.09 Proposals of Security Holders.

A. If any holder or holders of an issuer's securities (hereafter referred to as the “proponent”) notifies the issuer in writing not less than 90 days before the issuer's annual meeting of holder's intention to present a lawful proposal for action at an upcoming meeting of the issuer's security holders, and at the time of the notice the proponent is entitled to vote at least 1 percent of the votes entitled to be voted on the proposal, the issuer shall:

(1) Set forth the proposal in its proxy statement with the name and address of the proponent;

(2) Identify it in its form of proxy; and

(3) Provide for the specification of approval or disapproval of the proposal.

B. If the issuer opposes any proposal received from a proponent, it shall also, at the request of the proponent, include in its proxy statement a statement by the proponent of not more than 200 words in support of the proposal.

C. The issuer may omit a proposal and any statement in support from its proxy statement and form of proxy under any of the following circumstances:

(1) The proponent has submitted more than one proposal in connection with a particular meeting;

(2) The proposal is more than 300 words in length;

(3) The proposal or the supporting statement is contrary to any provision of this chapter or the schedules attached, including Regulation .10 of this chapter which prohibits false or misleading statements in proxy soliciting materials;

(4) The proposal relates to the enforcement of a personal claim or the redress of a personal grievance against the issuer, its management, or any other person;

(5) The proposal deals with a matter not significantly related to the issuer's business, a matter beyond the issuer's power to effectuate, a matter relating to the conduct of the ordinary business operations of the issuer, or an election to office;

(6) The proposal is counter to a proposal to be submitted by the issuer at the meeting, the proposal has been rendered moot, or the proposal relates to specific amounts of cash or stock dividends;

(7) The proposal is substantially duplicative of a proposal previously submitted to the issuer by another proponent, which proposal will be included in the management's proxy material for the meeting; or

(8) Substantially the same proposal has previously been submitted to security holders in the issuer's proxy statement and form of proxy relating to any annual or special meeting of security holders held within the preceding 5 calendar years, and received less than 5 percent of the total number of votes cast at the time of its most recent submission.

D. If the issuer intends to omit any proposal from its proxy statement or forms of proxy, or both, it shall notify the proponent in writing of its intention at least 10 days before the issuer's preliminary proxy material is filed pursuant to Regulation .07A of this chapter.

Cross References

31.04.07.03B

31.04.07.06B

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.10 False or Misleading Statements.

A proxy statement, form of proxy, notice of meeting, information statement, or other communication, written or oral, subject to this regulation may not contain any statement which, at the time and in the light of the circumstances under which it is made:

A. Is false or misleading with respect to any material fact; or

B. Omits to state any material fact necessary:

(1) In order to make the statements not false or misleading; or

(2) To correct any statement in any earlier communication with respect to the same meeting or subject matter which has become false or misleading.

Cross References

31.04.07.03A

31.04.07.09C(3)

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.11 Prohibition of Certain Solicitations.

A person making a solicitation that is subject to this chapter may not solicit any undated or postdated proxy, or any proxy that provides that it shall be considered to be dated as of any date after the date on which it is signed by the security holder subject to this chapter.

Cross References

31.04.07.03B

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.12 Special Provisions Applicable to Election Contests.

A. Solicitations to Which this Regulation Applies. This regulation applies to any solicitation by any person or group for the purpose of opposing a solicitation subject to this chapter by any other person or group with respect to the election or removal of directors at any annual or special meeting of security holders.

B. Participant or Participant in a Solicitation.

(1) In this regulation, “participant” and “participant in a solicitation” include:

(a) The issuer;

(b) Any director of the issuer, and any nominee for whose election as a director proxies are solicited; or

(c) Any other person, acting alone or with one or more other persons, committees, or groups, in organizing, directing, or financing the solicitation.

(2) In this regulation, “participant” and “participant in a solicitation” do not include:

(a) A bank, broker, or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of securities, and who is not otherwise a participant;

(b) Any person or organization retained or employed by a participant to solicit security holders, or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties;

(c) Any person employed in the capacity of attorney, accountant, advertising, public relations, or financial adviser, whose activities are limited to the performance of duties in the course of that employment;

(d) Any person regularly employed as an officer or employee of the issuer or any of its subsidiaries or affiliates who is not otherwise a participant; or

(e) Any officer or director of, or any person regularly employed by, any other participant, if the officer, director, or employee is not otherwise a participant.

C. Filing of Information Required by Schedule B.

(1) A solicitation subject to this section may not be made by any person other than the issuer unless at least 5 business days prior, or a shorter period as the Commissioner may authorize upon a showing of good cause, there has been filed with the Commissioner, by or on behalf of each participant in the solicitation, a statement in duplicate containing the information specified by Schedule B and a copy of any material proposed to be distributed to security holders in furtherance of the solicitation.

(2) Within 5 business days after a solicitation subject to this regulation is made by the issuer, or a longer period the Commissioner may authorize upon showing of good cause, there shall be filed with the Commissioner, by or on behalf of each participant in the solicitation other than the issuer, a statement in duplicate containing the information specified by Schedule B.

(3) If any solicitation on behalf of the issuer or any other person has been made, or if proxy material is ready for distribution, before a solicitation subject to this regulation in opposition, a statement in duplicate containing the information specified in Schedule B shall be filed with the Commissioner, by or on behalf of each participant in the prior solicitation, other than the issuer, as soon as reasonably practicable after the commencement of the solicitation in opposition.

(4) If, after the filing of the statements required by §§A, B, and C of this regulation, additional persons become participants in a solicitation subject to this regulation, there shall be filed with the Commissioner, by or on behalf of these persons, a statement in duplicate containing the information specified by Schedule B, within 3 business days after the person becomes a participant, or a longer period the Commissioner may authorize upon a showing of good cause.

(5) If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amendment to the statement shall be filed promptly with the Commissioner.

(6) Each statement and amendment filed pursuant to this section shall be part of the public files of the Commissioner.

D. Solicitations Before Furnishing Required Written Proxy Statement. Notwithstanding the provisions of Regulation .04A of this chapter, a solicitation subject to this regulation may be made before furnishing security holders a written proxy statement containing the information specified in Schedule A with respect to the solicitation, if:

(1) The statements required by §C of this regulation are filed by or on behalf of each participant in the solicitation;

(2) No form of proxy is furnished to security holders before the time the written proxy statement required by Regulation .04A of this chapter is furnished to these persons; however, §D(2) of this regulation does not apply if a proxy statement meeting the requirements of Schedule A has been furnished to security holders;

(3) At least the information specified in §C(2) and (3) of this regulation of the statements required by §C of this regulation to be filed by each participant, or an appropriate summary, are included in each communication sent or given to security holders in connection with the solicitation; and

(4) A written proxy statement containing the information specified in Schedule A with respect to a solicitation is sent or given to security holders at the earliest practicable date.

E. Solicitations Before Furnishing Required Written Proxy Statement-Filing Requirements. Two copies of any soliciting materials proposed to be sent or given to security holders before the furnishing of the written proxy statement required by Regulation .04A of this chapter shall be filed with the Commissioner in preliminary form at least 5 business days before the date definitive copies of the material are first sent or given to the persons, or a shorter period the Commissioner may authorize upon a showing of good cause.

F. Notwithstanding the provisions of Regulation .04B of this chapter, two copies of any portion of the annual report referred to in Regulation .04B of this chapter which comments upon or refers to any solicitation subject to this regulation, or to any participant in any solicitation, other than the solicitation by the management, shall be filed with the Commissioner as proxy material subject to this chapter. This portion of the report shall be filed with the Commissioner, in preliminary form, at least 5 business days before the date copies of the report are first sent or given to security holders.

Cross References

31.04.07.07E

31.04.07.14A

31.04.07.14B

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.13 Solicitations and Materials Complying With NAIC Model Regulation and Schedules.

Notwithstanding the foregoing regulations, the Commissioner may permit the solicitation of proxies, consents, or authorizations, if the manner of solicitation and the form of proxy, proxy statement, and other documents used in the solicitation comply with Regulations .14—.16 of this chapter.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.14 Schedule A.

Item 1. Revocability of Proxy.

State whether or not the person giving the proxy has the power to revoke it. If the right of revocation before the proxy is exercised is limited, or is subject to compliance with any formal procedure, briefly describe the limitation or procedure.

Item 2. Dissenters' Rights of Appraisal.

Outline briefly any rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon, and indicate any statutory procedure required to be followed by dissenting security holders in order to perfect their rights. When these rights may be exercised only within a limited time after the proposal's date of adoption, the filing of a charter amendment, or other similar act, indicate whether the person solicited will be notified of the date.

Item 3. Persons Making the Solicitation.

A. Solicitations not Subject to Regulation .12 of this Chapter.

(1) State if the solicitation is made by the issuer. Give the name of any director of the issuer who has informed the issuer in writing that the director intends to oppose an action intended to be taken by the issuer, and indicate the action which the director intends to oppose.

(2) If the solicitation is made by someone other than by the issuer, state the names of the persons by whom and on whose behalf it is made.

(3) If the solicitation is to be made by other than the use of the mails, describe the methods to be employed. If the solicitation is to be made by specially engaged employees or paid solicitors, state:

(a) The material features of any contract or agreement for the solicitation and identify the parties; and

(b) The cost or anticipated cost.

(4) State the names of the persons who will bear the cost of solicitation, directly or indirectly.

B. Solicitations Subject to Regulation .12 of this Chapter.

(1) State who will make the solicitation and describe the methods employed to solicit security holders.

(2) If regular employees of the issuer or any other participant in a solicitation have been or are to be employed to solicit security holders, describe the class or classes of employees to be so employed, and the manner and nature of their employment for this purpose.

(3) If specially engaged employees, representatives, or other persons have been or are to be employed to solicit security holders, state:

(a) The material features of any contract or arrangement for the solicitation, and identify the parties;

(b) The cost or anticipated cost; and

(c) The approximate number of employees or employees of another person (naming the other person) who will solicit security holders.

(4) State the total amount estimated to be spent and the total expenditures to date for, or in connection with, the solicitation of security holders.

(5) State who will bear the cost of the solicitation. If reimbursement will be sought from the issuer, state whether the question of reimbursement will be submitted to a vote of security holders.

(6) If a solicitation is terminated pursuant to a settlement between the issuer and another participant in the solicitation, describe the terms of the settlement, including the cost or anticipated cost to the issuer.

Item 4. Interest of Certain Persons in Matters to be Acted Upon.

A. Solicitations Not Subject to Regulation .12 of this Chapter. Describe briefly any substantial interest, direct or indirect, of each of the following persons in a matter to be acted upon, other than elections to office:

(1) If the solicitation is made on behalf of the issuer, each current director or officer of the issuer;

(2) If the solicitation is made for other than on the issuer's behalf, any person who would be a participant in a solicitation (except the issuer or an officer, director, or nominee of the issuer);

(3) Each nominee for election as a director of the issuer; and

(4) Each associate of the foregoing persons.

B. Solicitations Subject to Regulation .12 of this Chapter. Describe briefly any substantial interest, direct or indirect, of each participant (except the issuer) in any matter to be acted upon at the meeting. Include, with respect to each participant, the information required by Items 2A, 2D, 3, 4B, and 4C of Schedule B.

Item 5. Voting Securities and Principal Holders of Voting Securities.

A. State, for each class of voting securities of the issuer entitled to be voted at the meeting, the number of shares outstanding and the number of votes to which each class is entitled.

B. Give the date that the record of security holders entitled to vote at the meeting will be determined. If the right to vote is not limited to security holders of record on that date, indicate the conditions under which other security holders may be entitled to vote.

C. If action is to be taken with respect to the election of directors and if the persons solicited have cumulative voting rights:

(1) Make a statement that they have these rights;

(2) Describe the rights;

(3) State the conditions precedent to the exercise of these rights; and

(4) Indicate if discretionary authority to cumulate votes is solicited.

D. Furnish the following information as of the most practicable date, in substantially the tabular form indicated, with respect to:

(1) A person or group of persons who is known to be the beneficial owner of more than 5 percent of any class of securities; and

(2) All directors and nominees, naming them, and directors and officers of the issuer as a group, without naming them.

| (1) | (2) | (3) | (4) | | --- | --- | --- | --- | | | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |

E. Change in Control.

(1) If, to the knowledge of the person on whose behalf the solicitation is made, a change in control of the issuer has occurred since the beginning of its last fiscal year, state:

(a) The name of the person or persons who acquired control;

(b) The amount and the source of the consideration used by the person or persons;

(d) The date and a description of the transactions that resulted in the change of control;

(e) The percentage of voting securities of the issuer now beneficially owned directly or indirectly by the person or persons who acquired control; and

(f) The identity of the person or persons from whom control was assumed.

(2) Describe any arrangements which may at a later date result in a change of control of the issuer.

Item 6. Directors and Executive Officers.

If action is to be taken with respect to the election of directors, furnish the following information, in tabular form to the extent practicable, about each person nominated for election as a director and each person whose term of office will continue after the meeting. However, if the solicitation is made on behalf of persons other than the issuer, the information required should only be furnished as to nominees of the persons making the solicitation.

A. Identification of Directors and Officers. List the names and ages of all directors and officers of the issuer and all persons nominated or chosen to become directors or officers. Indicate all positions and offices with the issuer held by each person; state the term of office as director or officer, or both, and any period during which the person served. Briefly describe any arrangement or understanding between the person and any other person or persons (naming the persons) pursuant to which the person was or is to be selected as a director, officer, or nominee. The information regarding officers does not need to be furnished in proxy or information statements if the information is furnished in a separate item in the issuer's annual report to stockholders.

B. Family Relationships. State the nature of a family relationship not more remote than first cousin between a director, officer, or person nominated or chosen by the issuer to become a director or officer. State the nature of any family relationship between any such person and an officer or director of any of the issuer's parent companies, subsidiaries, or other affiliates.

C. Business Experience. State the principal occupations and employment during the past 5 years of each director and each person nominated or chosen to become a director or officer, and the name and principal business of any corporation or other organization in which the occupations and employment were carried on.

D. Directorships. Indicate other directorships held by each director or person nominated or chosen to become a director.

E. Involvement in Certain Legal Proceedings. Describe any legal proceedings that have occurred during the past 5 years or which are pending that are material to an evaluation of the ability or integrity of any director or nominee for director or officer of the issuer.

F. Describe any of the following relationships that exist:

(1) If the nominee or director is, or has within the last 2 full fiscal years been, an officer, director, or employee of, or owns, or has within the last 2 fiscal years owned, directly or indirectly, an equity interest in, any firm, corporation, or other business in excess of a 1 percent:

(a) That has made payments to the issuer or its subsidiaries during the issuer's last full fiscal year, or that proposes to make payments to the issuer or its subsidiaries during the current fiscal year, in excess of 1 percent of the issuer's consolidated gross revenues for its last full fiscal year;

(b) To which the issuer or its subsidiaries were indebted at any time during the issuer's last fiscal year in an aggregate amount in excess of 1 percent of the issuer's total consolidated assets at the end of the fiscal year;

(c) To which the issuer or its subsidiaries have made payments during the entity's last fiscal year, or to which the issuer or its subsidiaries propose to make payments during the entity's current fiscal year, in excess of 1 percent of the entity's consolidated gross revenues for its last full fiscal year;

(d) In order to determine whether payments made or proposed to be made exceed 1 percent of the consolidated gross revenues of any entity other than the issuer for the entity's last full fiscal year, it is appropriate to rely on information provided by the nominee or director;

(e) In calculating payments for property and services, the following may be excluded:

(i) Payments where the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves the rendering of services as a public utility at rates or charges fixed in conformity with law or governmental authority;

(ii) Payments that arise solely from the ownership of securities of the issuer, and no extra or special benefit not shared on a pro rata basis by all holders of the class of securities is received;

(f) In calculating indebtedness for purposes of §F(1)(b) above, debt securities that have been publicly offered, admitted to trading on a national securities exchange, or quoted on the automated quotation system of a registered securities association may be excluded;

(2) The nominee or director is a member or employee of, or is associated with, a law firm which the issuer has retained in the last 2 full fiscal years or proposes to retain in the current fiscal year where fees paid or anticipated to be paid by the issuer are material to either the law firm, the issuer, or both;

(3) The nominee or director is a director, partner, officer, or employee of any investment banking firm that has performed services for the issuer, other than as a participating underwriter in a syndicate in the last 2 full fiscal years or which the issuer proposes to have perform services in the current year; or

(4) The nominee or director is a control person of the issuer (other than solely as a director of the issuer).

G. Committees.

(1) State whether or not the issuer has standing audit, nominating, and compensation committees of the board of directors, or committees performing similar functions. If the issuer has these committees, however designated, identify each committee member, state the number of committee meetings held by each committee during the last fiscal year, and describe briefly the functions performed by the committees.

(2) If the issuer has a nominating or similar committee, state whether the committee will consider nominees recommended by shareholders. If so, describe the procedures to be followed by shareholders in submitting the recommendations.

H. State the total number of meetings of the board of directors (including regularly scheduled and special meetings) that were held during the last full fiscal year. Name each incumbent director who, during the last full fiscal year, attended fewer than 75 percent of the aggregate of:

(1) The total number of meetings of the board of directors (held during the period for which he has been a director); and

(2) The total number of meetings held by all committees of the board on which he served (during the periods that he served).

I. If a director has resigned or declined to stand for reelection to the board of directors since the date of the last annual meeting of shareholders because of a disagreement with the issuer on any matter relating to the issuer's operations, policies, or practices, and if the director has furnished the issuer with a letter describing that disagreement and requesting that the matter be disclosed, the issuer shall state the date of resignation or declination to stand for reelection and summarize the director's description of the disagreement. If the issuer believes that the description provided by the director is incorrect or incomplete, it may include a brief statement presenting its views of the disagreement.

J. Classes of Voting Stock.

(1) With respect to those classes of voting stock that participated in the election of directors at the most recent meeting where directors were elected:

(a) State the percentage of shares present at the meeting and voting or withholding authority to vote in the election of directors; and

(b) Disclose, in tabular format, the percentage of total shares cast for and withheld from the vote for or, if applicable, cast against, each nominee, which, respectively, were voted for and withheld from the vote for, or voted against, the nominee.

(2) When groups of classes or series of classes vote together in the election of a director or directors, they shall be treated as a single class for the purpose of §J(1)(b).

K. Instructions.

(1) Calculate the percentage of shares present at the meeting and voting or withholding authority to vote in the election of directors, referred to in §J(1)(a), by dividing the total shares cast for and withheld from the vote for or, if applicable, voted against, the director for whom the highest aggregate number of shares was cast by the total number of shares outstanding that were eligible to vote as of the record date for the meeting.

(2) No information need be given in response to Item 6J unless, with respect to any class of voting stock (or group of classes which voted together), 5 percent or more of the total shares cast for and withheld from the votes for or, if applicable, cast against any nominee were withheld from the vote for or cast against the nominee.

(3) If an issuer elects less than the entire board of directors annually, disclosure is required for all directors if 5 percent or more of the total shares cast for and withheld from, the vote for or, if applicable, cast against an incumbent director were withheld from, or cast against, the vote for the director at the meeting where the person was most recently elected.

(4) No information shall be given in response to Item 6J if the issuer has previously furnished to its security holders a report of the results of the most recent meeting of security holders where directors were elected which includes:

(a) A description of each matter voted upon at the meeting and a statement of the percentage of the shares voting that were voted for and against each matter; and

(b) The information that would be called for by this Item 6J.

(5) If an issuer has previously furnished the results to its security holders, this fact should be stated in a letter accompanying the filing of preliminary proxy materials with the Commissioner.

Item 7. Remuneration of Directors and Officers.

Furnish the following information if action is to be taken concerning:(i) the election of directors; (ii) any bonus, profit sharing or other remuneration plan, contract, or arrangement that a director, nominee for election as a director, or officer of the issuer will participate; (iii) a pension or retirement plan where a person will participate; or (iv) the granting or extension to a person of any options, warrants, or rights to purchase securities, other than warrants or rights issued to security holders on a pro rata basis. If the solicitation is made on behalf of persons other than the issuer, the information required need be furnished only as to nominees of the person making the solicitation and associates of the nominees.

A. Current Remuneration. Furnish the information required in the table below, in substantially the tabular form specified, concerning all remuneration of the following persons and groups for services in all capacities to the issuer and its subsidiaries during the issuer's last fiscal year or, in specified instances, certain prior fiscal years:

(1) Five Officers or Directors. Name each of the five most highly compensated officers or directors of the issuer who have a total remuneration required to be disclosed in Columns C-1 and C-2 below that would exceed $50,000.

(2) All Officers or Directors. All officers and directors of the issuer as a group, stating the number of persons in the group without naming them.

(3) Specified Tabular Format.

| (A) | (B) | (C) | (D) | | | --- | --- | --- | --- | --- | | Name of individual or number of persons in groups | Capacities in which served | Cash and cash equivalent forms of remuneration | Aggregate of contingent forms of remuneration | | | | | (C-1) Salaries, fees, directors' fees, commissions, and bonuses | (C-2) Securities of property, insurance benefits or reimbursements, personal benefits | |

(4) Information to be Included. Columns C-1, C-2, and D of the table should contain with respect to each person or group of persons specified in §A(1) and A(2) of this Item 7 a dollar amount that reflects the total of all items of remuneration described in the heading to that column including, but not necessarily limited to, those items set forth in the subparagraphs of that column.

| COLUMN C Include all cash and cash equivalent forms of remuneration received during the fiscal year and all amounts accrued during the fiscal year which, with reasonable certainty, will be distributed or vested in the future. | COLUMN D Include all contingent forms of remuneration, vesting and measurement of which is subject to future events. Report only amounts relating to the latest fiscal year, not amounts accrued in previous periods. | | | --- | --- | --- | | COLUMN C-1 Salaries, Bonuses, Fees, and Commissions | COLUMN C-2 Securities, Property, Insurance Benefits or Reimbursements, Personal Benefits | | | 1. All cash remuneration distributed or accrued in the form of salaries, commissions, bonuses and fees for services rendered. 2. Compensation earned for services performed in the latest fiscal year even if it is deferred for future payment. 3. Payments received in the latest fiscal year but earned in prior years that were deferred until the latest year, if the amounts were not shown in an earlier proxy statement or annual report to stockholders. | 1. Spread between the acquisition price, if any, and fair market price of securities or property acquired under any contract, plan, or arrangement. 2. Cost of any life insurance premiums, health insurance premiums, and medical reimbursement plans. Premiums for nondiscriminatory plans generally available to all salaried employees are excluded. 3. Personal benefits (perquisites) not directly related to job performance, excluding benefits provided on a nondiscriminatory basis, valued on the basis of cost to the issuer of providing the benefits. a. If unreasonable effort or expense is required to determine the amounts of personal benefits, they may be omitted if their aggregate value does not exceed $10,000 for each officer. b. If the amount of personal benefits exceed 10 percent of the total remuneration or $25,000, which- ever is less, the amount and a brief description of the benefits shall be disclosed in a footnote. 4. Vested company contributions to thrift, profit sharing, pension stock purchase, and similar plans. | 1. Amount expensed for financial reporting purposes representing non-vested contributions, payments, or accruals under any pension or retirement plans, annuities, or employment contracts deferred compensation plans including IRS qualified plans, unless the amount for the individual cannot be separated, in which case a footnote is required indicating the percentage that contributions to the plan bear to participants' total remuneration. 2. The amount expensed for financial reporting purposes under any incentive plans (long-term income plans), such as stock appreciation rights, stock options, or performance share plans, when payout is based on objective standards or stock values. In subsequent years, if the corporation credits compensation expense for financial reporting purposes as a result of a decline in the value of contingent compensation, Column D may be reduced by a corresponding amount. A footnote explaining the action should be included. 3. The amount expensed for financial reporting purposes for any nonvested contribution payment or accrual to stock purchase plans, profit sharing, and thrift plans whether or not they are qualified under the Internal Revenue Code. |

(5) Transactions with Third Parties. Item 7A, among other things, includes transactions between the issuer and a third party when the primary purpose of the transaction is to furnish remuneration to the persons specified in Item 7A. Other transactions between the issuer and third parties in which persons specified in Item 7A have an interest, or may realize a benefit, generally are addressed by other disclosure requirements concerning the interest of management and others in certain transactions. Item 7A does not require disclosure of remuneration paid to a partnership in which any officer or director was a partner; these transactions should be disclosed pursuant to these other disclosure requirements, and not as a note to the remuneration table presented pursuant to Item 7A.

(6) Other Permitted Disclosure. The issuer may provide additional disclosure through a footnote to the table, through additional columns or otherwise, describing the components of aggregate remuneration in greater detail as is appropriate.

B. Proposed Remuneration.

(1) Briefly describe all remuneration payments proposed to be made in the future, pursuant to any existing plan or arrangement to the persons and groups specified in Item 7A. As to defined benefit or actuarial plans with respect to amounts not included in the table, include a separate table showing the estimated annual benefits payable upon retirement to persons in specified remuneration and years-of-service classifications.

(2) Information does not need to be furnished with respect to any group life, health, hospitalization, or medical reimbursement plans that do not discriminate in favor of officers or directors of the issuer and that are available generally to all salaried employees.

C. Remuneration of Directors. Describe any standard or special arrangements, stating amounts, by which directors of the issuer are compensated for services as a director.

D. Options, Warrants, or Rights.

(1) Furnish the information required by the following table for all options to purchase securities from the issuer or its subsidiaries that were granted to or exercised by the persons and groups specified in Item 7A since the beginning of the issuer's last fiscal year, and as to all options held by these persons as of the latest practicable date.

The following tabulation shows as to certain directors and officers, and as to all directors and officers as a group:

(a) The amount of options granted since the beginning of the issuer's last full fiscal year;

(b) The amount of shares acquired since that date through the exercise of options;

(d) The amount of shares subject to all unexercised options held as of the most recent practicable date.

| Title of Securities | Name | Name | Name | All directors and officers as a group | | --- | --- | --- | --- | --- | | Granted-20[ ] to date: | | | | | | Number of shares | | | | | | Average per share option price | $ | $ | $ | | | Exercised-20[ ] to date: | | | | | | Number of shares | | | | | | Aggregate option price of options exercised | $ | $ | $ | | | Aggregate market value of shares on date options exercised | $ | $ | $ | | | Sales-20[ ] to date: | | | | | | Number of shares | | | | | | Unexercised at 20[ ]: | | | | | | Number of shares | | | | | | Average per share option price | $ | $ | $ | |

In addition, during the period employees were granted options for shares at an average price per share of $ .

1 Sales by directors and officers who exercised options during the period 20[ ] to date.

Instructions:

(1) All figures should be adjusted, if applicable, in accordance with the terms of the options to reflect stock splits and to give effect to share dividends.

(2) Other tabular presentations are acceptable if they include the necessary data. Tabular presentation may not be needed if only a very few options have been granted.

(3) Total Market Value.

(a) If the total market value on the granting dates of the securities called for by all options granted during the period specified does not exceed $10,000 for any officer or director named in answer to Item 7A, or $40,000 for all officers and directors as a group, this item need not be answered with respect to options granted to a person or group.

(b) If the total market value on the dates of purchase of all securities purchased through the exercise of options during the period specified does not exceed $10,000 for a person or $40,000 for a group, this item does not need to be answered with respect to options exercised by a person or group.

(c) If the total market value as of the latest practicable date of the securities called for by all options held at the time does not exceed $10,000 for a person or $40,000 for a group, this item does not need to be answered with respect to options held as of the specified date by a person or group.

(d) The term “options”, as used in §D includes all options, warrants, or rights, other than those issued to security holders as such on a pro rata basis. If the average option price per share is called for, the weighted average price per share shall be given.

(e) The extension, regranting, or material amendment of options shall be considered the granting of options within the meaning of this subsection.

(f) If the options relate to more than one class of securities, the information shall be given separately for each class.

E. Indebtedness of Management.

(1) State for each director or officer of the issuer, each nominee for election as a director, and each associate of a director, officer, or nominee who was indebted to the issuer or its subsidiaries at any time since the beginning of the last fiscal year of the registrant:

(a) The largest aggregate amount of indebtedness outstanding at any time during the period;

(b) The nature of the indebtedness outstanding and the transaction in which it was incurred;

(d) The rate of interest paid or charged.

(2) Section E does not apply to:

(a) Any person whose aggregate indebtedness did not exceed $10,000 or 1 percent of the issuer's total assets, whichever is less, at any time during the period specified; or

(b) Indebtedness under an insurance policy.

F. Transactions with Management.

(1) Describe briefly any transaction since the beginning of the issuer's last fiscal year, or any presently proposed transactions, to which the issuer or any of its subsidiaries was or is to be a party, in which any of the following persons had or is to have a direct or indirect material interest, naming the person and stating the relationship to the issuer, the nature of the interest in the transaction, and, if practicable, the amount of the interest:

(a) A director of officer of the issuer;

(b) A nominee for election as a director;

(c) A security holder who is known to the issuer to own of record or beneficially more than 10 percent of any class of the issuer's voting securities; and

(d) A relative or spouse of any of the foregoing persons, or any relative of the spouse, who has the same home as the person or who is a director or officer of a parent or subsidiary of the issuer.

(2) Also, describe briefly any material legal proceedings in which a person is an adverse party to the issuer or any of its subsidiaries, or has an adverse material interest to the issuer or any of its subsidiaries.

(3) Information does not need to be given in response to this Item 7F as to any remuneration or other transaction reported in response to Item 7A, B, C, D, or E, or as to any transaction with respect to which information may be omitted pursuant to these items.

(4) Information does not need to be given in answer to this Item 7F for any transaction where:

(a) The rates or charges involved in the transaction are determined by competitive bids, or at rates or charges fixed in conformity with law or governmental authority;

(b) The transaction involves services as a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar services;

(c) The amount involved in the transaction or series of similar transactions, including all periodic installments in the case of any lease or other agreement providing for periodic payments or installments, does not exceed $40,000; or

(d) The interest of the specified person arises solely from the ownership of securities of the issuer, and the specified person receives no extra or special benefit not shared on a pro rata basis by all holders of securities of the class.

(5) It should be noted that this item calls for disclosure of indirect, as well as direct, material interests in transactions. A person who has a position or relationship with a firm, corporation, or other entity, that engages in a transaction with the issuer or its subsidiaries, may have an indirect interest in the transaction by reason of the position or relationship. However, a person shall be considered not to have a material indirect interest in a transaction within the meaning of this Item 7F if:

(a) The interest arises only from:

(i) The person's position as a director of another corporation or organization (other than a partnership) which is a party to the transaction;

(ii) The direct or indirect ownership by the person and all other persons specified in Item 7F of less than a 10 percent equity interest in another person (other than a partnership) which is a party to the transaction; or

(iii) Both the position and ownership;

(b) The interest arises only from the person's position as a limited partner in a partnership in which the person and all other persons specified in Item 7F had an interest of less than 10 percent; or

(c) The interest of the person arises solely from the holding of an equity interest (including a limited partnership interest but excluding a general partnership interest) or a creditor interest in another person which is a party to the transaction with the issuer or any of its subsidiaries and the transaction is not material to the other person.

Instructions:

(1) In describing any transaction involving the purchase or sale of assets by or to the issuer or any of its subsidiaries, other than in the ordinary course of business, state the cost of the assets to the purchaser and, if acquired by the seller within 2 years before the transaction, the cost to the seller. Indicate the principle followed in determining the issuer's purchase or sale price, and the name of the person making the determination.

(2) Information shall be furnished in answer to this Item with respect to transactions not excluded above which involve remuneration from the issuer or its subsidiaries, directly or indirectly, to any of the specified persons for services in any capacity unless the interest of these persons arises solely from the ownership individually and in the aggregate of less than 10 percent of any class of equity securities of another corporation furnishing the services to the issuer or its subsidiaries.

G. Transactions with Pension or Similar Plans.

(1) Describe briefly any transactions since the beginning of the issuer's last fiscal year, or any presently proposed transactions, to which any pension, retirement, savings, or similar plan provided by the issuer, or any of its parents or subsidiaries, was or is to be a part, in which any of the persons specified in Item 7F or the issuer or any of its subsidiaries had or is to have a direct or indirect material interest naming the person and stating the person's relationship to the issuer, the nature of the person's interest in the transaction and, if practicable, the amount of the interest.

(2) Information does not need to be given in answer to §G(1) with respect to:

(a) Payments to the plan, or payments to beneficiaries, pursuant to the terms of the plan;

(b) Payment of remuneration for services not in excess of 5 percent of the aggregate remuneration received by the specified person during the issuer's last fiscal year from the issuer and its subsidiaries; or

(c) Any interest of the issuer or any of its subsidiaries that arises solely from its general interest in the success of the plan.

Instructions:

(1) Item 7F(3) applies to this Item 7G.

(2) Without limiting the general meaning of the term “transaction”, there shall be included in the answer to this item any remuneration received or any loans received or outstanding during the period, or proposed to be received.

Item 8. Matters Related to Accounting.

If the solicitation is made on behalf of the issuer and relates to an annual meeting of security holders at which directors are to be elected, or financial statements are included, furnish the following information:

A. State if the issuer's financial statements are not certified by independent public or certified accountants.

B. State if the board of directors has no audit or similar committee.

C. If the issuer's financial statements are certified by independent public or certified accountants, state that fact and provide the following information:

(1) The name of the principal accountant selected or being recommended to shareholders for election, approval, or ratification for the current year. If no accountant has been elected or recommended, so state and briefly describe the reasons.

(2) The name of the principal accountant for the fiscal year most recently completed if different from the accountant selected or recommended for the current year, or if no accountant has been elected or recommended for the current year.

(3) State if a change or changes in accountants have taken place since the date of the proxy statement for the most recent annual meeting of shareholders. If, in connection with the change, a material disagreement in connection with financial disclosure between the accountant and issuer has occurred, the disagreement shall be described. Before filing the preliminary proxy materials with the Commissioner that contain or amend the description, the issuer shall furnish the description of the disagreement to an accountant with whom the disagreement has occurred. If that accountant believes that the description of the disagreement is incorrect or incomplete, the accountant may include a brief statement, not to exceed 200 words, in the proxy statement presenting the accountant's view of the disagreement. This statement shall be submitted to the issuer within 10 business days of the date the accountant receives the issuer's descriptions.

(4) The proxy statement shall indicate whether or not representatives of the principal accountants for the current year and for the most recently completed fiscal year are expected to be present at the stockholders' meeting with the opportunity to make a statement if they desire to do so and whether or not the representatives are expected to be available to respond to appropriate questions.

(5) If a change in accountants has taken place since the date of the proxy statement for the most recent annual meeting of shareholders, state whether the change was recommended or approved by:

(a) An audit or similar committee of the board of directors, if the issuer has this committee; or

(b) The board of directors, if the issuer has no committee.

D. For the fiscal year most recently completed, describe each professional service provided by the principal accountant, state the percentage relationship that the aggregate of the fees for all nonaudit services bear to the audit fees, and, except as provided below, state the percentage relationship that the fee for each nonaudit service bears to the audit fees. Indicate whether, before each professional service provided by the principal accountant was rendered, it was approved by, and the possible effect on the independence of the accountant was considered by:

(1) An audit or similar committee of the board of directors; and

(2) The board of directors for a service not approved by an audit or similar committee.

Instructions:

(1) For purposes of this section, all fees for services provided in connection with the audit function (for example, reviews of quarterly reports) may be computed as part of the audit fees. Indicate which services are reflected in the audit fees computation.

(2) If the fee for any non-audit service is less than 3 percent of the audit fees, the percentage relationship does not need to be disclosed.

(3) Each service should be specifically described. Broad general categories such as “tax matters” or “management advisory services” are not sufficiently specific.

(4) Describe the circumstances and give details of any services provided by the issuer's independent accountant during the latest fiscal year that were furnished at rates or terms that were not customary.

(5) Describe any existing direct or indirect understanding or agreement that places a limit on current or future years' audit fees, including fee arrangements that provide fixed limits on fees that are not subject to reconsideration if unexpected issues involving accounting or auditing are encountered. Disclosure of fee estimates is not required.

Item 9. Bonus, Profit Sharing, and Other Remuneration Plans: Pension and Retirement Plans.

If action is to be taken with respect to any bonus, profit sharing, or other remuneration plan, or any pension or retirement plan, furnish the following information:

A. Describe briefly the material features of the plan, identify each class of persons who will participate, indicate the approximate number of persons in each class, and state the basis of the participation;

B. Furnish the information, in addition to that required by this item and Item 7, as may be necessary to describe adequately the provisions already made pursuant to all bonus, profit sharing, pension, retirement, stock option, stock purchase, deferred compensation, or other remuneration or incentive plans, now in effect or in effect within the past 5 years, for:

(1) Each director or officer named in answer to Item 7A who may participate in the plan to be acted upon;

(2) All present directors and officers of the issuer as a group, if any director or officer may participate in the plan; and

(3) All employees, if employees may participate in the plan;

C. If the plan to be acted upon can be amended otherwise than by a vote of stockholders, to increase the cost to the issuer or to alter the allocation of the benefits as between the directors and officers on the one hand and employees on the other, state the nature of the amendments which can be made;

D. With regard to any bonus, profit sharing, or other remuneration plan, on which action is to be taken, furnish the following information:

(1) State separately the amounts which would have been distributable under the plan during the last fiscal year of the issuer:

(a) To directors and officers; and

(b) To employees if the plan had been in effect;

(2) State the name and position with the issuer of each person specified in Item 7A who will participate in the plan and the amount each person would have received under the plan for the last fiscal year of the issuer if the plan had been in effect;

E. With regard to any pension or retirement plan on which action is to be taken, furnish the following information:

(1) State:

(a) The approximate total amount necessary to fund the plan with respect to past services, the period over which the amount is to be paid, and the estimated annual payments necessary to pay the total amount over the period;

(b) The estimated annual payment to be made with respect to current services; and

(i) Directors and officers, and

(ii) Employees;

(2) State:

(a) The name and position with the issuer of each person specified in Item 7A who will be entitled to participate in the plan;

(b) The amount which would have been paid or set aside by the issuer and its subsidiaries for the benefit of the person for the last fiscal year of the issuer if the plan had been in effect; and

(c) The amount of the annual benefits estimated to be payable to the person in the event of retirement at normal retirement date.

Instructions:

(1) If action is to be taken with respect to the amendment or modification of an existing plan, the item shall be answered with respect to the plan as proposed to be amended or modified and shall indicate any material differences from the existing plan.

(2) The following instruction applies to §B:

(a) Information need only be given with respect to benefits received or set aside within the past 5 years.

(b) Information does not need to be included as to payments made for, or benefits to be received from, group life or accident insurance, group hospitalization, or similar group payments or benefits.

(c) If action is to be taken with respect to any plan in which directors or officers may participate, the information called for by Item 7D shall be furnished for the last 5 fiscal years of the issuer and any period after the end of the latest fiscal year, in aggregate amounts for the entire period for each person and group. If any named person, or any other director or officer, purchased securities through the exercise of options during the period, state the aggregate amount of securities of that class sold during the period by the named person, and by the named person and other directors and officers as a group. The information called for by this instruction is in lieu of the information since the beginning of the issuer's last fiscal year called for by Item 7D. If employees may participate in the plan to be acted upon, state the aggregate amount of securities called for by all options granted to employees during the 5-year period and, if the options were other than “restricted” or “qualified” stock options or options granted pursuant to an “employee stock purchase plan,” as the quoted terms are defined in Sections 422 through 424 of the Internal Revenue Code, state that fact and the weighted average option price per share. The information called for by this instruction may be furnished in the form of the table set forth in Item 7D.

(3) If the plan to be acted upon is set forth in a written document, three copies shall be filed with the Commissioner at the time preliminary copies of the proxy statement and form of proxy are filed.

(4) The information called for by §E(1)(c) or (2)(b) of Item 9 does not need to be given as to payments made on an actuarial basis pursuant to any group pension plan that provides for fixed benefits in the event of retirement at a specified age or after a specified number of years of service.

Item 10. Options, Warrants, or Rights.

If action is to be taken with respect to the granting or extension of any options to purchase securities of the issuer or any subsidiary, furnish the following information:

A. State:

(1) The title and amount of securities called for or to be called for by the options;

(2) The prices, expiration dates, and other material conditions upon which the options may be exercised;

(3) The consideration received or to be received by the issuer or subsidiary for the granting or extension of the options;

(4) The market value of the securities called for or to be called for by the options as of the latest practicable date; and

(5) In the case of options, the federal income tax consequences of the issuance and exercise of the option to the recipient and to the issuer;

B. State:

(1) Separately the amount of options received or to be received by the following persons, naming each person:

(a) Each director or officer named in answer to Item 7A;

(b) Each nominee for election as a director of the issuer;

(d) Each other person who received or is to receive 10 percent or more of the options;

(2) The total amount of the options received or to be received by all directors and officers of the issuer as a group, without naming them;

C. Furnish the information, in addition to that required by this item and Item 7, necessary to describe adequately the provisions already made pursuant to all bonus, profit sharing, pension, retirement, stock option, stock purchase, deferred compensation, or other remuneration or incentive plans, now in effect or in effect within the past 5 years, for:

(1) Each director or officer named in answer to Item 7A who may participate in the plan to be acted upon;

(2) All present directors and officers of the issuer as a group, if any director or officer may participate in the plan; and

(3) All employees, if employees may participate in the plan.

Instructions:

(1) For the purpose of this Item 10, the term option includes any option, warrant, or right.

(2) Sections B and C do not apply to warrants or rights to be issued to security holders on a pro rata basis.

(3) Instruction 2 to Item 9 also applies to §C of this item.

(4) If the options described in answer to this item are issued pursuant to a plan which is set forth in a written document, three copies shall be filed with the Commissioner at the time preliminary copies of the proxy statement and form of proxy are filed.

Item 11. Authorization or Issuance of Securities Otherwise than for Exchange.

If action is to be taken with respect to the authorization or issuance of any securities otherwise than for exchange for outstanding securities of the issuer, furnish the following information:

A. State the title and amount of securities to be authorized or issued;

B. If the securities are other than additional shares of common stock of a class outstanding, furnish a brief summary of the following, if applicable: dividend, voting, liquidation, preemptive and conversion rights, redemption and sinking fund provisions, interest rate, and date of maturity;

C. Describe briefly the transaction in which the securities are to be issued, including a statement as to:

(1) The nature and approximate amount of consideration received or to be received by the issuer; and

(2) The approximate amount devoted to each purpose, as far as is determinable, for which the net proceeds have been or are to be used;

D. If it is impracticable to describe the transaction in which the securities are to be issued, state the reason, indicate the purpose of the authorization of the securities, and state whether further authorization for the issuance of the securities by a vote of security holders will be solicited before issuance;

E. If the securities are to be issued otherwise than in a general public offering for cash, state the reasons for the proposed authorization or issuance and the general effect upon the rights of existing security holders.

Item 12. Modification or Exchange of Securities.

If action is to be taken with respect to the modification of any class of securities of the issuer, or the issuance or authorization for issuance of securities of the issuer in exchange for outstanding securities of the issuer, furnish the following information:

A. If outstanding securities are to be modified, state the title and amount. If securities are to be issued in exchange for outstanding securities, state the title and amount of securities to be so issued, the title and amount of outstanding securities to be exchanged, and the basis of the exchange.

B. Describe any material differences between the outstanding securities and the modified or new securities.

C. State the reasons for the proposed modification or exchange and the general effect upon the rights of existing security holders.

D. Furnish a brief statement as to arrears in dividends or as to defaults in principal or interest with respect to the outstanding securities which are to be modified or exchanged and furnish other information appropriate in the particular case to disclose adequately the nature and effect of the proposed action.

E. Outline briefly any other material features of the proposed modification or exchange. If the plan of proposed action is set forth in a written document, file copies it with the Commissioner at the time the preliminary proxy material is filed.

Item 13. Mergers, Consolidations, Acquisitions, and Similar Matters.

Furnish the following information if action is to be taken with respect to any plan for:(i) the merger or consolidation of the issuer into or with another person or of another person into or with the issuer; (ii) the acquisition by the issuer or any of its security holders of securities of another issuer; (iii) the acquisition by the issuer of another going business or of its assets; (iv) the sale or other transfer of all or any substantial part of the assets of the issuer; or (v) the liquidation or dissolution of the issuer:

A. Outline briefly the material features of the plan. State the reasons for the plan and the general effect of the plan upon the rights of existing security holders. If the plan is set forth in a written document, file three copies with the Commissioner at the time preliminary copies of the proxy statement and form of proxy are filed.

B. Furnish the following information as to the issuer and each person which is to be merged into the issuer, or into or with which the issuer is to be merged or consolidated, or the business or assets that are to be acquired, or which is the issuer of securities to be acquired by the issuer in exchange for all or a substantial part of its assets or to be acquired by security holders of the issuer. What is required is information essential to an investor's appraisal of the action proposed to be taken.

(1) Describe briefly the business of the person.

(2) State the location and describe the general character of the plants and other important physical properties of the person. The description is to be given from an economic and business standpoint, as distinguished from a legal standpoint. Portfolio or investment assets of an insurer do not need to be disclosed.

(3) Furnish a brief statement as to dividends in arrears or defaults in principal or interest in respect of any securities of the issuer or of the person, and as to the effect of the plan on the issuer and the person and other information as may be appropriate in the particular case to disclose adequately the nature and effect of the proposed action.

(4) Furnish a tabulation in columnar form showing the existing and the pro forma capitalization.

(5) Furnish in columnar form for each of the last 5 fiscal years a historical summary of earnings, and show per share amounts of net earnings, dividends declared for each year, and book value per share at the end of the latest period.

(6) Furnish in columnar form for each of the last 5 fiscal years a combined pro forma summary of earnings, as appropriate in the circumstances, indicating the aggregate and pre-share earnings for each year and the pro forma book value per share at the end of the latest period. If the transaction establishes a new basis of accounting for assets of any of the persons included, the pro forma summary of earnings shall be furnished only for the most recent fiscal year and interim period, and shall reflect appropriate pro forma adjustments resulting from the new basis of accounting.

(7) To the extent material for the exercise of prudent judgment in regard to the matter to be acted upon, furnish the historical and pro forma earnings data specified in §B(5) and (6) above for interim periods of the current and prior fiscal years, if available. Instructions: §B of this Item 13 does not apply if the plan described in answer to §A involves only the issuer and one or more of its totally held subsidiaries.

C. As to each class of securities of the issuer, or of any person specified in §B, which is admitted to dealing on a national securities exchange or with respect to which a market otherwise exists, and that will be materially affected by the plan, state the high and low sale prices (or, in the absence of trading in a particular period, the range of the bid and asked prices) for each quarterly period within 2 years. This information may be omitted if the plan involves merely the liquidation or dissolution of the issuer.

Item 14. Financial Statements.

A. If action is to be taken with respect to any matter specified in Items 11, 12, or 13, furnish financial statements of the issuer and its subsidiaries complying with the requirements of Regulation .04B(1), (2) and (3) of the chapter, including schedules of supplementary profit and loss information. The statements may be omitted with respect to a plan described in answer to Item 13 if the plan involves only the issuer and one or more of its totally held subsidiaries.

B. If action is to be taken with respect to any matter specified in Item 13B, furnish for each person specified, other than the issuer, financial statements complying with the requirements of Regulation .04B(1), (2), and (3) of the chapter.

C. The Commissioner may, upon the request of the issuer, permit the omission of any of the statements required where the statements are not necessary for the exercise of prudent judgment in regard to any matter to be acted upon, or may permit the filing in substitution of appropriate statements of comparable character. The Commissioner may also require the filing of other statements in addition to, or in substitution for, the statements required in any case where the statements are necessary or appropriate for an adequate presentation of the financial condition of any person whose financial statements are required, or whose statements are otherwise material for the exercise of prudent judgment in regard to any matter to be acted upon. In the usual case, financial statements are considered material to the exercise of prudent judgment where the matter to be acted upon is authorization or issuance of a material amount of senior securities, but are not considered material where the matter to be acted upon is the authorization or issuance of common stock, otherwise than in an exchange, merger or consolidation, acquisition, or similar transaction.

D. The proxy statement may incorporate by reference any financial statements contained in an annual report sent to security holders with respect to the same meeting as that to which the proxy statement relates, if the financial statements substantially meet the requirements of this item.

Item 15. Acquisition or Disposition of Property.

If action is to be taken with respect to the acquisition or disposition of any property, furnish the following information:

A. Describe briefly the general character and location of the property.

B. State the nature and amount of consideration to be paid or received by the issuer or any subsidiary. To the extent practicable, outline briefly the facts bearing upon the question of the fairness of the consideration.

C. State the name and address of the transferor or transferee, as the case may be, and the nature of any material relationship of the person to the issuer or an affiliate of the issuer.

D. Outline briefly any other material features of the contract or transaction.

Item 16. Restatement of Accounts.

If action is to be taken with respect to the restatement of any asset, capital, or surplus account of the issuer, furnish the following information:

A. State the nature of the restatement and the date as of which it is to be effective.

B. Outline briefly the reasons for the restatement and for the selection of the particular effective date.

C. State the name and amount of each account (including any reserve accounts) affected by the restatement and the effect of the restatement on the account. Tabular presentation of the amounts shall be made when appropriate, particularly in the case of recapitalizations.

D. To the extent practicable, state whether and the extent, if any, to which the restatement will, as of the date of the restatement, alter the amount available for distribution to the holders of equity securities.

Item 17. Action with Respect to Reports.

If action is to be taken with respect to any report of the issuer, or of its directors, officers, or committees, or any minutes of meetings of its stockholders, furnish the following information:

A. State whether or not the action is to constitute approval or disapproval of any of the matters referred to in the reports or minutes;

B. Identify each of the matters which it is intended will be approved or disapproved, and furnish the information required by the appropriate item or items of this schedule with respect to each matter.

Item 18. Matters Not Required to be Submitted.

If action is to be taken with respect to any matter which is not required to be submitted to a vote of security holders, state the nature of the matter, the reasons for submitting it to a vote of security holders, and what action is intended to be taken by the management in the event of a negative vote on the matter by the security holders.

Item 19. Amendment of Charter, Bylaws, or Other Documents.

If action is to be taken with respect to any amendment of the issuer's charter, bylaws, or other documents as to which information is not required above, state briefly the reasons for, and general effect of, the amendment. If the matter to be acted upon is the classification of directors, state whether vacancies which occur during the year may be filled by the board of directors to serve only until the next annual meeting or may be so filled for the remainder of the full term.

Item 20. Other Proposed Action.

If action is to be taken with respect to any matter not specifically referred to above describe briefly the substance of each matter in substantially the same degree of detail as is required by Items 5—19.

Item 21. Vote Required for Approval.

As to each matter that is to be submitted to a vote of security holders, other than elections to office or the selection or approval of auditors, state the vote required for its approval.

Cross References

31.04.07.13

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.15 Schedule B.

INFORMATION TO BE INCLUDED IN STATEMENTS FILED BY OR ON BEHALF OF A PARTICIPANT (OTHER THAN THE ISSUER) IN A PROXY SOLICITATION IN AN ELECTION CONTEST

Item 1. Issuer.

State the name and address of the Issuer.

Item 2. Identity and Background.

A. State the following:

(1) Your name and business address;

(2) Your present principal occupation or employment and the name, principal business, and address of any corporation or other organization in which the employment is carried on.

B. State the following:

(1) Your residence address;

(2) Information as to all material occupations, positions, offices, or employments during the last 10 years, giving starting and ending dates of each and the name, principal business and address of any business corporation, or other business organization in which each occupation, position, office, or employment was carried on.

C. State whether or not you are or have been a participant in any other proxy contest involving this company or other companies within the past 10 years. If so, identify the principals, the subject matter, and your relationship to the parties, and the outcome.

D. State whether or not, during the past 10 years, you have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case. A negative answer to this subitem does not need to be included in the proxy statement or other proxy soliciting material.

Item 3. Interest in Securities of the Issuer.

A. State the amount of each class of securities of the issuer that you own beneficially, directly or indirectly.

B. State the amount of each class of securities of the issuer that you own of record but not beneficially.

C. State, with respect to all securities of the issuer purchased or sold within the past 2 years, the dates when they were purchased or sold, and the amount purchased or sold on each date.

D. State if any part of the purchase price or market value of any of the securities specified in §C is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding securities. Indicate the amount of the indebtedness as of the latest practicable date. If funds were borrowed or obtained otherwise than pursuant to a margin account or bank loan in the regular course of business of a bank, broker, or dealer, briefly describe the transaction and state the names of the parties.

E. State whether or not you are a party to any contracts, arrangements, or understandings with any person with respect to any securities of the issuer including but not limited to joint ventures, loan or option arrangements, puts or calls guarantees against losses or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. If so, name the persons with whom some contracts, arrangements, or understandings exist, and give the details of it.

F. State the amount of securities of the issuer owned beneficially, directly or indirectly, by each of your associates, and the name and address of each associate.

G. State the amount of each class of securities of any parent, subsidiary, or affiliate of the issuer that you own beneficially, directly or indirectly.

Item 4. Further Matters.

A. Describe the time and circumstances under which you became a participant in the solicitation, and state the nature and extent of your activities or proposed activities as a participant.

B. Describe briefly, and if practicable state the approximate amount of any material interest, direct or indirect, of yourself and of each of your associates in any material transactions since the beginning of the company's last fiscal year, or in any material proposed transactions, to which the company or any of its subsidiaries or affiliates was or is to be a party.

C. Arrangement or Understanding.

(1) State whether or not you or any of your associates have any arrangement or understanding with any person:

(a) With respect to any future employment by the issuer or its subsidiaries or affiliates; or

(b) With respect to any future transactions to which the issuer or any of its subsidiaries or affiliates will or may be a party.

(2) If so, describe the arrangement or understanding, and state the names of the parties.

Item 5. Signature.

The statement shall be dated and signed in the following manner:

I certify that the statements made in this statement are true, complete, and correct to the best of my knowledge and belief.

(Date)

(Signature of participant or authorized representative)

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

COMAR 31.04.07.16 Schedule C.

INFORMATION REQUIRED IN INFORMATION STATEMENT

Note: Where any item, other than Item 5, calls for information with respect to any matter to be acted upon at the meeting, the item need be answered only with respect to proposals to be made by the issuer.

Item 1. Information Required by Items of Schedule 14A.

Furnish the information called for by all of the items of Schedule A (other than Items 1, 3, and 4) that would be applicable to any matter to be acted upon at the meeting if proxies were to be solicited in connection with the meeting.

Item 2. Statement That Proxies Are Not Solicited.

The following statement shall be set forth on the first page of the information statement in bold face type:

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

Item 3. Date, Time, and Place of Meeting.

State the date, time, and place of the meeting of security holders, unless the information is otherwise disclosed in material furnished to security holders with the information statement.

Item 4. Interest of Certain Persons in or Opposition to Matters to Be Acted Upon.

A. Describe briefly any substantial interest, direct or indirect, by security holdings or otherwise, of each of the following persons in any matter to be acted upon, other than elections to office:

(1) Each person who has been a director or officer of the issuer at any time since the beginning of the last fiscal year;

(2) Each nominee for election as a director of the issuer;

(3) Each associate of the foregoing persons.

B. Give the name of any director of the issuer who has informed the management in writing that he intends to oppose any action to be taken by the management at the meeting, and indicate the action that he intends to oppose.

Item 5. Proposals by Security Holders.

If any security holder entitled to vote at the meeting has, not less than 90 days before the issuer's annual meeting, submitted to the issuer a proposal that is accompanied by notice of the issuer's intention to present the proposal, and indicate the disposition proposed to be made of the proposal by the management at the meeting.

Cross References

31.04.07.01C

31.04.07.13

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective April 30, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.02 to COMAR 31.04.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.13 repealed and new Regulations .01—.16 adopted effective February 12, 2007 (34:3 Md. R. 303)
Authority: Insurance Article, §§2-109, 4-113(a)(7)—(9), and 4-115, Annotated Code of Maryland

31.04.09 Custody Agreements and the Use of Clearing Corporations

COMAR 31.04.09.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Agent.

(a) “Agent” means:

(i) A qualified bank or qualified broker/dealer that maintains an account in its name in a clearing corporation or that is a member of the Federal Reserve System and through which a custodian participates in a clearing corporation; or

(ii) With respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to accept custody of securities.

(b) “Agent” includes a subcustodian.

(2) “Carrier” means:

(a) A domestic insurer;

(b) A nonprofit health service plan;

(d) A health maintenance organization; or

(e) A managed care organization.

(3) Clearing Corporation.

(a) “Clearing corporation” means:

(i) A corporation, as defined in Commercial Law Article, §8-102(a)(5), Annotated Code of Maryland, that is organized for the purpose of effecting transactions in securities by computerized book-entry; or

(b) “Clearing corporation” includes:

(i) Treasury Direct; and

(ii) The Treasury/Reserve Automated Debt Entry System.

(4) “Custodian” means a qualified bank, qualified broker/dealer, or clearing corporation that:

(a) Accepts deposits of securities from carriers; and

(b) Safeguards, holds, and reports on the securities under a written custodial agreement with the carrier.

(5) “Custodied securities” means securities held:

(a) By a custodian or its agent; or

(b) In a clearing corporation.

(6) “Qualified bank” means:

(a) A bank, trust company, or federal home loan bank that:

(i) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by United States banking regulators;

(ii) Is regulated by either state banking laws or is a member of the Federal Reserve System; and

(iii) Is legally qualified to accept custody of securities in accordance with this chapter; or

(b) With respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in the foreign country, a bank or trust company incorporated or organized under the laws of a country other than the United States that:

(i) Is regulated as a bank or trust company by that country's government or an agency of that country's government;

(ii) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by international banking authorities; and

(iii) Is legally qualified to accept custody of securities.

(7) “Qualified broker/dealer” means a securities firm that:

(a) Has a tangible net worth of at least $250,000,000 as evidenced by its most recent audited financial statement;

(b) Is registered with and subject to the jurisdiction of the Securities and Exchange Commission; and

(c) Maintains at all times Securities Investor Protection Corporation excess insurance coverage equal to or greater than the market value of the carriers' securities maintained with the broker/dealer.

(8) “Registered form” has the meaning stated in Commercial Law Article, §8-102(a)(13), Annotated Code of Maryland.

(9) Security.

(a) “Security” has the meaning stated in Commercial Law Article, §8-102(a)(15), Annotated Code of Maryland.

(b) “Security” includes:

(i) A certificated security as defined by Commercial Law Article, §8-102(a)(4), Annotated Code of Maryland; and

(ii) An uncertificated security as defined by Commercial Law Article, §8-102(a)(18), Annotated Code of Maryland.

(10) “Treasury Direct” means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. §301, 12 U.S.C. §391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart C.

(11) “Treasury/Reserve Automated Debt Entry System (TRADES)” means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. §301, 12 U.S.C. §391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart B.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective May 15, 1978
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01—.03 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.16 to COMAR 31.04.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.03, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .01—.04, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)
Administrative History: Regulation .02A amended as an emergency provision effective August 11, 2004 (31:18 Md. R. 1349); amended permanently effective November 8, 2004 (31:22 Md. R. 1598)
Authority: Insurance Article, §§2-109 and 4-115; Health-General Article, §§15-102.3 and 19-728; Annotated Code of Maryland

COMAR 31.04.09.02 Custody Agreement; Filing with Commissioner.

A. Custody Agreement.

(1) A carrier may not register securities in the name of a nominee or deposit securities with a custodian unless the carrier provides for the custody of the securities by entering into a written agreement with the custodian that:

(a) Is filed with the Commissioner pursuant to §B of this regulation; and

(b) Complies with Regulation .03 of this chapter.

(2) The agreement shall be:

(a) In writing; and

(b) Authorized by a resolution of the board of directors of the carrier or of an authorized committee of the board.

(3) The securities may be held:

(a) By the custodian or its agent; or

(b) In a clearing corporation.

B. Filing Agreement with the Commissioner.

(1) A carrier that enters into a written agreement with a custodian shall file the agreement with the Commissioner within 30 days after the execution of the agreement.

(2) If the Commissioner determines that a written agreement filed after execution does not comply with the requirements in Regulation .03 of this chapter, the carrier shall cure the noncompliance within:

(a) 60 days after notification by the Commissioner; or

(b) An extended cure period authorized by the Commissioner.

(3) If the written agreement is not cured within the time allowed by the Commissioner, the Commissioner may:

(a) Take any action authorized by Insurance Article, §4-113, Annotated Code of Maryland; or

(b) Require the carrier to report the securities held by the custodian in accordance with the terms of the noncompliant custody agreement as “Assets—Not Admitted”.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective May 15, 1978
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01—.03 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.16 to COMAR 31.04.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.03, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .01—.04, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)
Administrative History: Regulation .02A amended as an emergency provision effective August 11, 2004 (31:18 Md. R. 1349); amended permanently effective November 8, 2004 (31:22 Md. R. 1598)
Authority: Insurance Article, §§2-109 and 4-115; Health-General Article, §§15-102.3 and 19-728; Annotated Code of Maryland

COMAR 31.04.09.03 Terms of Custody Agreement.

A. The terms of a custody agreement shall comply with the requirements of this regulation.

B. Certificated securities held by the custodian shall be held separate from the securities of the custodian and of all of its other customers.

C. Identification of Securities on Custodian's Records.

(1) Securities held indirectly by the custodian and securities in a clearing corporation shall be separately identified on the custodian's official records as being owned by the carrier.

(2) The records shall identify which custodied securities are held by the custodian or its agent and which securities are in a clearing corporation or in the Federal Reserve book-entry system.

(3) If the securities are in a clearing corporation, the records also shall identify:

(a) Where the securities are;

(b) If in a clearing corporation, the name of the clearing corporation; and

D. All custodied securities that are in registered form shall be registered:

(1) In the name of the carrier or in the name of a nominee of the carrier;

(2) In the name of the custodian or a nominee of the custodian; or

(3) If in a clearing corporation, in the name of the clearing corporation or a nominee of the clearing corporation.

E. Withdrawal of Securities.

(1) Except as provided in §E(2) of this regulation, custodied securities shall be:

(a) Held subject to the instructions of the carrier; and

(b) Withdrawable on demand of the carrier.

(2) Custodied securities used to meet the deposit requirements set forth in Insurance Article, §4-106, Annotated Code of Maryland, shall be under the control of the Commissioner and may not be withdrawn by the carrier without the approval of the Commissioner.

F. The custodian shall:

(1) Send or cause to be sent to the carrier a confirmation of all transfers of custodied securities to or from the account of the carrier; and

(2) Furnish, not less than monthly, the carrier with reports of holdings of custodied securities at times and containing information reasonably requested by the carrier.

G. Provision of Information to the Commissioner.

(1) The custodian shall be authorized and instructed by the carrier to honor any requests made by the Commissioner for information concerning the carrier's custodied securities.

(2) The Commissioner may, from time to time, request, and the custodian shall furnish, a detailed listing of the carrier's custodied securities.

(3) The custodian also shall provide an affidavit certifying the custodian's safekeeping responsibilities relative to the custodied securities.

(4) The custodian's response to a request for information from the Commissioner shall:

(a) Be made directly to the Commissioner; and

(b) Encompass all of the carrier's custodied securities.

H. The custodian and its agents shall send to the carrier:

(1) All reports that they receive from a clearing corporation on their respective systems of internal accounting control; and

(2) Reports prepared by outside auditors on the custodian's or its agent's internal accounting control of custodied securities that the carrier reasonably may request.

I. The custodian shall maintain:

(1) Records sufficient to demonstrate and verify information relating to custodied securities that may be reported in the carrier's annual statement; and

(2) Supporting schedules and information required in an audit of the financial statements of the carrier.

J. On written request from an appropriate officer of the carrier, the custodian shall provide the appropriate affidavits, substantially in a form designated by the Commissioner, with respect to custodied securities.

K. The custodian shall:

(1) Secure and maintain insurance protection at levels considered reasonable and customary for the custodian industry covering the custodian's duties and activities as custodian for the carrier's assets;

(2) Describe the nature and extent of the insurance protection; and

(3) Promptly disclose to the carrier any change in the insurance protection during the term of the custodial agreement.

L. The custodian shall indemnify the carrier for any loss of custodied securities caused by the negligence or dishonesty of the custodian.

M. If there is a loss of custodied securities for which the custodian is obligated to indemnify the carrier under §L of this regulation, the custodian promptly shall replace:

(1) The securities or the value of the securities; and

(2) The value of any loss of rights or privileges resulting from the loss of securities.

N. The agreement may provide that the custodian is not liable for failure to take an action required under the agreement in the event and to the extent that the taking of the action is prevented or delayed by:

(1) War (whether declared or not and including existing wars), revolution, insurrection, riot, or civil commotion;

(2) Act of God, accident, fire, or explosion;

(3) Stoppage of labor, strikes, or other differences with employees;

(4) Laws, regulations, orders, or other acts of any governmental authority; or

(5) Any other cause beyond the custodian's reasonable control.

O. Agreement between Custodian and Agent.

(1) Except as provided in §O(2) of this regulation, if the custodian gains entry in a clearing corporation through an agent, there shall be an agreement between the custodian and the agent under which the agent is subject to the same liability for loss of custodied securities as the custodian.

(2) If the agent is subject to regulation under the laws of a different jurisdiction than the custodian, the Commissioner may accept a standard of liability applicable to the agent that is different from the standard of liability applicable to the custodian.

P. Notice of Termination or Withdrawal.

(1) The custodian shall provide written notification to the Commissioner if:

(a) The custodial agreement with the carrier has been terminated; or

(b) 100 percent of the account assets in any one custody account have been withdrawn.

(2) The notification shall be given to the Commissioner within 3 business days after:

(a) The receipt by the custodian of the carrier's written notice of termination; or

(b) The withdrawal of 100 percent of the account assets.

Q. The agreement shall provide that the use of an agent by a custodian does not alter the custodian's obligations under the agreement and that the terms of the agreement may not be modified by the terms of any agreement between the custodian and the agent.

Cross References

31.04.09.02A(1)(b)

31.04.09.02B(2)

31.04.09.04A(1)

31.04.09.04A(2)

31.04.09.04C(1)

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective May 15, 1978
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01—.03 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.16 to COMAR 31.04.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.03, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .01—.04, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)
Administrative History: Regulation .02A amended as an emergency provision effective August 11, 2004 (31:18 Md. R. 1349); amended permanently effective November 8, 2004 (31:22 Md. R. 1598)
Authority: Insurance Article, §§2-109 and 4-115; Health-General Article, §§15-102.3 and 19-728; Annotated Code of Maryland

COMAR 31.04.09.04 Existing Agreements.

A. Compliance and Certification Required. For an existing custody agreement entered into before the effective date of this chapter, a carrier shall:

(1) Bring the existing custody agreement into compliance with the requirements of Regulation .03 of this chapter by the earlier of:

(a) The renewal date of the custody agreement; or

(b) 12 months after the effective date of this chapter; and

(2) Certify to the Commissioner that the existing custody agreement has been brought into compliance with the requirements of Regulation .03 of this chapter by the earlier of:

(a) 30 days after the renewal date of the custody agreement; or

(b) 12 months after the effective date of this chapter.

B. Form of Certification. The certification required by §A of this regulation shall be:

(1) Signed by an officer of the carrier; and

(2) In the following form:

“I hereby certify that the custody agreement between (name of carrier) and (name of custodian) has been brought into compliance with the requirements of COMAR 31.04.09. I understand that the Maryland Insurance Administration may verify the accuracy of this certification during a future financial examination.

Name _________________________

Title _________________________

” Date _________________________

C. Failure to Comply.

(1) If the Commissioner determines that an existing custody agreement has not been brought into compliance with the requirements of Regulation .03 of this chapter within 12 months after the effective date of this chapter, the carrier shall cure the noncompliance within:

(a) 60 days after notification by the Commissioner; or

(b) An extended cure period authorized by the Commissioner.

(2) If the custody agreement is not cured within the time allowed by the Commissioner, the Commissioner may:

(a) Take any action authorized by Insurance Article, §4-113, Annotated Code of Maryland; or

(b) Require the carrier to report the securities held by the custodian in accordance with the terms of the noncompliant custody agreement as “Assets—Not Admitted”.

History

Administrative History: Effective date: May 1, 1968
Administrative History: Amended effective May 15, 1978
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Regulations .01 and .02 repealed and new Regulations .01—.03 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.16 to COMAR 31.04.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.03, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .01—.04, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)
Administrative History: Regulation .02A amended as an emergency provision effective August 11, 2004 (31:18 Md. R. 1349); amended permanently effective November 8, 2004 (31:22 Md. R. 1598)
Authority: Insurance Article, §§2-109 and 4-115; Health-General Article, §§15-102.3 and 19-728; Annotated Code of Maryland

31.04.10 Domestic Insurers—Insider Trading

COMAR 31.04.10.01 General.

The purchase and sale of equity securities issued by domestic stock insurance companies or their affiliates by the beneficial owners, directors, or officers of these companies are subject to regulation under these regulations. In respect of “short-swing” purchase and sale, or sale and purchase, of equity securities by persons regulated by Insurance Article, §3-119, Annotated Code of Maryland, the basic purpose is to prevent “insiders” from retaining profits realized on the equity securities, usually stocks, on the basis of information not available to others but Insurance Article, §3-119, Annotated Code of Maryland, is so worded as to apply whether or not in a particular transaction the “insider” has any “inside” information and without consideration of any intention he may have as to holding the security bought or repurchasing the security sold.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.02 Conformity to Federal Rule.

Any beneficial owners, directors, or officers of the insurer satisfying the requirements of the U.S. Securities & Exchange Commission on insider trading (see SEC reg. 240.16b-1 et seq.) will be considered to have complied with the “insider” provisions and requirements of this chapter and of Insurance Article, §3-119(e), Annotated Code of Maryland.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.03 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Certain Transactions Effected in Connection with a Distribution.

A. Any transaction of purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the provisions of Insurance Article, §3-119(e), Annotated Code of Maryland, to the extent specified in this chapter, as not comprehended within the purpose of Insurance Article, §3-119(e), upon the following conditions:

(1) The person effecting the transaction is engaged in the business of distributing securities and is participating in good faith, in the ordinary course of this business, in the distribution of the block of securities;

(2) The security involved in the transaction is:

(a) A part of the block of securities and is acquired by the person effecting the transaction, with a view to distribution thereof, from the issuer or other person on whose behalf the securities are being distributed or from a person who is participating in good faith in the distribution of the block of securities; or

(b) A security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with the distribution: and

(3) Other persons not within the purview of Insurance Article, §3-119(e), Annotated Code of Maryland, are participating in the distribution of the block of securities on terms at least as favorable as those on which the person is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of Insurance Article, §3-119(e), by this section of this regulation. However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing these functions may not preclude an exemption which would otherwise be available under this section of this regulation.

B. The exemption of a transaction pursuant to this regulation with respect to the participation therein of one party thereto may not render the transaction exempt with respect to participation of any other party therein unless the other party also meets the conditions of this regulation.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.04 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Acquisitions of Shares of Stock and Stock Options under Certain Stock Bonus, Stock Option, or Similar Plans.

Any acquisition of shares of stock (other than stock acquired upon the exercise of an option, warrant, or right) pursuant to a stock bonus, profit sharing, retirement, incentive, thrift, savings or similar plan, or any acquisition of a qualified or a restricted stock option plan, or a stock option pursuant to an employees' stock purchase plan, by a director or officer of the issuer of the stock or stock option shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland, if the plan meets the following conditions:

A. The plan has been approved, directly or indirectly, by the affirmative votes of the holders of a majority of the securities of the issuer present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of Maryland, or by the written consent of the holders of a majority of the securities of the issuer entitled to vote. However, if the vote or written consent was not solicited substantially in accordance with the proxy rules and regulations prescribed by the National Association of Insurance Commissioners, if any, in effect at the time of the vote or written consent, the issuer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan which would be required by the rules and regulations so prescribed and in effect at the time the information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were then being solicited, on or before the date of the first annual meeting of security holders held subsequent to the later of the date Insurance Article, §3-119, Annotated Code of Maryland, first applies to the issuer, or the acquisition of an equity security for which exemption is claimed. The written information may be furnished by mail to the last known address of the security holders of record within 30 days before the date of mailing. Four copies of the written information shall be filed with, or mailed for filing to, the Insurance Commissioner not later than the date on which it is first sent or given to security holders of the issuer. For the purposes of this section, the term “issuer” includes a predecessor corporation if the plan or obligations to participate thereunder were assumed by the insurer in connection with the succession.

B. If the selection of any director or officer of the issuer to whom stock may be allocated or to whom qualified, restricted, or employee stock purchase plan stock options may be granted pursuant to the plan, or the determination of the number or maximum number of shares of stock which may be allocated to the director or officer or which may be covered by qualified, restricted, or employee stock purchase plan stock options granted to the director or officer, is subject to the discretion of any person, then the discretion shall be exercised only as follows:

(1) With respect to the participation of directors:

(a) By the board of directors of the issuer, a majority of which board and a majority of the directors acting in the matter are disinterested persons;

(b) By, or only in accordance with the recommendation of, a committee of three or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons; or

(i) Specifies the number or maximum number of shares of stock which directors may acquire or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted to directors and the terms upon which, and the times at which, or the periods within which, the stock may be acquired or the options may be acquired and exercised; or

(ii) Sets forth, by formula or otherwise, effective and determinable limitations with respect to the foregoing based upon earnings of the issuer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors.

(2) With respect to the participation of officers who are not directors:

(a) By the board of directors of the issuer or a committee of three or more directors; or

(3) For the purpose of this section a director or committee member shall be deemed to be a disinterested person only if that person is not at the time the discretion is exercised eligible and has not at any time within 1 year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom qualified, restricted, or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the issuer or any of its affiliates entitling the participants in the plan to acquire stock or qualified, restricted, or employee stock purchase plan stock options of the issuer or any of its affiliates.

(4) The provisions of this section do not apply with respect to any option granted, or other equity security acquired, before the date that Insurance Article, §3-119, Annotated Code of Maryland, first became applicable with respect to any class of equity security of the issuer.

C. As to each participant or as to all participants, the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock which may be allocated, or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted, pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date and may be determined either by fixed or maximum dollar amounts or fixed or maximum number of shares or by formulas based upon earnings of the issuer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages of shares outstanding from time to time, or similar factors which will result in an effective and determinable limitation. Limitations may be subject to any provisions for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.

D. Unless the context otherwise requires, all terms used in this regulation shall have the same meaning as in Insurance Article, Annotated Code of Maryland. In addition, the following definitions apply:

(1) “Plan” includes any plan, whether or not set forth in any formal written document or documents and whether or not approved in its entirety at one time.

(2) “Qualified stock option” and “employee stock purchase plan” that are set forth in §§422 and 423 of the Internal Revenue Code of 1954, as amended, are to be applied to those terms when used in this chapter. The term “restricted stock option” as defined in §424(b) of the Internal Revenue Code of 1954, as amended, shall be applied to that term as used in this chapter, provided, however, that for the purposes of this chapter an option which meets all of the conditions of that section other than the date of issuance shall be deemed to be a “restricted stock option.”

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.05 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Certain Transactions in which Securities Are Received by Redeeming Other Securities.

Any acquisition of an equity security (other than a convertible security or right to purchase a security) by a director or officer of the issuer issuing the security shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland, upon condition that:

A. The equity security is acquired by way of redemption of another security of an issuer substantially all of whose assets other than cash (or government bonds) consist of securities of the issuer of the equity security so acquired, and which:

(1) Represented substantially and in practical effect a stated or readily ascertainable amount of the equity security;

(2) Had a value which was substantially determined by the value of the equity security; and

(3) Conferred upon the holder the right to receive the equity security without the payment of any consideration other than the security redeemed;

B. No security of the same class as the security redeemed was acquired by the director or officer within 6 months before the redemption or is acquired within 6 months after the redemption;

C. The issuer of the equity security acquired has recognized the applicability of §A of this regulation by appropriate corporate action.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.06 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Long-Term Profits Incident to Sales within 6 Months of the Exercise of an Option.

A. To the extent specified in §B of this regulation, the Insurance Commissioner hereby exempts as not comprehended within the purposes of Insurance Article, §3-119(e), Annotated Code of Maryland, any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security if the purchase is pursuant to the exercise of an option or similar right either acquired:

(1) More than 6 months before its exercise; or

(2) Pursuant to the terms of an employment contract entered into more than 6 months before its exercise.

B. In respect of transactions specified in §A of this regulation, the profits inuring to the issuer may not exceed the difference between the process of the sale and the lowest market price of any security of the same class within 6 months before or after the date of sale. Nothing in this section shall be deemed to enlarge the amount of profit which would inure to the issuer in the absence of this regulation.

C. The Insurance Commissioner also hereby exempts, as not comprehended within the purposes of Insurance Article, §3-119(e), Annotated Code of Maryland, the disposition of a security, purchased in a transaction specified in §A of this regulation pursuant to a plan or agreement for merger or consolidation, or reclassification of the issuer's securities, or for the exchange of its securities for the securities of another person which has acquired its assets, or which is in control, as defined in §368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, when the terms of the plan or agreement are binding upon all stockholders of the issuer except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.

D. The exemptions provided by this regulation may not apply to any transaction made unlawful by Insurance Article, §3-119(f), Annotated Code of Maryland, or by any regulations thereunder.

E. The burden of establishing the market price of a security for the purpose of this regulation shall rest upon the person claiming the exemption.

F. The exemption granted pursuant to this regulation shall apply to any liability under Insurance Article, §3-119(e), Annotated Code of Maryland, existing at or after the effective date of this regulation, but may not be deemed to affect judgments rendered before that date.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.07 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Certain Acquisitions and Dispositions of Securities Pursuant to Merger or Consolidations.

A. The following transactions shall be exempt from the provisions of Insurance Article, §3-119(e), Annotated Code of Maryland, as not comprehended within the purpose of that statute:

(1) The acquisition of a security of an issuer pursuant to a merger or consolidation, in exchange for a security of a company which, before the merger or consolidation, owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except in the case of consolidation the resulting company;

(2) The disposition of a security, pursuant to a merger or consolidation of an issuer which, before the merger or consolidation, owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except in the case of consolidation, the resulting company;

(3) The acquisition of a security of an issuer pursuant to a merger or consolidation, in exchange for a security of a company which, before the merger or consolidation, held over 85 percent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values before the merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period before the merger or consolidation; or

(4) The disposition of a security, pursuant to a merger or consolidation, of an issuer which, before the merger or consolidation, held over 85 percent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values before the merger or consolidation, as determined by reference to their most recent available financial statements for a 12-month period before the merger or consolidation.

B. A merger within the meaning of this regulation shall include the sale or purchase of substantially all the assets of one issuer by another in exchange for stock which is then distributed to the security holders of the issuer which sold its assets.

C. Notwithstanding the foregoing, if an officer, director, or stockholder shall make any purchase (other than a purchase exempted by this chapter or any other regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, of a security in any company involved in the merger or consolidation and any sale (other than a sale exempted by this chapter or any other regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, of a security in any other company involved in the merger or consolidation within any period of less than 6 months during which the merger or consolidation took place, the exemption provided by this regulation shall be unavailable to the officer, director, or stockholder to the extent of the purchase and sale.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.08 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Transactions Involving the Deposit or Withdrawal of Equity Securities under a Voting Trust or Deposit Agreement.

Any acquisition or disposition of an equity security involved in the deposit of the security under, or the withdrawal of the security from, a voting trust or deposit agreement, and the acquisition or disposition in connection therewith of the certificate representing the security, shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland, if substantially all of the assets held under the voting trust or deposit agreement immediately after the deposit or immediately before the withdrawal, as the case may be, consisted of equity securities of the same class as the security deposited or withdrawn. However, this regulation does not apply to the extent that there shall have been either:

A. A purchase of an equity security of the class deposited and a sale of any certificate representing an equity security of the class; or

B. A sale of an equity security of the class deposited and a purchase of any certificate representing an equity security of the class (otherwise than in a transaction involved in the deposit or withdrawal or in a transaction exempted by any other section of any regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, within a period of less than 6 months which includes the date of the deposit or withdrawal.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.10.09 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Transactions Involving the Conversion of Equity Securities.

A. Any acquisition or disposition of an equity security involved in the conversion of an equity security which, by its terms or pursuant to the terms of the corporate charter or other governing instruments, is convertible immediately or after a stated period of time into another equity security of the same issuer, shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland. However, this regulation does not apply to the extent that there shall have been either:

(1) A purchase of any equity security of the class convertible (including any acquisition of or change in a conversion privilege) and a sale of any equity security of the class issuable upon conversion; or

(2) A sale of any equity security of the class convertible and any purchase of any equity security issuable upon conversion (otherwise than in a transaction involved in the conversion or in a transaction exempted by any other section of any regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, within a period of less than 6 months which includes the date of conversion.

B. For the purpose of this regulation an equity security is not deemed to be acquired or disposed of upon conversion of an equity security if the terms of the equity security converted require the payment or entail the receipt, in connection with the conversion, of cash or other property (other than equity securities involved in the conversion) equal in value at the time of conversion to more than 15 percent of the value of the equity security issued upon conversion.

C. For the purpose of this regulation an equity security shall be deemed convertible if it is convertible at the option of the holder or of some other person or by operation of the terms of the security or the governing instrument.

History

Administrative History: Effective date: May 15, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.38 to COMAR 31.04.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 3-119, Annotated Code of Maryland

COMAR 31.04.11 Newspaper Advertisements by Unauthorized Insurers [Repealed]

History

Administrative History: Effective date: June 9, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.24 to COMAR 31.04.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter repealed effective January 15, 2007 (34:1 Md. R. 32)

COMAR 31.04.12.01 Methodology.

The methodology in Regulation .02 of this chapter shall be used to determine whether an insurer has engaged in accepting business from a person who does not have an appointment from the insurer with such frequency as to constitute a general business practice within the meaning of Insurance Article, §4-113(b)(11), Annotated Code of Maryland.

History

Administrative History: Effective date: September 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Binders—Motor Vehicle Liability Insurance, repealed effective
Administrative History: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Regulations .01—.03, Insurer Transactions with Unappointed Persons—General Business Practices, adopted effective March 16, 1992 (19:5 Md. R. 576)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.47 to COMAR 31.04.12 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 4-113(b)(11) and (e), Annotated Code of Maryland

COMAR 31.04.12.02 Frequency of Practice.

It shall be considered prima facie evidence of a general business practice of violating Insurance Article, §4-113(b)(11), Annotated Code of Maryland, if in any 12-month period it is found that the number of transactions violating Insurance Article, §4-113(b)(11), by foreign insurers for policies issued to Maryland residents, or by domestic insurers for all policies written, equals or exceeds the following:

A. Five transactions with a single person who does not have an appointment from the insurer; or

B. One or more transactions with five or more people who do not have appointments from the insurer.

Cross References

31.04.12.01

History

Administrative History: Effective date: September 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Binders—Motor Vehicle Liability Insurance, repealed effective
Administrative History: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Regulations .01—.03, Insurer Transactions with Unappointed Persons—General Business Practices, adopted effective March 16, 1992 (19:5 Md. R. 576)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.47 to COMAR 31.04.12 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 4-113(b)(11) and (e), Annotated Code of Maryland

COMAR 31.04.12.03 Overcoming the Presumption.

An insurer may overcome the presumption that a general business practice of violating Insurance Article, §4-113(b)(11), Annotated Code of Maryland, exists by presenting evidence to the Commissioner relating to the insurer's intent, the nature of the violations, and any other relevant factors.

History

Administrative History: Effective date: September 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Binders—Motor Vehicle Liability Insurance, repealed effective
Administrative History: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Regulations .01—.03, Insurer Transactions with Unappointed Persons—General Business Practices, adopted effective March 16, 1992 (19:5 Md. R. 576)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.47 to COMAR 31.04.12 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 4-113(b)(11) and (e), Annotated Code of Maryland

31.04.13 Insurance-Producer-Controlled Business

COMAR 31.04.13.01 Applicability.

These regulations are applicable to the written contract provisions that are required within an insurance-producer-controlled holding company system involving a controlling insurance producer and a controlled authorized insurer that issues policies covered by the Property and Casualty Insurance Guaranty Corporation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective September 15, 1993 (20:20 Md. R. 1557); adopted permanently effective December 20, 1993 (20:25 Md. R. 1945)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.98 to COMAR 31.04.13 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective January 15, 2007 (34:1 Md. R. 32)
Administrative History: Regulation .03 amended effective January 15, 2007 (34:1 Md. R. 32)
Authority: Insurance Article, §§2-109, 4-116(b), 7-605, 7-701—7-704, and 10-126, Title 7, Subtitle 1, and Title 8, Subtitle 1, Annotated Code of Maryland

COMAR 31.04.13.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Comparable business” includes the same lines and kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business.

(2) “Control”, including the terms “controlling”, “controlled by”, and “under common control with”, has the meaning stated in Insurance Article, §8-101(b), Annotated Code of Maryland.

(3) “Insurance holding company system” has the meaning stated in Insurance Article, §7-101(e), Annotated Code of Maryland.

(4) “Insurer” means an insurer described in Insurance Article, §8-102, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective September 15, 1993 (20:20 Md. R. 1557); adopted permanently effective December 20, 1993 (20:25 Md. R. 1945)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.98 to COMAR 31.04.13 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective January 15, 2007 (34:1 Md. R. 32)
Administrative History: Regulation .03 amended effective January 15, 2007 (34:1 Md. R. 32)
Authority: Insurance Article, §§2-109, 4-116(b), 7-605, 7-701—7-704, and 10-126, Title 7, Subtitle 1, and Title 8, Subtitle 1, Annotated Code of Maryland

COMAR 31.04.13.03 Terms of Contract.

A. The terms of the contract required under this regulation between a controlling insurance producer and a controlled insurer within an insurance-producer-controlled holding company system shall comply with §B of this regulation.

B. The contract required under this regulation shall provide at a minimum that:

(1) The controlled insurer may:

(a) Terminate the contract for cause upon written notice to the controlling insurance producer; and

(b) Suspend immediately the authority of the controlling insurance producer to write business during the pendency of any dispute regarding the termination;

(2) The controlled insurer shall provide the controlling insurance producer with its written underwriting and rate standards, rules and procedures, manuals, and conditions for accepting or rejecting rates;

(3) The controlling insurance producer shall:

(a) Provide accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owed to the controlling insurance producer;

(b) Hold in a fiduciary capacity all funds collected for the account of the controlled insurer in one or more appropriately identified bank accounts in banks that are members of the Federal Reserve System in compliance with:

(i) Any applicable provisions of the Insurance Article, Annotated Code of Maryland, or regulations promulgated under that article, or

(ii) The requirements of the domiciliary jurisdiction of the controlling insurance producer, if the controlling insurance producer does not engage in business as an insurance producer in this State and is not required to hold a license in the State;

(d) Comply with the written underwriting and rates standards, rules and procedures, manuals, and conditions established by the controlled insurer;

(4) The controlling insurance producer may not assign the contract in whole or in part;

(5) Subject to §B(6) of this regulation, the rates, terms, and purposes of commissions, charges, and other fees of the controlling insurance producer shall be stated;

(6) The rates of the commissions, charges, and other fees may not be greater than the rates charged for placing comparable business with the controlled insurer by an insurance producer other than the controlling insurance producer;

(7) The written underwriting and rates standards, rules and procedures, manuals, and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by an insurance producer other than the controlling insurance producer;

(8) If the contract provides for a sharing of the controlled insurer's profits by the controlling insurance producer, subject to §B(9) of this regulation, the profits may not be paid until at least:

(a) 5 years after the premiums are earned on casualty insurance; or

(b) 1 year after the premiums are earned on any other insurance;

(9) Any profits may not be paid until the adequacy of reserves on remaining claims is verified as provided in Insurance Article, §§8-105(f) and (g), Annotated Code of Maryland;

(10) The controlled insurer shall establish a limit on the writing of the controlling insurance producer in relation to the insurer's surplus and total writing;

(11) In regard to the limit provided for in §B(10) of this regulation, the controlled insurer:

(a) May establish a different limit for each line or subline of business;

(b) Shall notify the controlling insurance producer when the applicable limit is approached; and

(12) In regard to the limit provided for in §B(10) of this regulation, the controlling insurance producer may not place business with the controlled insurer, if it has been notified by the controlled insurer that the limit has been reached.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective September 15, 1993 (20:20 Md. R. 1557); adopted permanently effective December 20, 1993 (20:25 Md. R. 1945)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.98 to COMAR 31.04.13 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective January 15, 2007 (34:1 Md. R. 32)
Administrative History: Regulation .03 amended effective January 15, 2007 (34:1 Md. R. 32)
Authority: Insurance Article, §§2-109, 4-116(b), 7-605, 7-701—7-704, and 10-126, Title 7, Subtitle 1, and Title 8, Subtitle 1, Annotated Code of Maryland

COMAR 31.04.14.01 Scope.

This chapter applies to a member insurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective February 1, 1996 (23:4 Md. R. 270); adopted permanently effective July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .03B amended as an emergency provision effective July 1, 1996 (23:14 Md. R. 1004); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.11 to COMAR 31.04.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .02B amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03 amended effective May 1, 2007 (34:1 Md. R. 33); November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03B amended effective October 18, 2010 (37:21 Md. R. 1438); July 16, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109 and 9-414, Annotated Code of Maryland

COMAR 31.04.14.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Corporation” means the Life and Health Insurance Guaranty Corporation.

(2) “Health benefit plan” has the meaning stated in Insurance Article, §9-401(g), Annotated Code of Maryland.

(3) Member Insurer.

(a) “Member insurer” means any person authorized in this State to transact:

(i) Direct nongroup life insurance, health insurance, annuities (including structured settlements), and supplemental policies or contracts, or health maintenance organization business to which Title 9, Subtitle 4 of the Insurance Article applies; or

(ii) Certificates under direct group policies or contracts.

(b) “Member insurer” does not include:

(i) A fraternal benefit society;

(ii) A mandatory state pooling plan;

(iii) A mutual assessment company or any entity that operates on an assessment basis;

(iv) An insurance exchange; or

(v) An organization which is permitted to issue charitable gift annuity agreements.

(4) “Resident” means a person who resides in this State at the time a member insurer is determined to be an impaired insurer or an insolvent insurer, and to whom a contractual obligation is owed.

(5) “Supplemental contract” means an agreement entered into for the distribution of policy or contract proceeds.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective February 1, 1996 (23:4 Md. R. 270); adopted permanently effective July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .03B amended as an emergency provision effective July 1, 1996 (23:14 Md. R. 1004); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.11 to COMAR 31.04.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .02B amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03 amended effective May 1, 2007 (34:1 Md. R. 33); November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03B amended effective October 18, 2010 (37:21 Md. R. 1438); July 16, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109 and 9-414, Annotated Code of Maryland

COMAR 31.04.14.03 Required Notice.

A. A member insurer or insurance producer may not deliver a life insurance policy, a health insurance policy, a health benefit plan (including a health maintenance organization contract or group master certificate), or an annuity contract which at the time of delivery exceeds the limitations imposed under Insurance Article, §9-407(k), Annotated Code of Maryland, or which is not subject to coverage under Insurance Article, §9-403, Annotated Code of Maryland, unless the member insurer or insurance producer before or at the time of delivery provides the policyholder or contract holder the notice described in §B of this regulation. This chapter does not prohibit a member insurer or insurance producer from delivering the notice to policyholders or contract holders who have full protection afforded by the corporation.

B. The notice required in §A of this regulation shall be in at least 12-point type and shall read as follows:

NOTICE OF PROTECTION PROVIDED BY MARYLAND LIFE AND HEALTH INSURANCE GUARANTY CORPORATION

This notice provides a brief summary of the Maryland Life and Health Insurance Guaranty Corporation (the Corporation) and the protection it provides for policyholders and contract holders. This safety net was created under Maryland law, which determines who and what is covered and the amounts of coverage.

The Corporation is not a department or unit of the State of Maryland and the liabilities or debts of the Life and Health Insurance Guaranty Corporation are not liabilities or debts of the State of Maryland.

The Corporation was established to provide protection in the unlikely event that your health maintenance organization or your life, annuity, or health insurance company becomes financially unable to meet its obligations and is taken over by its Insurance Department. If this should happen, the Corporation will typically arrange to continue coverage and pay claims, in accordance with Maryland law, with funding from assessments paid by other insurance companies and health maintenance organizations.

The basic protections provided by the Corporation are:

• Life Insurance

° $300,000 in death benefits

° $100,000 in cash surrender or withdrawal values

• Health Insurance or Health Benefit Plans

° $500,000 for coverage provided by health benefit plans

° $300,000 for disability insurance

° $300,000 for long-term care insurance

° $100,000 for a type of health insurance not listed above, including any net cash surrender and net cash withdrawal values under the types of health insurance listed above

• Annuities

° $250,000 in the present value of annuity benefits, including net cash withdrawal values and net cash surrender values

° With respect to each payee under a structured settlement annuity, or beneficiary of the payee, $250,000 in present value annuity benefits, in the aggregate, including any net cash surrender and net cash withdrawal values.

• The maximum amount of protection for each individual, regardless of the number of policies or contracts, is:

° $300,000 in aggregate for all types of coverage listed above, with the exception of coverage provided by health benefit plans

° $500,000 in aggregate for coverage provided by health benefit plans

NOTE: Certain policies and contracts may not be covered or fully covered. For example, coverage does not extend to any portion(s) of a policy or contract that the insurer does not guarantee, such as certain investment additions to the account value of a variable life insurance policy or a variable annuity contract. There are also various residency requirements and other limitations under Maryland law.

To learn more about the above protections, please visit the Corporation’s website at www.mdlifega.org, or contact:

Maryland Life and Health

Insurance Guaranty Corporation

6210 Guardian Gateway

Suite 195APG

Aberdeen, Maryland 21005

410-248-0407

Insurance companies, health maintenance organizations, and insurance producers are not allowed by Maryland law to use the existence of the Corporation or its coverage to encourage you to purchase any form of insurance or a health benefit plan. When selecting an insurance company or health maintenance organization, you should not rely on Corporation coverage. If there is any inconsistency between this notice and Maryland law, then Maryland law will control.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective February 1, 1996 (23:4 Md. R. 270); adopted permanently effective July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .03B amended as an emergency provision effective July 1, 1996 (23:14 Md. R. 1004); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.11 to COMAR 31.04.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .02B amended effective November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03 amended effective May 1, 2007 (34:1 Md. R. 33); November 1, 2021 (48:19 Md. R. 803)
Administrative History: Regulation .03B amended effective October 18, 2010 (37:21 Md. R. 1438); July 16, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109 and 9-414, Annotated Code of Maryland

31.04.15 Antifraud Plans

COMAR 31.04.15.01 Purpose.

The purpose of this chapter is to establish minimum standards for antifraud plans as required by Insurance Article, §27-803, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

COMAR 31.04.15.02 Applicability.

This chapter is applicable to every authorized insurer that conducts business and writes contracts of insurance in Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

COMAR 31.04.15.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Antifraud plan” means antifraud plans as provided for in Insurance Article, §27-803, Annotated Code of Maryland.

(3) “Commissioner” means the Insurance Commissioner of Maryland.

(4) Insurer.

(a) “Insurer” means authorized insurers and includes dental plans, fraternal benefit societies, the Maryland Automobile Insurance Fund, health maintenance organizations, nonprofit health service plans, and third party administrators.

(b) “Insurer” does not include reinsurers.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

COMAR 31.04.15.04 Procedures and Requirements.

A. Antifraud Plan.

(1) This section does not apply to an insurer that has filed an antifraud plan with the Administration, and the plan has been approved by the Commissioner.

(2) An insurer authorized to write insurance business that has in force policies or certificates of insurance in this State shall institute, implement, and maintain an insurance antifraud plan.

(3) An insurer shall submit an antifraud plan within 90 days of the insurer issuing or delivering a policy or certificate of insurance in the State.

B. Contents of Antifraud Plan. An antifraud plan shall:

(1) Contain provisions for educating and training an insurer's employees in the detection of insurance fraud;

(2) Provide for methods and procedures concerning the investigation of suspicious claims; and

(3) Apply to but not be limited to:

(a) Claims fraud,

(b) Application fraud,

(d) Third-party administrator fraud, and

(e) Internal fraud.

C. Amendments to Antifraud Plans. Within 30 days after modifying or amending an antifraud plan, an insurer shall:

(1) Notify the Commissioner in writing; and

(2) Provide a copy of the revised antifraud plan showing the amendments.

D. Approval of Antifraud Plans and Amendments.

(1) The Commissioner shall review each insurer's antifraud plan and any subsequent amendments to determine compliance with:

(a) The requirements of Insurance Article, §27-803, Annotated Code of Maryland; and

(b) This chapter.

(2) If the Commissioner has not disapproved an antifraud plan or amendment within 30 days of its filing, the plan shall be deemed approved.

(3) Under §D(1) of this regulation, if the Commissioner determines that an insurer's antifraud plan and any subsequent amendment is not in compliance, the Commissioner shall disapprove the plan or amendment and send a written notice of disapproval with the reasons for disapproval to the insurer.

(4) If the insurer's antifraud plan is disapproved by the Commissioner, the insurer shall submit a new plan to the Commissioner within 60 days after the date the plan was disapproved.

E. This regulation does not apply to third party administrators (TPAs) that only participate in federal programs and are therefore required to file a federal antifraud plan provided that:

(1) Such a federal antifraud plan has been filed with the Centers for Medicare & Medicaid Services;

(2) The TPA provides the federal antifraud plan at the Commissioner's request; and

(3) The TPA files a written attestation stating:

(a) The name of the TPA;

(b) The name and title of the employee attesting who has authority to bind the TPA;

(d) The date the TPA filed the antifraud plan with the federal government.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

COMAR 31.04.15.05 Plan Components.

A. Education/Training.

(1) An antifraud plan shall contain procedures for the provision of education or training, or both, to the insurer's employees regarding the detection of insurance fraud.

(2) Training in the recognition and referral of suspicious claims shall be:

(a) Required of new and existing claims personnel, underwriters, auditors, insurance producers, and consumer service personnel; and

(b) Offered to independent insurance producers who have appointments with the company.

(3) At a minimum, the educational components of antifraud plans shall address the following:

(a) Courses of instruction shall be:

(i) Designed to address specific aspects of fraud associated with a company's product line, and

(ii) At least 2 hours in duration;

(b) Personnel shall be presented with updated material at the entrance level and at least once every 2 years in conjunction with continuing education standards or as a company policy;

(c) A new employee shall receive the regulated education and training regarding the detection of fraud within 6 months of the effective date of employment; and

(d) Training programs may be developed and conducted either by internal personnel or by outside contractors.

B. Detection.

(1) An antifraud plan shall have provisions regarding the early detection of all areas of fraud including, but not limited to:

(a) Embezzlement and internal theft;

(b) Underwriting and application fraud;

(d) Claims fraud; and

(e) Application fraud.

(2) The antifraud plan shall delineate the methods or approaches, or both, that will be utilized in detecting fraud.

(3) An authorized insurer shall:

(a) Designate an individual or individuals, or a specific unit, either in-house or outside, to be responsible for coordinating the detection, referral, and investigation of suspected fraudulent activity;

(b) Include the designation in the antifraud plan; and

(4) Fraud detection guides shall be prepared, published, and maintained to assist claims personnel, underwriters, and insurance producers in the identification, detection, and handling of suspicious claims.

C. Investigation.

(1) An antifraud plan shall contain:

(a) Procedures for handling fraud complaints;

(b) Procedures that are to be followed when instances of suspected fraud have been detected, evaluated, and found to warrant a full investigation;

(c) The requirement that the company representative responsible for the conduct and oversight of fraud investigations assign the matter for investigation;

(d) The designation of the individuals responsible for conducting investigations on behalf of the insurer including the individuals responsible for providing the notifications required by §C(1)(g) of this regulation;

(e) Guidelines and procedures for conducting investigations and cooperating with the Insurance Fraud Division or other law enforcement agency which is conducting a criminal investigation if in-house staff is utilized;

(f) Written considerations as to work product and courtroom testimony; and

(g) Guidelines and procedures for notifying the appropriate law enforcement agency, including the Insurance Fraud Division of the Administration.

(2) Investigators.

(a) A company may maintain an in-house staff of investigators or contract with an outside firm.

(b) If an outside firm is used, the firm shall comply with all Maryland licensing laws and regulations to the extent that they are applicable.

D. Auditing.

(1) An antifraud plan shall contain procedures regarding the auditing of insurance producers by the company.

(2) The auditing procedures shall provide for both routine auditing and random audits.

(3) If an irregularity is discovered during an audit, the antifraud plan shall require that the duly authorized company representative who conducts or oversees investigations be notified immediately.

E. Referral for Prosecution.

(1) If an insurer, in good faith, has cause to believe that insurance fraud has been or is being committed, the insurer shall report the suspected fraud to the Insurance Fraud Division or to the appropriate federal, State, or local law enforcement authority.

(2) The reporting policy shall be in writing and maintained in the offices of the company point of contact for fraud.

(3) The written policy shall be open for inspection by market conduct examiners of the Maryland Insurance Administration.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

COMAR 31.04.15.06 Reporting of Fraud-Related Data.

A. An insurer shall maintain appropriate records for the Commissioner to determine the effectiveness of its antifraud plan.

B. A report shall be developed and provided to the Administration on an annual basis regarding the plan's effectiveness and the effectiveness of the investigative and prosecutorial efforts.

C. The report shall be filed with the Administration by March 31 of each year, reporting the previous year's statistics. The report shall be limited to Maryland data. The following information shall be reported:

(1) Number of policies in force;

(2) Number of claims;

(3) Number of suspected fraud cases;

(4) Number of suspected fraud cases in which a claim was denied;

(5) Number of suspected fraud cases reported to the authorities;

(6) Number of suspected fraud cases by product line;

(7) Number of suspected fraud cases in which a claim was denied, by product line;

(8) Number of cases prosecuted by criminal authorities; and

(9) Breakdown by perpetrator, as follows:

(a) Insured,

(b) Claimant,

(d) Noninsurance professional, by category, and

(e) Other.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1465); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.17 to COMAR 31.04.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397); February 27, 2017 (44:4 Md. R. 255)
Administrative History: Regulation .04 amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .04A, B amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .05A, B, D amended effective January 15, 2007 (34:1 Md. R. 33)
Administrative History: Regulation .06C amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Health-General Article, §19-706(e); Insurance Article, §§2-109, 8-321.1, and 27-803; Annotated Code of Maryland

31.04.16 Filing of Underwriting Standards

COMAR 31.04.16.01 Applicability.

This chapter applies to every insurer authorized to issue insurance policies which provide health, life, disability, property, or casualty coverage in this State and to insurers applying to engage in these kinds of insurance businesses in this State.

History

Administrative History: Effective date: October 16, 1962
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Insured Paying Less Than Premium Due Under the Contract, repealed effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Regulations .01—.05, Filing of Underwriting Standards, adopted effective
Administrative History: February 18, 1991 (18:3 Md. R. 304)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.30 to COMAR 31.04.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109 and 27-501, Annotated Code of Maryland

COMAR 31.04.16.02 Definition.

“Underwriting standards” means underwriting manuals, including any amendments or supplements to underwriting manuals, and those generally accepted practices of the insurer contained in written underwriting instructions, guidelines, and rules furnished by the insurer for use by its underwriters and insurance producers as standards for acceptance of risks.

Cross References

31.04.22.03B(24)

History

Administrative History: Effective date: October 16, 1962
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Insured Paying Less Than Premium Due Under the Contract, repealed effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Regulations .01—.05, Filing of Underwriting Standards, adopted effective
Administrative History: February 18, 1991 (18:3 Md. R. 304)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.30 to COMAR 31.04.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109 and 27-501, Annotated Code of Maryland

COMAR 31.04.16.03 Filing Underwriting Standards.

A. The Commissioner may require an insurer to file its underwriting standards, or any portion of its underwriting standards pertaining to specific subjects.

B. The insurer shall provide the Commissioner with the information requested within 30 days after receipt of the Commissioner's request.

History

Administrative History: Effective date: October 16, 1962
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Insured Paying Less Than Premium Due Under the Contract, repealed effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Regulations .01—.05, Filing of Underwriting Standards, adopted effective
Administrative History: February 18, 1991 (18:3 Md. R. 304)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.30 to COMAR 31.04.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109 and 27-501, Annotated Code of Maryland

COMAR 31.04.16.04 Confidentiality.

When responding to the Commissioner, an insurer may request a finding that all or certain portions of its underwriting standards shall be considered confidential commercial information under State Government Article, §10-617(d), Annotated Code of Maryland. An insurer making this request shall state the reasons for considering the material confidential commercial information. The information furnished shall be regarded as confidential until the Commissioner rules otherwise.

History

Administrative History: Effective date: October 16, 1962
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Insured Paying Less Than Premium Due Under the Contract, repealed effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Regulations .01—.05, Filing of Underwriting Standards, adopted effective
Administrative History: February 18, 1991 (18:3 Md. R. 304)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.30 to COMAR 31.04.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109 and 27-501, Annotated Code of Maryland

COMAR 31.04.16.05 Record Retention.

An insurer shall retain for a period of at least 3 years all records pertaining to the establishment, implementation, and enforcement of its underwriting standards.

History

Administrative History: Effective date: October 16, 1962
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Insured Paying Less Than Premium Due Under the Contract, repealed effective March 6, 1989 (16:4 Md. R. 496)
Administrative History: ——————
Administrative History: Regulations .01—.05, Filing of Underwriting Standards, adopted effective
Administrative History: February 18, 1991 (18:3 Md. R. 304)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.30 to COMAR 31.04.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended effective January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109 and 27-501, Annotated Code of Maryland

31.04.17 Filing of Forms for Approval

COMAR 31.04.17.01 Applicability.

The submission of any form required to be filed under Insurance Article, §§8-433(a), 12-203, 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii), 14-126, 14-405(b)(8) and (9), or 14-410(c), Annotated Code of Maryland as amended to date, shall be in compliance with the regulations in this chapter, except to the extent that a regulation or portion of a regulation is not applicable to a particular form.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A fraternal benefit society.

(2) “Commissioner” means the Maryland Insurance Commissioner.

(3) Contract on an Insert Page Basis.

(a) “Contract on an insert page basis” means a contract that is composed of insert pages, with each insert page being identified with a unique form number.

(b) “Contract on an insert page basis” does not include a contract that contains an insert that is identified with a unique form number and is longer than one page.

(4) Contract on a Sectional Basis.

(a) “Contract on a sectional basis” means a contract that is composed of sections, with each section being identified with a unique form number.

(b) “Contract on a sectional basis” includes a contract that contains sections that are only one page long.

(5) “Form” means:

(a) A policy;

(b) A contract;

(d) A rider;

(e) An endorsement; or

(f) An application.

(6) “Guaranteed renewable contract” means a health insurance contract that:

(a) Permits the insured to renew the contract by timely payment of premiums:

(i) Until 65 years old or until eligibility for Medicare; or

(ii) In the case of a contract issued after 60 years old, for at least 5 years from its date of issue; and

(b) Does not permit the carrier to make any unilateral change in any provision of the contract during the guaranteed renewability period, except that the carrier may make changes in premium rates by class.

(7) “Health insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(8) “Insured” means an individual covered under a form.

(9) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(10) “Life insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(11) “Noncancellable contract” means a health insurance contract that:

(a) Permits the insured to renew the contract by timely payment of premiums:

(i) Until 65 years old or eligibility for Medicare; or

(ii) In the case of a contract issued after 60 years old, for at least 5 years from its date of issue;

(b) Does not permit the carrier to make any unilateral change in any provisions of the contract during the period the contract is in force; and

(12) “Policyholder” means the individual or entity to whom the contract is issued.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.03 Filing of Forms for Approval.

A. Duplicate Forms Required For Nonelectronic Form Submissions.

(1) A carrier shall submit duplicate copies of each form the carrier intends to use in Maryland to the Commissioner for approval.

(2) If the Commissioner approves the form submitted by or on behalf of the carrier, the Commissioner shall:

(a) Retain one copy; and

(b) Return to the carrier one copy, with an appropriate notation indicating approval.

B. A carrier submitting forms for approval, or premiums for forms pending approval or previously approved, shall print or type in a conspicuous manner immediately below the name of the carrier on the letter of transmittal the carrier's National Association of Insurance Commissioners (NAIC) company code number.

C. A carrier shall submit the following with each form filing:

(1) A current transmittal form developed by:

(a) The Maryland Insurance Administration; or

(b) The National Association of Insurance Commissioners (NAIC);

(2) A filing fee in accordance with Insurance Article, §2-112, Annotated Code of Maryland;

(3) Except for electronic form filings, a self-addressed stamped envelope; and

(4) A cover letter listing the forms submitted for approval by form number, with a brief description of each form filed for approval.

D. Each form shall be identified by a form number which is unique to that form. This number should be printed in the lower lefthand corner of the first page, and no other number should appear in close proximity to the form number. If any loose leaf or alternate pages are submitted in accordance with Insurance Article, §12-203(e), Annotated Code of Maryland, each page shall also be identified by a unique form number.

E. Each form shall be printed in a size and style of type which is easily legible.

F. If any portion of a form is in a language other than English, an English translation shall appear in the same form.

G. Name of Carrier.

(1) Each complete form, except riders or endorsements, shall bear on the face the corporate name and either:

(a) The address (city and state) of the carrier; or

(b) The address of the carrier's office that will administer the form.

(2) The name of the carrier shall appear with more prominence on a form than the name of:

(a) An affiliate;

(b) A producer;

(d) A holding company; or

(e) A third party administrator.

H. Modifications or Revisions.

(1) A carrier may modify or revise a form only through:

(a) Some form of press plate, such as imprinting, multigraph, mimeograph, multilith, electronic printer, or rubber stamp; or

(b) A computer generated revision.

(2) A carrier may not modify or revise a form through handwritten or typed interlineations or deletions.

I. Submission of Forms.

(1) Except as provided in §I(2) of this regulation, a carrier shall submit forms for approval with the Commissioner.

(2) A third party may submit a form for approval on behalf of a carrier, if the third party includes a written authorization from the carrier to make the form filing.

J. Submission Details. If the submission is new, the carrier shall point out the unique features of the form.

K. Representative Specimen Data.

(1) Except for applications filed for approval, a carrier shall complete each form filed for approval with representative specimen data.

(2) A carrier shall use the following specimen data for life insurance policies:

(a) 35 years old for a policy issued at that age; and

(b) The lowest age of issue for juvenile policy forms.

L. Mortality Table or Interest Rate Changes in Life Insurance or Annuity Contracts. If no other change in the contract is being filed at the same time, a carrier may file a change in the nonforfeiture basis for a previously approved contract by filing:

(1) Revised pages for any pages in the contract that are affected; and

(2) A revised actuarial memorandum demonstrating compliance with minimum nonforfeiture and reserve requirements.

M. Any individual or group policy, group certificate, policy amendment, rider, or endorsement form shall have affixed the signature of a responsible officer of the carrier as part of the form.

N. In the case of a life insurance policy or certificate, the carrier shall furnish a mathematical outline showing, for the specimen age and a specimen duration, computation of the:

(1) Net premium;

(2) Adjusted premium;

(3) Nonforfeiture factor, if different from the adjusted premium for the specimen age used; and

(4) Nonforfeiture values.

O. Except for an annuity contract that is listed as exempt under Insurance Article, §16-501, Annotated Code of Maryland, in the case of an annuity contract, the carrier shall furnish:

(1) A mathematical outline showing computation of the minimum nonforfeiture amounts; and

(2) A numerical demonstration that the minimum paid-up annuity, cash surrender, or death benefits available under the contract are not less than the minimum benefits required under Insurance Article, Title 16, Subtitle 5, Annotated Code of Maryland.

Cross References

31.04.17.05B(2)

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.04 Variable Materials, Insert Pages, and Contracts Comprised of Sections.

A. Variable Information.

(1) Individual Contracts.

(a) Except as specified in §A(1)(b) of this regulation, a carrier may not include variable material in an individual contract, or in a form to be used with an individual contract.

(b) A carrier may include variable material in an individual contract or in a form to be used with an individual contract in the following portions of the form:

(i) The specifications, data, or schedule page;

(ii) The product marketing name;

(iii) The address of the carrier;

(iv) Signatures of officers of the carrier;

(v) Descriptions of copayment amounts, deductibles, coinsurance amounts, out-of-pocket limits, annual maximums, or lifetime maximums;

(vi) Specific dates, such as effective dates and termination dates; and

(vii) Descriptions of benefit amounts, benefit limits, waiting periods or elimination periods.

(c) If an individual contract or a form to be used with an individual contract contains variable material as permitted under §A(1)(b) of this regulation, the carrier shall:

(i) Bracket the variable material or otherwise mark the variable material to denote variability; and

(ii) Include a statement of variability, in duplicate, that discusses how each variable item may change.

(d) After an individual contract or a form to be used with an individual contract is approved with variable material, a carrier may not submit a new statement of variability to be used with the previously approved individual contract or form, except for the following:

(i) Copayment amounts;

(ii) Coinsurance amounts;

(iii) Deductible amounts;

(iv) Out-of-pocket limits;

(v) Annual maximums;

(vi) Lifetime maximums;

(vii) Benefit amounts;

(viii) Benefit limits;

(ix) Waiting periods; or

(x) Elimination periods.

(e) A carrier shall include the following with a new statement of variability filing for a previously approved individual contract or form:

(i) A cover letter identifying the carrier and the carrier's National Association of Insurance Commissioners company code number; and

(ii) The form number and date of approval of the form for which new variable material is being submitted.

(2) Group Contracts.

(a) A carrier may include variable material in a group contract or in a form to be used with a group contract, if the carrier:

(i) Brackets the variable material or otherwise marks the variable material to denote variability; and

(ii) Includes a statement of variability, in duplicate, that discusses how each variable item may change, including all textual variations that are intended.

(b) After a group contract or a form to be used with a group contract is approved with variable material, a carrier may not submit a new statement of variability to be used with the previously approved group contract or form, except for the following:

(i) Copayment amounts;

(ii) Coinsurance amounts;

(iii) Deductible amounts;

(iv) Out-of-pocket limits;

(v) Annual maximums;

(vi) Lifetime maximums;

(vii) Benefit amounts;

(viii) Benefit limits;

(ix) Waiting periods; or

(x) Elimination periods.

(c) A carrier shall include the following with a new statement of variability filing for a previously approved group contract or form:

(i) A cover letter identifying the carrier and the carrier's National Association of Insurance Commissioners company code number; and

(ii) The form number and date of approval of the form for which new variable material is being submitted.

B. Contracts with Insert Pages.

(1) A carrier may file for approval of a contract on an insert page basis, only if:

(a) Each insert page is identified by a unique form number appearing in the lower left corner of the insert page; and

(b) The carrier includes the following in the filing submission:

(i) A description of how the various insert pages will be combined;

(ii) A listing of the insert pages that can be substituted for other specific insert pages; and

(iii) The filing fee required under Insurance Article, §2-112, Annotated Code of Maryland, for each insert page with a unique form number.

(2) A carrier may not file for approval of insert pages for use with a previously approved contract, if the previously approved contract was not approved on an insert page basis.

(3) If a carrier files for approval of insert pages for a previously approved contract, the submission shall:

(a) Identify by form number and date of approval any insert pages that the new insert pages will replace; and

(b) Include a copy of the currently approved contract, unless the Commissioner waives the requirement or determines that a copy is not necessary to review the submission.

C. Contracts Comprised of Sections.

(1) A carrier may file for approval of a contract on a sectional basis, only if:

(a) Each section is identified by a unique form number appearing in the lower left corner of the first page of the section; and

(b) The carrier includes the following in the filing submission:

(i) A description of how the various sections will be combined;

(ii) A listing of the sections that can be substituted for other specific sections; and

(iii) The filing fee required under Insurance Article, §2-112, Annotated Code of Maryland, for each section with a unique form number.

(2) A carrier may not file for approval of sections for use with a previously approved contract, if the previously approved contract was not approved on a sectional basis.

(3) If a carrier files for approval of sections for a previously approved contract, the submission shall:

(a) Identify by form number and date of approval any sections that the new sections will replace; and

(b) Include a copy of the currently approved contract, unless the Commissioner waives the requirement or determines that a copy is not necessary to review the submission.

Cross References

31.04.19.02B(13)(b)(i)

31.04.19.02B(13)(b)(ii)

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.05 Failure to Respond to the Commissioner's Correspondence.

A. The Commissioner shall deem a filing withdrawn by the carrier if the carrier fails to respond to correspondence from the Commissioner regarding the filing within 90 days of the date of the correspondence from the Commissioner.

B. If a carrier resubmits a form for approval after 90 days of the date of the Commissioner's correspondence regarding the filing in which the form was included, the carrier shall:

(1) Include a new filing fee for the form and associated premium rates included in the filing; and

(2) Include in the filing all the information required in Regulation .03 of this chapter.

Cross References

31.04.19.04I(3)

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.06 Contents of Application Forms.

A. An application form shall stipulate the plan and amount of insurance and any added optional benefits being applied for.

B. If the carrier uses an application form which contains language substantially as follows, “Except that no change in amount, classification, plan of insurance or benefits shall be effective unless agreed to in writing by the applicant”, with an additional statement that this exception is effective only in certain states, the form shall specifically name Maryland as one of the states in which the exception is effective.

C. If an application inquires about the applicant's participation in “hazardous activities”, the application shall list the activities that are considered to be “hazardous”.

D. If an application inquires about the applicant's use of “other habit-forming drugs”, the application shall list the specific drugs that are considered “habit-forming”.

E. If an application contains questions regarding past or present health conditions:

(1) The questions shall be asked to the best of the applicant's knowledge and belief; or

(2) The application shall include a statement that all of the answers provided are representations and are not warranties.

F. If an application inquires about a symptom of an applicant, the question shall be asked about a “known symptom” of a physical condition or mental condition.

G. If an application inquires if an applicant has had any indication of a physical condition or mental condition, the question shall be asked about a “known indication” of a physical condition or mental condition.

H. Applications for Individual Insurance.

(1) If an application is to be used by more than one carrier, the application shall include check-off boxes to indicate the carrier to which application is being made.

(2) Each carrier using the application shall:

(a) File the application with the Commissioner for approval; and

(b) Receive approval of use of the application from the Commissioner before using it in Maryland.

I. Applications for Group Insurance.

(1) A group application may be used by more than one carrier if each carrier using the application shall:

(a) File the application with the Commissioner; and

(b) Receive approval of the application from the Commissioner before using it in Maryland.

(2) If more than one carrier requests approval to use the same application with different group applicants, the application shall include check-off boxes to indicate the carrier to which application is being made.

(3) Group Applications for Multiple Carriers.

(a) A group application may be designed to be used by:

(i) More than one carrier;

(ii) A carrier and a health maintenance organization; or

(iii) Multiple carriers and a health maintenance organization.

(b) A group application described in §I(3)(a) of this regulation shall clearly identify the coverage underwritten by each carrier or health maintenance organization.

J. If an application is to be completed by more than one individual, the signature box in the application shall clearly indicate that the signature applies only to the portion of the application completed by that individual.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.07 Advertising Material Within a Form.

A. A form may not contain any advertising material.

B. A carrier may use a marketing name, registered trademark, or logo in a form, if the logo, registered trademark, or marketing name does not mislead as to the identity of the carrier.

C. A carrier may include text such as “50th Anniversary Year”, “Established over 100 Years”, or “Incorporated 1860” in a form.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.08 Proxy.

A statement may not appear in the application with respect to a proxy through which one or more members of the board of directors is authorized to vote in the election of directors.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.09 Life Insurance Policies.

A. In the case of term policies, the insurer shall indicate in clear, unambiguous language, whether or not coverage is granted if loss occurs on the term expiry date. Some examples of acceptable language are:

(1) If death occurs on or before the 5th anniversary of the policy, etc.;

(2) If death occurs before but not including, the 5th anniversary of the policy, etc.;

(3) This policy shall terminate on the 5th anniversary of the date of issue at 12:00 o'clock noon Standard Time at the place where the insured then resides.

B. In the case of a renewable term life insurance policy (that is, a term policy containing an option on the part of the policyholder to renew for one or more further periods of term insurance), the actual premiums to be charged at each renewal date shall be shown in the policy. In a policy of wholesale or group term life insurance, however, the insurer may reserve the right to change the table of renewal premiums on any policy anniversary on 30 days' notice.

C. If the brief description of a policy indicates that the policy is renewable or convertible, or both, the brief description shall further indicate the term during which the policyholder may exercise the option to renew or convert, or both, unless this option may be exercised during the entire term of the policy or renewal of the policy.

D. In the case of a convertible term life insurance policy issued on a participating basis, if there is a provision for the computation of the cost of change on the basis of difference in premiums (or premiums plus interest), the cost of change also shall provide for adjustment in dividends.

E. If a life insurance policy contains a war or aviation exclusion, or both, a printed or stamped statement shall appear as part of the brief description on the first page of the policy reading “War Restrictions Included”, “Aviation Exclusions Included”, “War and Aviation Restrictions Included”, or any similar language approved by the Commissioner.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.10 General Requirements for Forms.

A. If a carrier embodies a brief description on the filing back of a form, the brief description shall be identical in language with that embodied on the first page of the form.

B. An application, policy, or contract may not require a warranty of the state of health of the insured or that the good health of the insured be a condition precedent to the policy or contract.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.11 Self-Destruction or Self-Inflicted Injury.

A. In any group life insurance policy, or in any provisions in either a life insurance policy or a certificate relating to additional disability benefits or to additional benefits in the event of death by accident or accidental means:

(1) If the insurer desires to exclude self-destruction or self-inflicted injury, or both, regardless whether intentional or unintentional, language such as “self-destruction and/or self-inflicted injury, intentional or unintentional” or “self-destruction and/or self-inflicted injury, voluntary or involuntary”, should be used.

(2) If the insurer desires to exclude only suicide or intentional self-inflicted injury, or both, language such as “suicide”, “intentional self-destruction”, “voluntary self-destruction”, “intentional self-inflicted injury”, and/or “voluntary self-inflicted injury” should be used. The insurer, at its option, may also add the language “while sane or insane”.

B. In nonprofit health service plan forms and health insurance forms, including certificates of health insurance issued by fraternal benefit societies, the carrier may not exclude unintentional self-destruction or unintentional self-inflicted injury, but may exclude self-destruction or self-inflicted injury by an insane person.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.12 Military Service Exclusion.

A. Except as provided in §B of this regulation, a contract shall provide for a refund of premium upon request of the policyholder of pro rata unearned premium for any period during which the insured is not covered if:

(1) Coverage terminates for an individual when the individual enters military service; or

(2) The contract excludes any coverage while the individual is in military service.

B. The refund of premium requirement described in §A of this regulation does not apply to:

(1) A group contract;

(2) An individual contract that contains a military exclusion that applies only to loss resulting from military service while in the military service;

(3) An individual life insurance contract that provides for automatic reinstatement:

(a) Upon discharge from military service; or

(b) Within a stated period not exceeding 6 months after discharge; or

(4) An individual health insurance or nonprofit health service plan contract, if:

(a) The contract is a noncancellable contract or a guaranteed renewable contract; and

(b) The contract provides for automatic reinstatement:

(i) Upon discharge from military service; or

(ii) Within a stated period not exceeding 6 months after discharge.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.13 Prohibited Coverage.

A. Health Insurance Coverage Prohibited in Individual Life Insurance Policies. An ordinary or industrial life insurance policy may not include a health insurance benefit, except for the following types of benefits:

(1) Long-term care coverage;

(2) Accidental death and dismemberment coverage;

(3) Waiver of premium for permanent disability coverage;

(4) Acceleration of death benefit for terminal illness or chronic condition;

(5) Benefits for a second opinion for health conditions specified in the policy; or

(6) Benefits that:

(a) Provide a lump-sum benefit for a disease specified in the policy; and

(b) Meet the requirements established by the Commissioner under Insurance Article, §15-109, Annotated Code of Maryland.

B. Natural Death Benefit Prohibited in Individual Health Insurance Policies.

(1) Except as provided in §B(2) of this regulation, a health insurance policy subject to Insurance Article, Title 15, Subtitle 2, Annotated Code of Maryland, or any supplementary benefit under such a policy, may not provide a natural death benefit.

(2) A disability income policy may provide a survivor benefit, provided the survivor benefit does not exceed 3 times the last full monthly disability income benefit.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.14 Standard Nonforfeiture Value Method.

The expression “standard nonforfeiture value method” is acceptable for the description of the method of determining a cash value by deducting from the present value of future benefits, the present value of future nonforfeiture factors or adjusted premiums. When using this expression, it is necessary to state the amount of the nonforfeiture factor for the particular policy. If the nonforfeiture factor is identical with the statutory adjusted premium, the following language is acceptable if applicable: “The cash value under this policy as of any policy anniversary is the amount computed in accordance with the standard nonforfeiture value method using the adjusted premium as defined in the laws of the State in which this policy is delivered”.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.15 Recommendations of National Association of Insurance Commissioners.

The Commissioner shall be guided by recommendations made by a subcommittee of the National Association of Insurance Commissioners in those instances where:

A. The question of the computation of minimum cash values for a particular type of policy or type of insurance coverage has been made the subject of a study by the subcommittee of the National Association of Insurance Commissioners; and

B. Maryland does not have a specific regulation covering the question described in §A of this regulation.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.16 Use of Dividends.

In a participating life insurance policy or certificate, if dividends may be used to purchase additional term or paid-up insurance, the policy shall specify the basis of the maximum charge for the purchase of this insurance.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.17 Riots and Altercations.

A. Life Insurance. If a life insurance form excludes liability for injury or accidental death arising out of:

(1) A riot, the exclusion shall be confined to cases in which the insured is participating in the riot; and

(2) An altercation, the exclusion shall be confined to cases in which the insured provoked the altercation.

B. Health Insurance. Exclusions or limitations for riots or altercations in health insurance and nonprofit health service plan contracts shall comply with the applicable provisions found in COMAR 31.10.25.05A, COMAR 31.10.28.03A, and COMAR 31.11.10.06A.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.17.18 Health Insurance—Pre-Existing Condition Exclusions.

For health insurance contracts or contracts issued by a nonprofit health service plan, a carrier may not impose a pre-existing condition exclusion that exceeds 1 year if the application does not include medical questions or health history questions.

History

Administrative History: Effective date: June 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01 and .02I amended effective September 23, 1985 (12:19 Md. R. 1848)
Administrative History: Regulation .01 amended effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:14 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.45 to COMAR 31.04.17 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 25, 2005 (32:8 Md. R. 743)
Administrative History: Regulation .03M amended effective October 1, 2019 (46:17 Md. R. 727)
Administrative History: Regulation .03O adopted effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .13A amended effective October 3, 2011 (38:20 Md. R. 1205)
Authority: Insurance Article, §§2-109, 8-433(a), 12-203(a)(1)(i) and (2) and (b), 13-110(a), 14-109(3)(iv), 14-110(a)(2)(iii)1, 14-126, 14-405(b)(8) and (9), 14-410(c), 15-904, and 16-504(e), Annotated Code of Maryland

COMAR 31.04.18.01 Applicability.

These regulations are applicable to a person subject to the notification or registration requirements of the Maryland Insurance Acquisition and Disclosure Act under Insurance Article, Title 7, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affiliate” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.

(2) “Control”, “controlling”, “controlled by”, or “under common control with” means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a person, through ownership of voting securities or of securities convertible into voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, whether or not the power is exercised or sought to be exercised unless the power is the result of an official position with or corporate office held by the person.

(3) Enterprise Risk.

(a) “Enterprise risk” means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole.

(b) “Enterprise risk” includes anything that would:

(i) Cause the insurer’s risk-based capital to fall to or below a company action level under Insurance Article, Title 4, Subtitle 3, Annotated Code of Maryland; or

(ii) Cause the insurer to be in a hazardous financial condition under Insurance Article, §9-102, Annotated Code of Maryland.

(4) “Executive officer” means the chief executive officer, president, chief operating officer, chief financial officer, treasurer, secretary, controller, and any other individual performing functions corresponding to those performed by the foregoing officers under any other title.

(5) “Extraordinary dividend” or “extraordinary distribution” has the meaning stated in the Insurance Article, §7-706(b), Annotated Code Maryland.

(6) “Form A” means the “Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer” form filed pursuant to Insurance Article, §7-304, Annotated Code of Maryland, and Regulation .08 of this chapter.

(7) “Form B” means the “Insurance Holding Company System Annual Registration Statement” form filed pursuant to Insurance Article, §7-601, Annotated Code of Maryland, and Regulation .09 of this chapter.

(8) “Form C” means the “Summary of Changes to Registration Statement” form filed pursuant to Insurance Article, §7-601, Annotated Code of Maryland, and Regulation .10 of this chapter.

(9) “Form D” means the “Prior Notice of a Transaction” form filed pursuant to Insurance Article, §7-703, Annotated Code of Maryland, and Regulation .12 of this chapter.

(10) “Form E” means the “Pre-Acquisition Notification Form Regarding the Potential Competitive Impact of a Proposed Merger or Acquisition by a Non-Domiciliary Insurer Doing Business in this State or by a Domestic Insurer” form filed pursuant to Insurance Article, §7-303(a) or 7-403(a), Annotated Code of Maryland, and Regulation .07 of this chapter.

(11) “Form F” means the “Enterprise Risk Report” form filed pursuant to Insurance Article, §7-603(h)(1), Annotated Code of Maryland, and Regulation .13 of this chapter.

(12) “Insurance holding company” means a person that directly or indirectly controls an insurer or controls a person that controls an insurer.

(13) “Insurance holding company system” means two or more affiliates, at least one of which is an insurer.

(14) “Lead state commissioner” means the lead state insurance commissioner of the insurance holding company system as determined by the procedures in the NAIC Financial Analysis Handbook.

(15) “NAIC” means the National Association of Insurance Commissioners.

(16) “Ordinary dividend” means any dividend or distribution of cash or other property with a fair market value that when combined with the fair market value of any other dividends or distributions made in the preceding 12 months is not an extraordinary dividend as defined in Insurance Article, §7-706(b), Annotated Code Maryland.

(17) “Subsidiary” means an affiliate of a person that, directly or indirectly, through one or more intermediaries, is controlled by that person.

(18) “Troubled insurer” means an insurer that is in or moving towards a financial position that subjects its policyholders, claimants and other creditors to greater-than-normal financial risk, including the possibility that the company may not maintain compliance with statutory capital and/or surplus requirements.

(19) “Ultimate controlling person” means the person within an insurance holding company system that is not controlled by any other person.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.03 Adequacy of Surplus.

The factors set forth in Insurance Article, §7–105(a), Annotated Code of Maryland, are not intended to be an exhaustive list for use in determining whether an insurer’s assets and surplus are reasonable in relation to the insurer’s outstanding liabilities and adequate to meet its financial needs. In applying the factors set forth in Insurance Article, §7–105(a), Annotated Code of Maryland, the Commissioner shall adhere to the following principles:

A. The Commissioner may not deem any single factor as necessarily controlling;

B. The Commissioner shall consider the net effect of the factors, plus other factors deemed by the Commissioner to impact the financial condition of the insurer;

C. In comparing the surplus maintained by other insurers, the Commissioner shall consider the extent to which each of the factors varies from company to company; and

D. In determining the quality and liquidity of investments in subsidiaries, the Commissioner shall consider the individual subsidiary and may discount or disallow its valuation to the extent the individual investments so warrant.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.04 Forms — General Requirements.

A. A person required to file a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, shall file the statement, form, or notification as specified in the instructions provided in this chapter, and in accordance with the format, guidelines, and instructions approved by the Commissioner. The forms are not intended to be blank forms which are to be filled in; rather, the forms are intended to be guides in the preparation of the statements. A filed statement shall contain the number and captions of all items outlined in the form, with text addressing each applicable item or a response in the negative where not applicable.

B. A person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter shall provide the filing, including exhibits, documents, information, and all other papers filed as part of the submission:

(1) Electronically to the Commissioner; or

(2) Via personal delivery or mail addressed to The Insurance Commissioner, Maryland Insurance Administration, Attention: Chief Financial Analyst, Examination & Auditing Unit, 200 St. Paul Place, Suite 2700, Baltimore, Maryland 21202.

C. The statement, form, or notification pursuant to §A of this regulation shall:

(1) Be prepared in the English language; and

(2) State monetary values in U.S. currency.

D. Exhibits, documents, information, and all other papers filed as part of the submission pursuant to §A of this regulation shall:

(1) Be easily readable;

(2) Be suitable for review and reproduction;

(3) Designate debits in credit categories and credits in debit categories so as to be clearly distinguishable on reproductions;

(4) Provide a translation into the English language if the exhibit, document, or information is in a foreign language; and

(5) Provide conversion into U.S. currency if the monetary values are in a foreign denomination.

E. The person submitting a filing under §B(2) of this regulation:

(1) Shall prepare the statements on 8-1/2 x 11 inch paper;

(2) May bind at the top or the top left-hand corner of the paper; and

(3) May provide the exhibits, documents, information, and all other papers filed as part of the submission, unless specifically prepared for the filing, in their original size paper.

F. A statement, form, or notification filed pursuant to Insurance Article, Title 7, Annotated Code of Maryland, shall be:

(1) Signed in the manner prescribed on the form; and

(2) Accompanied by a copy of the power of attorney or other authority if the signature of any person is affixed pursuant to a power of attorney or other similar authority.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.05 Forms — Incorporation by Reference, Summaries, and Omissions.

A. A person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter may:

(1) Incorporate by reference in an answer or partial answer to:

(a) Information required in previously submitted or current submissions of other filings of statements, forms, or notifications pursuant to Insurance Article, Title 7, Annotated Code of Maryland; and

(b) Information contained in any financial statement, annual report, proxy statement, statement filed with a governmental authority, or any other document provided in previously submitted or current submissions of other filings of statements, forms, or notifications pursuant to Insurance Article, Title 7, Annotated Code of Maryland, provided the document is filed as an exhibit to the submission; and

(2) Provide excerpts of documents to be filed as exhibits if the documents are extensive.

B. Exhibits, documents, information, and all other papers filed as part of the submission of a statement, form, or notification filed within 3 years of the current filing pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter may be omitted as exhibits for the current filing.

C. References to exhibits, documents, information, and all other papers filed as part of the submission of prior filings shall:

(1) Clearly and concisely identify the material; and

(2) Specifically indicate that such material is to be incorporated by reference for the current filing.

D. Incorporation by reference pursuant to §§A and C of this regulation may not be used if the incorporation would render the submission of a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter incomplete, vague, or confusing.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.06 Extension of Time to Provide Notification.

A. If it is impractical for a person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, to furnish any required information, document, or report at the time it is required to be filed, the person shall file with the Commissioner a separate document:

(1) Identifying the information, document, or report in question;

(2) Stating why the filing thereof at the time required is impractical; and

(3) Requesting an extension of time for filing the information, document, or report to a specified date.

B. The request for extension shall be deemed granted unless the Commissioner denies the request in writing and within 30 business days of the receipt of the request.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.07 Pre-Acquisition Notification.

A. If a domestic insurer, including any person controlling a domestic insurer, is proposing a merger or acquisition pursuant to Insurance Article, §7–303(a), Annotated Code of Maryland, that person shall file with the Commissioner, at least 30 days before a transaction is proposed to become effective, a Form E, in accordance with the format, guidelines, and instructions approved by the Commissioner.

B. The acquiring person in an acquisition subject to Insurance Article, §7-403, Annotated Code of Maryland, shall file with the Commissioner, at least 30 days before the acquisition is proposed to become effective, a Form E, in accordance with the format, guidelines, and instructions approved by the Commissioner.

C. Upon request and in addition to the information provided in §A or B of this regulation, the Commissioner may require the opinion of an economist about the competitive impact of the acquisition or merger in the State, together with a summary of the education and experience of the economist indicating the economist’s ability to make an informed opinion pursuant to Insurance Article, §7–403(c)(2)(ii), Annotated Code of Maryland.

Cross References

31.04.18.02B(10)

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.08 Statement of Filing for Acquisition of Control of a Domestic Insurer.

A. A person seeking to acquire control of a domestic insurer pursuant to Insurance Article, §7–304, Annotated Code of Maryland, shall file with the Commissioner and provide a copy to the domestic insurer a Form A at least 60 days before a transaction is proposed to become effective, in accordance with the format, guidelines, and instructions approved by the Commissioner.

B. If any material change occurs in the facts set forth in the statement filed with the Commissioner and provided to the insurer in the Form A, an amendment, together with copies of any documents or other materials necessary to describe the amendment, shall be filed with the Commissioner prior to the Commissioner’s disposition on the application, and provided to the insurer within the earlier of 2 business days after:

(1) The change occurs; or

(2) The person that filed the statement learns of the change.

Cross References

31.04.18.02B(6)

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.09 Annual Registration Statement.

A. A person required to file an annual registration statement pursuant to Insurance Article, §7–601, Annotated Code of Maryland, shall file with the Commissioner a Form B, in accordance with the format, guidelines, and instructions approved by the Commissioner.

B. Unless extended by the Commissioner for good cause, the Form B shall be filed within 15 days after the insurer becomes subject to registration and, for each subsequent year, annually on or before May 1.

C. No information need be disclosed pursuant to §A of this regulation if the information is not material. Sales, purchases, exchanges, loans, or extensions of credit, investments, or guarantees involving 1/2 of 1 percent (.5 percent) or less of an insurer’s admitted assets as of the 31st day of the December next preceding may not be deemed material for the purposes of this section.

Cross References

31.04.18.02B(7)

31.04.18.10

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.10 Summary of Changes to Registration Statement and Pre-Divestiture Notification.

A person required to file an annual registration statement pursuant to Insurance Article, §7–601, Annotated Code of Maryland, and Regulation .09 of this chapter shall file with the Commissioner a Form C, in accordance with the format, guidelines, and instructions approved by the Commissioner, annually on or before May 1.

Cross References

31.04.18.02B(8)

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.11 Disclaimers and Termination of Registration.

A. A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not upon the taking of some proposed action, control another person (hereinafter referred to as the “subject”) shall contain the following information:

(1) The number of authorized, issued, and outstanding voting securities of the subject;

(2) With respect to the person whose control is denied and all affiliates of such person, the number and percentage of shares of the subject’s voting securities which are held of record or known to be beneficially owned, and the number of shares concerning which there is a right to acquire, directly or indirectly;

(3) All material relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of such person; and

(4) A statement explaining why the person should not be considered to control the subject.

B. A request for termination of registration shall be deemed to have been granted unless the Commissioner, within 30 days after receipt of the request, notifies the registrant otherwise.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.12 Transactions Subject to Prior Notice — Notice Filing and Standards.

A. A person filing notice with the Commissioner of a proposed transaction pursuant to Insurance Article, Title 7, Subtitle 7, Annotated Code of Maryland, shall file a Form D, in accordance with the format, guidelines, and instructions approved by the Commissioner.

B. Pursuant to Insurance Article, §7-702(6), Annotated Code of Maryland, agreements, including but not limited to management agreements, service contracts, tax allocation agreements, or cost-sharing agreements shall include as applicable, the following provisions:

(1) Identification of the person providing services and the nature of such services, managerial responsibilities, or services to be performed;

(2) The methods to allocate costs;

(3) Timely settlement, not less frequently than on a quarterly basis and compliance with the requirements in the NAIC Accounting Practices and Procedure Manual regarding expense allocation;

(4) The prohibition of the advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement;

(5) The statement that the insurer will maintain oversight for functions provided to the insurer by the affiliate and that the insurer will monitor services annually for quality assurance;

(6) The definition of books and records of the insurer to include all books and records developed or maintained under or related to the agreement;

(7) The statement that all books and records of the insurer are and remain the property of the insurer and are subject to control of the insurer;

(8) The statement that all funds and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer, and are subject to the control of the insurer;

(9) The standards for termination of the agreement with and without cause;

(10) The indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services;

(11) The statement that, if the insurer is placed in receivership or seized by the Commissioner pursuant to Insurance Article, §9-212, Annotated Code of Maryland:

(a) All of the rights of the insurer under the agreement extend to the receiver or the Commissioner; and

(b) All books and records will immediately be made available to the receiver or the Commissioner, and shall be turned over to the receiver or the Commissioner immediately upon the receiver’s or the Commissioner’s request;

(12) The statement that if the insurer is placed in receivership pursuant to Insurance Article, §9-212, Annotated Code of Maryland the affiliate has no automatic right to terminate the agreement; and

(13) The statement that the affiliate will continue to maintain any systems, programs, or other infrastructure notwithstanding a seizure by the Commissioner pursuant to Insurance Article, §9-212, Annotated Code of Maryland, and will make them available to the receiver, for so long as the affiliate continues to receive timely payment for services rendered.

C. In determining whether a transaction is fair and reasonable pursuant to Insurance Article, §7-702, Annotated Code of Maryland, the Commissioner may consider:

(1) Services received or provided;

(2) Whether the services provided by the affiliated entity are:

(a) Only being provided to other affiliated entities; or

(b) Being provided to both affiliated and nonaffiliated entities;

(3) The cost of services received or provided, including:

(a) Actual cost;

(b) Market cost;

(d) Profit margin; and

(e) The allocation method used to share:

(i) Costs of services received or provided; and

(ii) Federal income tax expenses and credits among parties to consolidated federal income tax filing agreements; and

(4) Other factors deemed necessary by the Commissioner to determine if the terms of the transaction are fair and reasonable.

Cross References

31.04.18.02B(9)

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.13 Enterprise Risk Report.

The ultimate controlling person of an insurer required to file an enterprise risk report under Insurance Article, §7–603(h)(1), Annotated Code of Maryland, shall:

A. Unless extended by the Commissioner for good cause, by July 1 of each year, file with the Commissioner a properly executed Form F in accordance with the format, guidelines, and instructions approved by the Commissioner; and

B. File any other document or information that the Commissioner considers necessary to identify the significant risks within the insurance holding company system that could pose enterprise risk to the insurer.

Cross References

31.04.18.02B(11)

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.14 Extraordinary Dividends and Other Distributions.

A. Pursuant to Insurance Article, §7-706, Annotated Code of Maryland, a domestic insurer may not pay an extraordinary dividend or make any other extraordinary distribution to its shareholders unless:

(1) The insurer provides notice of the declaration to the Commissioner at least 30 days before the declaration is made; and

(2) The Commissioner has approved or not disapproved the declaration within 30 days following the notice.

B. The insurer shall file a written request for approval of extraordinary dividends or any other extraordinary distribution to shareholders and shall include the following in the request:

(1) The amount of the proposed dividend or distribution;

(2) The date proposed for the payment of the dividend or the distribution;

(3) A statement as to whether the dividend is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation;

(4) The copy of the calculations determining that the proposed dividend is extraordinary pursuant to the definition in Insurance Article, §7-706(b), Annotated Code of Maryland, which shall include the following information:

(a) The amounts, dates, and form of payment of all dividends or distributions of cash or other property stated at fair market value paid within the preceding 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought;

(b) Surplus as regards policyholders (total capital and surplus) as of the 31st day of December of the preceding year;

(i) If the insurer is a life insurer, the net gain from operations of the insurer not including realized capital gains for the 12-month-period ending December 31 of the preceding year or pro rata distributions of any class of the insurer’s own securities; or

(ii) If the insurer is not a life insurer, the net investment income not including realized capital gains for the 12-month period ending December 31 of the preceding year or pro rata distributions of any class of the insurer’s own securities; and

(d) If the insurer is not a life insurer, the net investment income from the 3 calendar years prior to the preceding calendar year, not including realized capital gains, minus dividends paid to stockholders in the preceding 3 calendar years;

(5) A balance sheet and statement of income for the period intervening from the last annual statement filed with the Commissioner and the end of the month preceding the month in which the request for dividend approval is submitted; and

(6) A brief statement as to the effect of the proposed dividend upon the insurer’s surplus and the reasonableness of surplus in relation to the insurer’s outstanding liabilities and the adequacy of surplus relative to the insurer’s financial needs.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

COMAR 31.04.18.15 Group Capital Calculation.

A. Where an insurance holding company system has previously filed the annual group capital calculation required under Insurance Article, §7–603(i), Annotated Code of Maryland, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination based upon that filing that the insurance holding company system:

(1) Has annual direct written and unaffiliated assumed premium (including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program) of less than $1,000,000,000;

(2) Does not include an insurer that is domiciled outside of the United States or one of its territories;

(3) Does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework;

(4) Attests that no material changes in the transactions between insurers and non-insurers in the group have occurred since the last filing of the annual group capital; and

(5) Does not include a non-insurer that poses a material financial risk to the insurer’s ability to honor policyholder obligations.

B. Where an insurance holding company system has previously filed the annual group capital calculation required under Insurance Article, §7–603(i), Annotated Code of Maryland, the lead state commissioner may accept a limited group capital filing in lieu of the group capital calculation if the insurance holding company system:

(2) Does not include an insurer that is domiciled outside of the United States or one of its territories;

(3) Does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework;

(4) Attests that no material changes in the transactions between insurers and non-insurers in the group have occurred since the last filing of the annual group capital; and

(5) Does not include a non-insurer that poses a material financial risk to the insurer’s ability to honor policyholder obligations.

C. For an insurance holding company that has previously met an exemption with respect to the group capital calculation pursuant to §A or B of this regulation, the lead state commissioner may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the group capital calculation instructions adopted by the NAIC, if:

(1) Any insurer within the insurance holding company system is in a risk-based capital action or control level event as set forth in Insurance Article, §§4-305 through 4-308, Annotated Code of Maryland, or a similar standard for a non-U.S. insurer;

(2) Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in Insurance Article, §9-102, Annotated Code of Maryland; or

(3) Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer, as determined by the lead state commissioner based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests.

D. A non-U.S. jurisdiction is considered to “recognize and accept” the group capital calculation, as described in Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland, if:

(1) It satisfies either of the following criteria:

(a) The non-U.S. jurisdiction recognizes the U.S. state regulatory approach to group supervision and group capital, by providing confirmation by a competent regulatory authority, in such jurisdiction, that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the lead state and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-U.S. jurisdiction; or

(b) Where no U.S. insurance groups operate in the non-U.S. jurisdiction, that non-U.S. jurisdiction indicates formally in writing to the lead state with a copy to the International Association of Insurance Supervisors that the group capital calculation is an acceptable international capital standard; and

(2) The non-U.S. jurisdiction provides confirmation by a competent regulatory authority in such jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the lead state commissioner in accordance with a memorandum of understanding or similar document between the commissioner and such jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC, provided that the Commissioner shall determine in consultation with the NAIC committee process that the requirements of such memorandum are in force.

E. A list will be published through the NAIC committee process that:

(1) Identifies non-U.S. jurisdictions that are considered to “recognize and accept” the group capital calculation, as described in Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland to assist the lead state commissioner in determining which insurers shall file an annual group capital calculation;

(2) Clarifies those situations in which a jurisdiction is exempted from filing under Insurance Article, §7–603(i)(2)(iv)-(v), Annotated Code of Maryland; and

(3) To assist with a determination under Insurance Article, §7–603(i)(3), Annotated Code of Maryland, identify whether a jurisdiction that is exempted under Insurance Article, §7–603(i)(2)(iii)-(v) , Annotated Code of Maryland requires a group capital filing for any U.S. based insurance group’s operations in that non-U.S. jurisdiction.

F. For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement of §D(1)(b) of this regulation will serve as support for recommendation to be published as a jurisdiction that “recognizes and accepts” the group capital calculation through the NAIC committee process.

G. If the lead state commissioner makes a determination pursuant to Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland that differs from the NAIC List, the lead state commissioner shall provide thoroughly documented justification to the NAIC and other states.

H. Upon determination by the lead state commissioner that a non-U.S. jurisdiction no longer meets one or more of the requirements to “recognize and accept” the group capital calculation, as described in Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland, the lead state commissioner may provide a recommendation to the NAIC that the non-U.S. jurisdiction be removed from the list of jurisdictions that “recognize and accepts” the group capital calculation.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision effective December 8, 1993 (20:26 Md. R. 2024)
Administrative History: Regulations .01 and .02 adopted effective March 28, 1994 (21:6 Md. R. 467)
Administrative History: ——————
Administrative History: Chapter recodified from 09.31.01 to COMAR 31.04.18 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02B amended effective January 6, 2025 (51:26 Md. R. 1187)
Administrative History: Regulations .03—.14 adopted effective November 7, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .15 adopted effective January 6, 2025 (51:26 Md. R. 1187)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917 and Title 7, Annotated Code of Maryland

31.04.19 Filing of Forms Under File and Use Method

COMAR 31.04.19.01 Applicability and Scope.

This chapter applies to the submission of any form required to be filed under Insurance Article, §12-203(b), Annotated Code of Maryland.

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.19.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accidental death policy” means a health insurance policy that limits benefits under it to benefits that are payable upon the accidental death of an insured.

(2) “Accidental death and dismemberment policy” means a health insurance policy that limits benefits under it to benefits that are payable upon the accidental death or dismemberment of an insured.

(3) “Administration” means the Maryland Insurance Administration.

(4) “Annuity” has the meaning defined in Insurance Article, §1-101, Annotated Code of Maryland.

(5) Application.

(a) “Application” means the form used to apply for insurance.

(b) “Application” includes:

(i) Group applications and enrollment forms; and

(ii) Individual applications.

(6) Blanket Health Insurance.

(a) “Blanket health insurance” has the meaning stated in Insurance Article, §15-305, Annotated Code of Maryland.

(b) “Blanket health insurance” does not include a contract or policy for which a covered individual is required to complete an application.

(7) “Commissioner” means the Maryland Insurance Commissioner.

(8) “Credit life insurance” has the meaning stated in Insurance Article, §13-101, Annotated Code of Maryland.

(9) Employer Retrospective Premium Arrangement.

(a) “Employer retrospective premium arrangement” means a rider to an employer group health insurance contract that provides that the employer may pay a negotiated reduced premium during the plan year, in accordance with a methodology approved by the Administration, with an adjustment at the end of the plan year based on the actual experience of the employer's group.

(b) “Employer retrospective premium arrangement” does not include any rider used with a small employer health benefit plan.

(10) Expense Incurred.

(a) “Expense incurred” means the benefits payable under the health insurance contract are based on the medical expenses the insured incurs.

(b) For the purposes of this chapter, a health insurance contract that includes both expense incurred benefits and indemnity benefits shall be considered to be written on an expense incurred basis.

(11) “File and use method” means the method prescribed by the Commissioner which permits an insurer to file forms prescribed in Regulation .05 of this chapter and begin using the form at the earlier of:

(a) 30 days after the date the forms are received by the Commissioner, provided the forms are not disapproved by the Commissioner within this 30 day period; or

(b) The date the insurer receives notice from the Commissioner that the filing has been accepted.

(12) “Final disposition” means approval, disapproval or withdrawal of a form submitted for approval.

(13) Form.

(a) “Form” means:

(i) A policy;

(ii) A certificate;

(iii) A contract;

(iv) A rider;

(v) An endorsement;

(vi) An amendment; or

(vii) An application.

(b) “Form” includes:

(i) An insert page to a contract, if the insurer complies with the insert page filing requirements for contractsS on an insert page basis found in COMAR 31.04.17.04B; and

(ii) A section of a contract, if the insurer complies with the section filing requirements for contracts on a sectional basis found in COMAR 31.04.17.04C.

(14) “Health benefit plan” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(15) “Health insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(16) “Indemnity” means the benefits payable under the health insurance contract are flat amounts that are not related to the expenses the insured incurs, such as a hospital indemnity contract that pays a flat fee for each day the insured is confined in a hospital regardless of the actual expenses the insured incurs during the hospital confinement.

(17) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(18) “Life insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(19) “Long term care insurance” has the meaning stated in Insurance Article, §18-101, Annotated Code of Maryland.

(20) “Medical stop-loss insurance” has the meaning stated in Insurance Article, §15-129(a), Annotated Code of Maryland.

(21) “Medicare supplement policy” has the meaning stated in Insurance Article, §15-901, Annotated Code of Maryland.

(22) “Noncompliant” means a form is not in compliance with Maryland statutes and regulations.

(23) “Prior approval method” means the method that insurers use to file forms with the Commissioner in which the forms may not be used in Maryland by the insurer until the forms are approved by the Commissioner.

(24) “Small employer” has the meaning stated in Insurance Article, §31-101, Annotated Code of Maryland.

(25) “Wholesale life insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.19.03 Filing of Forms for Approval.

Except as otherwise provided in this chapter, the filing of forms shall be in compliance with the requirements under:

A. COMAR 31.04.17 for life and health insurance filings; and

B. COMAR 31.10.01 for health insurance filings.

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.19.04 Submission Requirements for File and Use Method.

A. An insurer may request that a form filing be accepted under a file and use method.

B. The cover letter included with forms filed under the file and use method shall include the following:

(1) A reference line that indicates that the forms are being filed under the file and use method;

(2) A list of the forms included in the submission; and

(3) For each form listed in the cover letter required under §B(2) of this regulation, a cite to the authority to file the form under Regulation .05 of this chapter.

C. The use of the file and use method shall be limited in accordance with the types of forms specified in Regulation .05 of this chapter.

D. An insurer may not combine in the same submission:

(1) Forms filed under the file and use method; and

(2) Forms filed under the prior approval method.

E. A request under a file and use method shall include a signed certification from a responsible officer that, to the best of the officer's knowledge and belief, the forms comply with applicable statutes and regulations.

F. A filing made under a file and use method shall be subject to the same filing fee requirements applicable to filings made under a prior approval method.

G. An insurer may issue a form for delivery in Maryland that was filed under the file and use method at the earlier of the following dates:

(1) 30 days after the date the form has been received by the Commissioner, provided the Commissioner has not previously disapproved the filing; or

(2) The date the insurer receives written notice from the Commissioner that the filing has been accepted under the file and use method.

H. An insurer may not use the file and use method before the insurer has had a certificate of authority to write the same type of coverage in Maryland for at least 12 months.

I. An insurer may not use the file and use method to file a form in Maryland if:

(1) The form has previously been disapproved by the Commissioner;

(2) The form has been previously filed for approval with the Commissioner under the prior approval method and is still pending final disposition with the Commissioner; or

(3) The Commissioner has decided that the form has been previously withdrawn by the insurer in accordance with COMAR 31.04.17.05.

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.19.05 Types of Forms Used on a File and Use Method.

A. The forms listed in §B of this regulation are the only forms that may be used on a file and use basis.

B. The following life insurance, health insurance, and annuity forms may be filed under the file and use method:

(1) Group life insurance policies and certificates, except for group credit life insurance policies and certificates;

(2) Endorsements, amendments, and riders to be used with group life insurance policies and certificates, except for endorsements, amendments, and riders to be used with group credit life insurance policies and certificates;

(3) Wholesale life insurance policies;

(4) Endorsements, amendments, and riders to be used with wholesale life insurance policies;

(5) Accidental death benefit riders to be used with individual life insurance policies;

(6) Waiver of premium riders to be used with individual life insurance policies;

(7) Accidental death and dismemberment riders to be used with individual life insurance policies;

(8) Riders to be used with individual life insurance policies that provide coverage to the spouse or dependent children of the insured;

(9) Guaranteed insurability option riders to be used with individual life insurance policies;

(10) Group annuity contracts and certificates, including variable and nonvariable group annuity contracts and certificates;

(11) Endorsements, amendments, and riders to be used with group annuity contracts and certificates;

(12) Individual retirement account (IRA) endorsements to be used with individual fixed annuity contracts or with individual variable annuity contracts;

(13) Tax sheltered annuity (TSA) endorsements to be used with:

(a) Individual fixed annuity contracts; or

(b) Individual variable annuity contracts;

(14) Medical stop-loss insurance;

(15) Group accidental death policies and certificates;

(16) Group accidental death and dismemberment policies and certificates;

(17) Group travel health insurance policies and certificates, except for the following:

(a) Any form that includes lost baggage benefits;

(b) Any form that includes a trip cancellation benefit that is payable for a reason other than the illness or death of:

(i) The insured;

(ii) A member of the insured's family; or

(iii) One or more of the insured's travel companions; or

(c) Any form that contains any other property or casualty type benefit not included in §B(17)(a) and (b) of this regulation;

(18) Group health insurance policies and certificates that:

(a) Limit coverage to losses due to accident; and

(b) Do not pay benefits on an expense-incurred basis;

(19) Employer retrospective premium arrangements;

(20) Blanket health insurance policies that limit benefits to accidental death benefits;

(21) Blanket health insurance policies that limit benefits to accidental death and dismemberment benefits;

(22) Blanket health insurance policies that limit benefits to travel benefits;

(23) Blanket health insurance policies that:

(a) Limit coverage to losses due to accident; and

(b) Do not pay benefits on an expense-incurred basis; and

(24) Applications, except applications for:

(a) Medicare supplement policies;

(b) Long-term care insurance;

(d) Small employer health benefit plans.

Cross References

31.04.19.02B(11)

31.04.19.04B(3)

31.04.19.04C

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.19.06 Use of Noncompliant Forms.

A. If an insurer uses a form which becomes effective under a file and use method and the form is found by the Commissioner to be noncompliant, the Commissioner may:

(1) Disapprove the form by:

(a) Giving notice of the disapproval;

(b) Showing cause for the disapproval; and

(2) Impose a penalty as provided under Insurance Article, §4-113, Annotated Code of Maryland.

B. The Commissioner may remove file and use authority from an insurer upon a finding that the insurer has made inappropriate or noncompliant filings under this method with such frequency as to constitute a business practice.

History

Administrative History: Effective date: July 17, 2006 (33:14 Md. R. 1165)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Administrative History: Regulation .05B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

31.04.20 Market Conduct Actions

COMAR 31.04.20.01 Applicability.

A. This chapter establishes the process and procedures for market conduct actions.

B. This chapter does not apply to the examination or investigation of:

(1) A person's financial condition as described in Insurance Article, Titles 5, 6, 7, and 9, Annotated Code of Maryland, as well as COMAR 31.04, 31.05, and 31.06; or

(2) An insurance producer.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.02 Scope.

Nothing in this chapter limits the Commissioner's authority to conduct an analysis, investigation, or examination, or to issue orders pursuant to law. All applicable provisions, including the confidentiality provisions, of Insurance Article, Annotated Code of Maryland, apply to market conduct actions.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Analysis” has the meaning stated in Insurance Article, §2-205(a), Annotated Code of Maryland.

(2) “Business practices” means the operations, policies, procedures and other activities or administrative methods used by a person to conduct business.

(3) “Commissioner” means the Insurance Commissioner of Maryland or the Insurance Commissioner's designee.

(4) “Complaint” means a written or documented oral communication expressing dissatisfaction with a person.

(5) “Market conduct action” means any of the full range of activities that the Commissioner may initiate to assess the business practices of a person or persons, or the insurance market, including a market conduct analysis, market conduct investigation, or market conduct examination.

(6) “Market conduct analysis” means an evaluation conducted whenever the Commissioner considers it advisable to identify or investigate the business practices of one or more persons, or the insurance market, from filed schedules, surveys, required reports, or other sources of information.

(7) “Market conduct examination” means an inspection of the accounts, records, documents, or transactions of a person to develop a detailed understanding of the person's business practices to evaluate compliance with State law.

(8) “Market conduct investigation” means a process used by the Commissioner to determine if a person has violated State law in that person's business practices.

(9) “Person” means an insurer or other entity subject to regulation by the Commissioner and authorized to conduct business in this State.

(10) “Proposed market conduct examination report” means the completed market conduct examination report that is required under Regulation .07 of this chapter.

Cross References

31.16.10.02B(9)

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.04 Market Conduct Action.

A. Whenever the Commissioner has the authority to conduct an analysis, examination, or investigation of a person's business practices, the Commissioner may conduct a market conduct action.

B. The Commissioner may conduct a market conduct action:

(1) Based on a complaint;

(2) As authorized by law;

(3) Whenever the Commissioner considers it is advisable; or

(4) With other states.

C. If the Commissioner determines information is needed from a person to conduct a market conduct action, in accordance with Regulation .05 of this chapter:

(1) The Commissioner shall request the information; and

(2) The person shall provide the information.

D. The Commissioner may participate in a market conduct action with one or more other states to determine if a Maryland law has been violated by the person subject to the market conduct action.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.05 Information.

A. The Commissioner may request accounts, records, documents, files, or other information needed to complete a market conduct action.

B. The Commissioner may include a reference to the applicable law pertaining to the request.

C. The Commissioner may request information through:

(1) A survey;

(2) An interrogatory;

(3) An interview; or

(4) Any other procedure identified by the Commissioner.

D. Whenever a person receives a request from the Commissioner for information, the person shall provide the requested information:

(1) Within the time specified by the Commissioner, unless an extension has been granted by the Commissioner in accordance with §§G and H of this regulation; and

(2) In the manner specified by the Commissioner.

E. When the person submits the information to the Commissioner, the person shall provide written certification, signed by an individual with authority to bind the person providing the response, that the:

(1) Information is, to the best of that individual's knowledge, information, and belief, a full, complete, and truthful response to the Commissioner's request; and

(2) Individual making the certification has undertaken an adequate inquiry to make the required certification.

F. If the person fails to provide the certification required under §E of this regulation, the absence of this certification:

(1) Does not relieve the person responding to a request of the Commissioner of the duty to provide a full, complete, and truthful response to the Commissioner's request; and

(2) Shall constitute an explicit representation by the person that the response is full, complete, and truthful.

G. A person may submit a written request, stating the reason for the request, to the Commissioner to extend the time for the submission of information:

(1) For a market conduct analysis or market conduct investigation, after receipt of the request specified in §D of this regulation; or

(2) For a market conduct examination, after receipt of the notice specified in Regulation .06G of this chapter.

H. If the Commissioner receives the request pursuant to §G of this regulation, the Commissioner shall:

(1) Grant an extension; or

(2) Notify the person that the request to extend the time is denied.

Cross References

31.04.20.04C

31.04.20.06F(2)

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.06 Market Conduct Examination.

A. The Commissioner shall conduct a market conduct examination in accordance with this regulation.

B. The Commissioner shall notify the person subject to the market conduct examination, in writing, that a market conduct examination has commenced.

C. The Commissioner's notification that a market conduct examination has commenced shall:

(1) Specify the lines of insurance, scope, intent, and period covered by the market conduct examination;

(2) Provide the name and contact information of the Commissioner; and

(3) Provide any other information the Commissioner considers relevant.

D. The person notified under §B of this regulation shall give written notice to the Commissioner of the individual who:

(1) Has the authority and responsibility to respond to the Commissioner's request for accounts, records, documents, files, or other information needed in order to complete the market conduct examination; and

(2) Will coordinate on behalf of the person the market conduct examination with the Commissioner.

E. Following the notice provided under §§B and C of this regulation, the Commissioner shall conduct a conference with the person in a manner determined by the Commissioner to review:

(1) The information the person must provide for the market conduct examination;

(2) The administrative aspects of the market conduct examination, including but not limited to, market conduct examination expenses to be paid by the person examined; and

(3) Any other information the Commissioner considers relevant.

F. After the completion of the conference required in §E of this regulation, the Commissioner:

(1) May provide a written summary of the conference to the person; and

(2) Shall provide written notification of the information the person must provide for the market conduct examination in accordance with Regulation .05 of this chapter.

G. The Commissioner shall notify the person subject to a market conduct examination of the date after which the Commissioner may not accept additional information unless an extension has been granted by the Commissioner in accordance with Regulation .05G and H of this chapter.

H. The Commissioner shall conduct an exit conference with the person subject to the market conduct examination in a manner determined by the Commissioner

I. At the discretion of the Commissioner, a report certified by the insurance supervisory official of another state may be accepted in lieu of conducting a market conduct examination.

Cross References

31.04.20.05G(2)

31.04.20.07A

31.04.20.10B

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.07 Market Conduct Examination Report.

A. Whenever a market conduct examination is conducted pursuant to Regulation .06 of this chapter, the Commissioner shall:

(1) Provide the person with a copy of the draft proposed market conduct examination report;

(2) Allow the person to submit written comments on the draft proposed market conduct examination report within 30 days after the receipt of the draft proposed market conduct examination report, or the period specified by the Commissioner, whichever is longer;

(3) Consider the written comments submitted by the person in finalizing the draft proposed market conduct examination report; and

(4) Include the written comments submitted by the person to the draft proposed market conduct examination report as an attachment to the proposed market conduct examination report.

B. After receipt of the draft proposed market conduct examination report, a person may submit a written request, stating the reason for the request, to the Commissioner to extend the time for the submission of written comments.

C. If the Commissioner receives a request pursuant to §B of this regulation, the Commissioner shall:

(1) Grant an extension; or

(2) Notify the person that the request to extend the time is denied.

D. The Commissioner shall provide the person with a copy of the proposed market conduct examination report.

Cross References

31.04.20.03B(10)

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.08 Commissioner's Actions.

A. Based on the information reviewed during a market conduct analysis the Commissioner may, in the Commissioner's sole discretion:

(1) Broaden the scope and period of the market conduct analysis;

(2) Conduct a market conduct investigation or market conduct examination;

(3) Issue an order; or

(4) Take any other action authorized or reasonably implied by Insurance Article, Annotated Code of Maryland.

B. If the Commissioner conducts a market conduct investigation, the Commissioner may, in the Commissioner's sole discretion, based on the information reviewed during the market conduct investigation:

(1) Broaden the scope and period of the market conduct investigation;

(2) Conduct a market conduct examination;

(3) Issue an order; or

(4) Take any other action authorized or reasonably implied by Insurance Article, Annotated Code of Maryland.

C. If the Commissioner conducts a market conduct examination, the Commissioner may, in the Commissioner's sole discretion, based on the information reviewed during the market conduct examination:

(1) Conduct a market conduct investigation of a particular matter;

(2) Broaden the scope and period of the market conduct examination;

(3) Issue an order; or

(4) Take any other action authorized or reasonably implied by Insurance Article, Annotated Code of Maryland.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.09 Sanctions.

If a person subject to this chapter fails to provide the information requested by the Commissioner in accordance with this chapter, the person may be subject to an administrative fine not exceeding $500 per day, in addition to any other penalty available to the Commissioner.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

COMAR 31.04.20.10 Hearings.

A. A person aggrieved by an order or proposed market conduct examination report may request a hearing in accordance with the provisions of COMAR 31.02.01.

B. Except as otherwise provided by law, a person may not rely on any information not timely provided in accordance with Regulation .06G of this chapter in any hearing held on an order or proposed market conduct examination report.

History

Administrative History: Effective date: April 5, 2010 (37:7 Md. R. 576)
Authority: Insurance Article, §§2-109 and 12-203(d)(2), Annotated Code of Maryland

31.04.21 Payment of Actuarial Review of Rate Filings

COMAR 31.04.21.01 Scope.

A. This chapter applies to the examination of rate filings made pursuant to:

(1) Health-General Article, §19-713, Annotated Code of Maryland;

(2) Insurance Article, Title 11, Subtitles 2 and 3, and §§12-205 and 14-126(a)(2), Annotated Code of Maryland; and

(3) COMAR 31.10.01.02A.

B. This chapter does not apply to the Maryland Automobile Insurance Fund.

History

Administrative History: Effective date: May 16, 2011 (38:10 Md. R. 618)
Authority: Insurance Article, §§2-108, 2-205, 2-208, 11-207(a)(2), 12-205, 14-126(a)(2), and 15-605(c); Health-General Article, §19-713; Annotated Code of Maryland

COMAR 31.04.21.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Actuarial consultant” means a consultant retained by the Commissioner subject to applicable procurement requirements to examine a rate filing.

(2) “Advisory organization” has the meaning stated in Insurance Article, §11-101, Annotated Code of Maryland.

(3) “Carrier” means an authorized insurer, nonprofit health service plan, or health maintenance organization.

(4) “Commissioner” means the Maryland Insurance Commissioner.

(5) “Rating organization” has the meaning stated in Insurance Article, §11-101, Annotated Code of Maryland.

History

Administrative History: Effective date: May 16, 2011 (38:10 Md. R. 618)
Authority: Insurance Article, §§2-108, 2-205, 2-208, 11-207(a)(2), 12-205, 14-126(a)(2), and 15-605(c); Health-General Article, §19-713; Annotated Code of Maryland

COMAR 31.04.21.03 Examination of Rate Filings by an Actuarial Consultant.

A. Whenever the Commissioner considers it advisable, the Commissioner may retain an actuarial consultant to examine a rate filing submitted by an advisory organization, carrier, or rating organization.

B. If the Commissioner retains an actuarial consultant to examine a rate filing submitted by an advisory organization, carrier, or rating organization the Commissioner shall notify the advisory organization, carrier, or rating organization that the Commissioner has retained an actuarial consultant to examine the rate filing.

C. The Commissioner or the actuarial consultant shall make a complete report of the examination in accordance with the provisions of Insurance Article, §2-209, Annotated Code of Maryland.

D. The advisory organization, carrier, or rating organization shall pay the expenses for the actuarial consultant’s examination of a rate filing in accordance with the provisions of Insurance Article, §2-208, Annotated Code of Maryland.

History

Administrative History: Effective date: May 16, 2011 (38:10 Md. R. 618)
Authority: Insurance Article, §§2-108, 2-205, 2-208, 11-207(a)(2), 12-205, 14-126(a)(2), and 15-605(c); Health-General Article, §19-713; Annotated Code of Maryland

31.04.22 Title Insurers

COMAR 31.04.22.01 Applicability.

This chapter applies to a title insurer, title insurance producer, and title agency.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.02 Scope.

This chapter:

A. Establishes the minimum standards and procedures for conducting a review; and

B. Provides for the filing of a review report with the Commissioner.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accounts” means all accounts associated with the principal agent’s title insurance business.

(2) “Appointment” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(3) “Certification” means a written statement signed by the principal agent that the information provided to the title insurer during the annual review is, to the best of the principal agent’s knowledge, information, and belief, full, complete, and truthful and that the principal agent has undertaken an adequate inquiry to make the required certification

(4) “Claim” has the meaning set forth in COMAR 31.15.07.02B(2).

(5) “Commissioner” means the Maryland Insurance Commissioner or the Commissioner’s designee.

(6) “Designated responsible licensed producer” means a licensed insurance producer who is:

(a) Responsible for the principal agent’s compliance with insurance laws, rules, and regulations; and

(b) Listed as a designated or responsible licensed producer on:

(i) The principal agent’s uniform business entity application; or

(ii) The Association/Responsible Individual Designation form filed with the Commissioner.

(7) “Escrow” means the act or process of providing closing services or services under an escrow agreement by a title insurer or a principal agent.

(8) “Escrow account” means an account that contains or has contained trust money deposits or other money that a person entrusts to a title insurer or a principal agent to hold for the benefit of a buyer or borrower in a real estate transaction or for a beneficial owner, in connection with an escrow, settlement, closing, or title indemnification.

(9) “Insurance” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(10) “Insurance business” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(11) “Insurance producer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(12) “Insurer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(13) “Licensed insurance producer” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(14) “Licensee” means a title insurer, title insurance producer, or title insurance agency.

(15) “MAHT” means the Maryland Affordable Housing Trust established under the Housing and Community Development Article, §10-102, Annotated Code of Maryland.

(16) “Principal agent” means a title insurance producer appointed by the title insurer to act on behalf of the title insurer as described in Insurance Article, §10-121(k)(1)(i), Annotated Code of Maryland.

(17) “Report” means the written report required under Insurance Article, §10-121(k), Annotated Code of Maryland, and containing the elements specified by the Commissioner.

(18) “Review” means a review of the underwriting, claims, and escrow practices of each principal agent conducted by a title insurer or its designee.

(19) “Title agency” has the meaning set forth in Insurance Article, §10-125, Annotated Code of Maryland.

(20) “Title insurance” has the meaning set forth in Insurance Article, §1-101, Annotated Code of Maryland.

(21) “Title insurance producer” has the meaning set forth in Insurance Article, §10-101, Annotated Code of Maryland.

(22) “Title insurer” means an insurer authorized by the Commissioner to conduct title insurance business in the State.

(23) “Trust money” has the meaning set forth in Insurance Article, §10-121, Annotated Code of Maryland.

(24) “Underwriting standards” has the meaning set forth in COMAR 31.04.16.02.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.04 Conducting a Review.

A. A title insurer:

(1) Shall, except as provided in §A(4) of this regulation, conduct a review during each calendar year of the underwriting, claims, and escrow practices of each principal agent;

(2) Shall conduct a review during normal business hours;

(3) May not be required to provide advance notice to the principal agent of the beginning of a review; and

(4) May not be required to conduct a review of a principal agent for the calendar year during which the principal agent is initially appointed, if the appointment is made on or after June 30 of that calendar year.

B. The review required under §A of this regulation shall, at a minimum, include:

(1) A determination of whether:

(a) The principal agent is in compliance with the title insurer’s underwriting standards in the State; and

(b) The principal agent’s escrow accounts have been properly reconciled as of the date of the completed review and contain sufficient funds to disburse the trust money from all settlement files necessary to establish the lien, title or interests insured in accordance with title insurance policies issued by the title insurer conducting the review;

(2) A review of the principal agent’s operations to evaluate compliance with the notice requirements under Insurance Article, §22-103, Annotated Code of Maryland, including whether the principal agent:

(a) Inserted the name of each proposed insured as required under Insurance Article, §22-103(a)(1), Annotated Code of Maryland;

(b) Delivered to the buyer or agent or attorney of the buyer immediately upon receipt of the premium, written notice of the name of each insured under the title insurance policy, the face amount of the title insurance policy, the buyer’s right and opportunity to obtain simultaneous title insurance in the buyer’s favor, written notice of the additional premium that will be required for the purchase of simultaneous title insurance in the buyer’s favor; and

(c) Obtained from the buyer a written statement that he or she received the notice referenced in §B(2)(b) of this regulation and a statement that the buyer wants or does not want owner’s title insurance;

(3) A review of the title insurance producer’s or agency’s policy issuing and processing operations;

(4) To the extent that a title insurer delegates the responsibility to the principal agent to handle any aspect of a claim, a review of whether the principal agent is in compliance with the title insurer’s policies and procedures for handling a claim;

(5) Verification that:

(a) The principal agent has filed the annual report required under COMAR 31.16.03.06;

(b) Only a licensed title insurance producer exercises control over trust money;

(c) Premium monies are held separate from other funds or confirmation that the principal agent has received express written consent from the title insurer in the form required by COMAR 31.03.03 to comingle premium monies with the principal agent’s personal fund; and

(d) Funds received by the principal agent are accurately accounted for in the books and records of the principal agent;

(6) A review of the escrow practices of the principal agent; and

(7) Receipt of the written certification of the principal agent which shall contain:

(a) The printed name and signature of a designated responsible licensed producer or an attorney of the law firm who is a licensed title insurance producer, if the principal agent is a law firm as defined by Insurance Article, §10-125(a)(3), Annotated Code of Maryland;

(b) The date the certification was signed; and

(c) The following statement in at least 12-point font: I hereby certify that the information provided to the title insurer or its designee during the review is, to the best of my knowledge, information, and belief, full, complete, and truthful and that I have undertaken an adequate inquiry to make this certification.

C. If the principal agent does not maintain separate bank or trust accounts for each title insurer it represents, the title insurer shall verify that the trust deposits held on its behalf are reasonably ascertainable from the books of account and records of the principal agent.

D. A title insurer may enter into a written contract with a third party to perform a review.

E. A title insurer that enters into a written contract with a third party to perform a review is:

(1) Bound by the findings of the third party; and

(2) Responsible for any violation of §A, B or C of this regulation, regardless of any delegation.

Cross References

31.01.02.07A(5)

31.04.22.06E(1)

31.04.22.06E(2)

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.05 Failure to Cooperate.

A principal agent’s failure to cooperate with a title insurer at the beginning of or during a review shall constitute a reason to believe that the principal agent has engaged in a prohibited activity under Insurance Article, §10-126, Annotated Code of Maryland, and shall be reported to the Commissioner.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.06 Report.

A. A title insurer shall prepare a written report setting forth the results of its annual review, which shall be made available to the Commissioner upon request.

B. A title insurer shall file a report with the Commissioner within 45 calendar days after the completion of the review if the title insurer has reasonable cause to believe that the title insurance producer or agency at any time engaged in any of the prohibited activities set forth in Insurance Article, §10-126, Annotated Code of Maryland. The report shall be submitted regardless of whether the prohibited activities ceased or were remedied prior to, during the course of, or as a result of the review. The report shall be in writing on a form specified by the Commissioner and submitted by electronic means directed by the Commissioner..

C. The report shall address the following areas:

(1) If applicable, a detailed description of the basis for the reasonable cause to believe that the title insurance producer or agency engaged in any of the prohibited activities set forth in Insurance Article, §10-126, Annotated Code of Maryland;

(2) The name, Maryland producer license number, and contact information of the principal agent or any insurance producer designated under Insurance Article, §10-106, Annotated Code of Maryland;

(3) The name and Maryland producer license number of any insurance producer associated with the principal agent, including the name and license number or numbers of any TIPICs utilized by the agency and confirmation that they are appointed with the insurer;

(4) The file number and property address for each file that was reviewed;

(5) The principal agent’s escrow accounts and related practices, including a review to ensure that:

(a) Only licensed insurance producers exercise control over trust money;

(b) Premium monies are held in compliance with COMAR 31.03.03;

(c) Funds received by the principal agent are accurately accounted for in the books and records of the principal agent; and

(d) The principal agent’s escrow accounts have been properly reconciled as of the date of the completed review and the trust deposits held on its behalf are reasonably ascertainable from the books of account and records of the principal agent;

(6) The report shall indicate if there are or have been any escrow or account shortages at any time during the review period;

(7) Except for transfers of money between the principal agent’s escrow or trust account and the principal agent’s operating account for the fees due the principal agent, transfers of money between principal agent’s accounts that contain or have contained trust money deposits;

(8) Discrepancies between receipts and disbursements, and, if discrepancies are found, a description of the discrepancies in detail and whether the title producer or lender prepared the closing disclosure or HUD-1;

(9) Compliance by the principal agent with the annual MAHT report requirement under COMAR 31.16.03.06;

(10) Information relating to escrow accounts or settlement, closing, or title indemnification conducted by a principal agent, or title insurance producer acting on behalf of the title insurer;

(11) The principal agent’s policy blank inventory;

(12) The principal agent’s failure to comply with the title insurer’s financial accounting requirements; and

(13) Any additional information requested by the Commissioner.

D. A title insurer is not precluded from providing a more comprehensive description of the review.

E. The report shall contain:

(1) The certification from the principal agent required under Regulation .04B(7) of this chapter; and

(2) A copy of the express written consent required under Regulation .04B(5)(c) of this chapter, if premium monies are comingled with the principal agent’s personal funds.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.07 Required Notifications.

A. Except as provided in §B of this regulation, if a title insurer has reason to believe that the principal agent has engaged in, or is engaging in, conduct that is prohibited by Insurance Article, §10-126, Annotated Code of Maryland, the title insurer shall notify the Commissioner in writing, which may be through email, facsimile, or other electronic transmission, within 10 calendar days after obtaining such knowledge or belief, in addition to filing any required a report.

B. A title insurer shall notify the Commissioner in writing, which may be through email, facsimile, or other electronic transmission, within 2 calendar days if a title insurer has reason to believe that a principal agent has converted or misappropriated money received or held in trust in addition to filing any required report.

C. A title insurer’s written notification to the Commissioner under §§A and B of this regulation shall include the following information:

(1) The name, physical address, telephone number, and email address of the principal agent or its designated insurance producer who satisfies the qualifications set forth in §10-121(c);

(2) The principal agent’s producer license number;

(3) The date or dates on which the principal agent failed to cooperate, if applicable;

(4) A description of the facts and circumstances of the principal agent’s conduct prohibited by Insurance Article, §10-126, Annotated Code of Maryland, if applicable; and

(5) A description of the facts and circumstances giving rise to the title insurer’s reason to believe that a principal agent has converted or misappropriated money received or held in trust.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

COMAR 31.04.22.08 Maintenance of Records.

A. A licensee shall maintain for a period of 5 years after the conclusion of an annual review, and make available to the Commissioner upon request, all documentation collected, prepared, and produced by the licensee during an annual review including, but not limited to, work papers, summaries, daily log notes, and the report.

B. Records required by this regulation may be maintained in paper, photographic, magnetic, mechanical, or electronic media or by any process that accurately reproduces the actual document, if the copy of the record is maintained in a manner that:

(1) Is clear and legible;

(2) Accurately reproduces the original document in its entirety, including any attachments to the document;

(3) Is capable of producing a clear and legible hard copy of the original document; and

(4) Preserves evidence of any signature contained on the document.

History

Administrative History: Effective date: December 1, 2014 (41:20 Md. R. 1114)
Administrative History: Regulation .02 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .03B amended effective April 20, 2020 (47:2 Md. R. 62); August 21, 2023 (50:15 Md. R. 729); June 9, 2025 (52:11 Md. R. 534)
Administrative History: Regulation .04 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .04B amended effective June 20, 2016 (43:12 Md. R. 668); April 20, 2020 (47:2 Md. R. 62)
Administrative History: Regulation .05 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .06 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .07 amended effective August 21, 2023 (50:15 Md. R. 729)
Administrative History: Regulation .08A amended effective June 9, 2025 (52:11 Md. R. 534)
Authority: Insurance Article, §§2-108, 2-109, 10-121, and 10-128.1, Annotated Code of Maryland

31.04.23 Corporate Governance Annual Disclosure

COMAR 31.04.23.01 Applicability.

This chapter is applicable to a person subject to the filing requirements of the Maryland Insurance Corporate Governance Annual Disclosure Act under Insurance Article, Title 4, Subtitle 5, Annotated Code of Maryland.

History

Administrative History: Effective date: April 6, 2020 (47:7 Md. R. 384)
Authority: Insurance Article, §§4-503 and 4-508, Annotated Code of Maryland

COMAR 31.04.23.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Board” means the insurer’s or insurance group’s Board of Directors.

(2) “Commissioner” has the meaning stated in Insurance Article, §1-101(k), Annotated Code of Maryland.

(3) “Corporate Governance Annual Disclosure” or “CGAD” has the meaning stated in Insurance Article, §4-501(b), Annotated Code of Maryland.

(4) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in Insurance Article, §4-501(c), Annotated Code of Maryland.

(5) “Insurer” has the meaning stated in Insurance Article, §4-501(d), Annotated Code of Maryland.

(6) “Own Risk and Solvency Assessment” or “ORSA” has the meaning stated in Insurance Article, §32-101, Annotated Code of Maryland.

(7) Senior Management.

(a) “Senior Management” means any corporate officer responsible for reporting information to the Board at regular intervals or providing this information to shareholders and regulators.

(b) “Senior Management” includes, for example and without limitation:

(i) The Chief Executive Officer;

(ii) The Chief Financial Officer;

(iii) The Chief Operations Officer;

(iv) The Chief Procurement Officer;

(v) The Chief Legal Officer;

(vi) The Chief Information Officer;

(vii) The Chief Technology Officer;

(viii) The Chief Revenue Officer;

(ix) The Chief Visionary Officer; and

(x) Any other “C” level executive.

History

Administrative History: Effective date: April 6, 2020 (47:7 Md. R. 384)
Authority: Insurance Article, §§4-503 and 4-508, Annotated Code of Maryland

COMAR 31.04.23.03 Filing Procedures.

A. An insurer, or the insurance group of which the insurer is a member, required to file a CGAD under Insurance Article, Title 4, Subtitle 5, Annotated Code of Maryland, shall, no later than June 1 of each calendar year, submit to the Commissioner a CGAD that contains the information described in Regulation .04 of this chapter.

B. The CGAD shall include a signature of the insurer’s or insurance group’s Chief Executive Officer or Corporate Secretary attesting to the best of that individual’s belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the CGAD has been provided to the insurer’s Board or its appropriate committee.

C. The insurer or insurance group shall have discretion regarding the appropriate format for providing the information required by these regulations and is permitted to customize the CGAD to provide the most relevant information utilized by the insurer or insurance group necessary to permit the Commissioner to gain an understanding of:

(1) The corporate governance structure;

(2) Corporate governance policies; and

(3) Corporate governance practices.

D. Completing the CGAD.

(1) Depending on how an insurer or the insurance group of which the insurer is a member has structured its corporate governance system, the insurer or insurance group submitting a CGAD to the Commissioner may choose to provide information regarding its corporate governance structure at:

(a) The ultimate controlling parent level;

(b) An intermediate holding company level; or

(2) The insurer or insurance group is encouraged to consider the following criteria in determining the level for which information will be provided under §D(1) of this regulation:

(a) The level at which the insurer’s or insurance group’s risk appetite is determined;

(b) The level at which factors, such as earnings, capital, liquidity, operations, and reputation of the insurer, are overseen collectively, and at which level the supervision of those factors is coordinated and exercised; or

(3) If the insurer or insurance group determines the level of reporting based on the criteria in §D(2) of this regulation, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.

E. Notwithstanding §A of this regulation, and as outlined in Insurance Article, §4-503, Annotated Code of Maryland, if the CGAD is completed at the insurance group level:

(1) It shall be filed with the lead state of the group as determined by the procedures outlined in the most recent financial analysis handbook adopted by the National Association of Insurance Commissioners; and

(2) Upon request to the lead state of the group, the chief regulatory official of any state in which the insurance group has a domestic insurer may request a copy of the CGAD and the CGAD shall be provided to that state.

F. An insurer or insurance group may comply with this regulation by referencing other existing documents if the documents provide information that is comparable to the information described in Regulation .04 of this chapter, if the insurer or insurance group:

(1) Clearly references the location of the relevant information within the CGAD; and

(2) Attaches the referenced document if it is not already filed or available to the regulator.

G. Examples of other existing documents that may be referenced in the CGAD may include, without limitation:

(1) An ORSA summary report;

(2) Holding Company Form B or F Filings;

(3) Securities and Exchange Commission Proxy Statements;

(4) Foreign regulatory reporting requirements; or

(5) Other similar documents.

H. Each year following the initial filing of the CGAD, the insurer or insurance group shall file an amended version of the previously filed CGAD indicating:

(1) Where changes have been made in the information or activities reported by the insurer or insurance group; or

(2) If no changes have been made in the information or activities previously reported, that no changes have been made.

History

Administrative History: Effective date: April 6, 2020 (47:7 Md. R. 384)
Authority: Insurance Article, §§4-503 and 4-508, Annotated Code of Maryland

COMAR 31.04.23.04 Contents of Corporate Governance Annual Disclosure.

A. The insurer or insurance group shall be as descriptive as possible in completing the CGAD. This means that attachments or example documents may be included if they are used in the governance process since these may provide a means to demonstrate the strengths of the insurer’s or insurance group’s governance framework and practices.

B. The CGAD shall describe the insurer’s or insurance group’s corporate governance framework and structure, including the following:

(1) The Board and its various committees ultimately responsible for overseeing the insurer or insurance group and the level or levels at which that oversight occurs;

(2) The rationale for the current Board size and structure;

(3) The duties of the Board and each of its significant committees;

(4) How the Board and its significant committees are governed, which may include documents such as bylaws, charters, and informal mandates; and

(5) How the Board’s leadership is structured, including a discussion of the roles of Chief Executive Officer and Chairman of the Board within the organization.

C. The insurer or insurance group shall describe the policies and practices of the most senior governing entity and significant committees thereof, including a discussion of the following factors:

(1) How the qualifications, expertise, and experience of each Board member meet the needs of the insurer or insurance group;

(2) How an appropriate amount of independence is maintained by the Board and its significant committees;

(3) The number of meetings held by the Board and its significant committees over the past year as well as information on director attendance;

(4) How the insurer or insurance group identifies, nominates, and elects members to the Board and its committees, including, for example:

(a) Whether a nomination committee is in place to identify and select individuals for consideration;

(b) Whether term limits are placed on directors;

(d) Whether a Board diversity policy is in place and, if so, how it functions; and

(5) The processes in place for the Board to evaluate its performance and the performance of its committees, as well as any recent measures taken to improve performance, including any Board or committee training programs that have been put in place.

D. The insurer or insurance group shall describe the policies and practices for directing Senior Management, including a description of the following:

(1) Any processes or practices, such as suitability standards, used to determine whether officers and key persons in control functions have the appropriate background, experience, and integrity to fulfill their prospective roles, including:

(a) Identification of the specific positions for which suitability standards have been developed and a description of the standards employed; and

(b) Any changes in an officer’s or key person’s suitability as outlined by the insurer’s or insurance group’s standards and procedures to monitor and evaluate such changes;

(2) The insurer’s or insurance group’s code of business conduct and ethics, the discussion of which considers, for example:

(a) Compliance with laws, rules, and regulations; and

(b) Proactive reporting of any illegal or unethical behavior;

(3) The insurer’s or insurance group’s processes for performance evaluation, compensation and corrective action to ensure effective senior management throughout the organization, including a description of the general objective of significant compensation programs and what the programs are designed to reward. The description shall include:

(a) Sufficient detail to allow the Commissioner to understand how the organization ensures

that compensation programs do not encourage or reward excessive risk taking; and

(b) A discussion of the elements used in determining the organization’s compensation programs, which may include, for example:

(i) The Board’s role in overseeing management compensation programs and practices;

(ii) The various elements of compensation awarded in the insurer’s or insurance group’s compensation programs and how the insurer or insurance group determines and calculates the amount of each element of compensation paid;

(iii) How compensation programs are related to both company and individual performance over time;

(iv) Whether the compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels;

(v) Any clawback provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted; and

(vi) Any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees; and

(4) The insurer’s or insurance group’s plans for Chief Executive Officer and Senior Management succession.

E. The insurer or insurance group shall describe the process by which the Board, its committees, and Senior Management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer’s business activities, including a discussion of:

(1) How oversight and management responsibilities are delegated between the Board, its committees, and Senior Management;

(2) How the Board is kept informed of the insurer’s strategic plans, the associated risks, and steps that Senior Management is taking to monitor and manage those risk; and

(3) A description of how reporting responsibilities are organized to allow the Commissioner to understand the frequency at which information is reported to and reviewed by Senior Management and the Board in the following critical risk areas of the insurer:

(a) Risk management processes, which may include reference to an insurer’s ORSA Summary Report pursuant to Insurance Article, §32-105, Annotated Code of Maryland, if applicable;

(b) Actuarial function;

(d) Reinsurance decision-making processes;

(e) Business strategy or finance decision-making processes;

(f) Compliance function;

(g) Financial reporting or internal auditing; and

(h) Market conduct decision-making processes.

Cross References

31.04.23.03A

31.04.23.03F

History

Administrative History: Effective date: April 6, 2020 (47:7 Md. R. 384)
Authority: Insurance Article, §§4-503 and 4-508, Annotated Code of Maryland

31.05 ASSETS, LIABILITIES, RESERVES, AND INVESTMENTS OF INSURERS

31.05.01 Annual Actuarial Opinion and Memorandum

COMAR 31.05.01.01 Scope.

A. This chapter applies to all life insurance companies and fraternal benefit societies that are authorized to:

(1) Do business in this State; or

(2) Reinsure life insurance, annuities, or accident and health business in this State.

B. This chapter shall be applied in a manner that allows the appointed actuary to utilize his or her professional judgment in performing the asset analysis and in developing the actuarial opinion and supporting memoranda, consistent with relevant actuarial standards of practice. However, the Commissioner has the authority to specify specific methods of actuarial analysis and actuarial assumptions when, in the Commissioner's judgment, these specifications are necessary for an acceptable opinion to be rendered relative to the adequacy of reserves and related items.

C. This chapter is applicable to all annual statements filed with the Insurance Commissioner after the effective date of this chapter in accordance with Insurance Article, §§4-116 and 8-444, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Actuarial opinion” means the opinion of an appointed actuary regarding the adequacy of reserves and related actuarial items based on an asset adequacy analysis in accordance with:

(a) Regulation .05 of this chapter; and

(b) Applicable actuarial standards of practice.

(2) “Actuarial Standards Board” means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.

(3) “Annual statement” means the statement required in accordance with the provisions of Insurance Article, §§4-116 and 8-444, Annotated Code of Maryland, to be filed by the company with the Commissioner annually.

(4) “Appointed actuary” means an individual who is appointed or retained in accordance with the requirements set forth in Regulation .03B of this chapter to provide the actuarial opinion and supporting memorandum required by Insurance Article, §5-201, Annotated Code of Maryland.

(5) “Asset adequacy analysis” means an analysis:

(a) That meets the standards and other requirements referred to in Regulation .03C of this chapter; and

(b) Which may take many forms, including, but not limited to, cash flow testing, sensitivity testing, or applications of risk theory.

(6) “Company” means a life insurance company or a fraternal benefit society:

(a) Authorized to do business in this State; or

(b) Authorized to reinsure life insurance, annuities, or accident and health business in this State.

(7) “Qualified actuary” means an individual who:

(a) Is a member in good standing of the American Academy of Actuaries;

(b) Is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing these statements;

(d) Has not failed to notify the Commissioner of any adverse action taken by the insurance regulatory authority of any state similar to that in §B(7)(e)(i)-(v) of this regulation; and

(e) Has not been found by the Commissioner (or if so found has subsequently been reinstated as a qualified actuary), following appropriate notice and hearing, to have:

(i) Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of the actuary's dealings as a qualified actuary;

(ii) Been found guilty of fraudulent or dishonest practices;

(iii) Demonstrated incompetency, lack of cooperation, or untrustworthiness to act as a qualified actuary;

(iv) Submitted to the Commissioner during the past 5 years an actuarial opinion or memorandum pursuant to Regulations .05 and .06 of this chapter that the Commissioner rejected because it did not meet the provisions of these regulations, including standards set by the Actuarial Standards Board; or

(v) Resigned or been removed as an actuary within the past 5 years as a result of acts or omissions indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable actuarial standards.

Cross References

31.05.01.03B(2)(b)

31.05.01.06A(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.03 General Requirements.

A. Submission of Statement of Actuarial Opinion.

(1) There shall be included on or attached to page 1 of the annual statement for each year, beginning with the year in which this chapter becomes effective, the statement of an appointed actuary, entitled “Statement of Actuarial Opinion”, setting forth an opinion relating to reserves and related actuarial items held in support of policies and contracts, in accordance with Regulation .05 of this chapter.

(2) In the case of a statement of actuarial opinion required to be submitted by a foreign or alien company, the Commissioner may accept the statement of actuarial opinion filed by the company with the insurance regulator of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State.

(3) Upon written request by the company and upon good cause shown, the Commissioner may grant an extension of the date for submission of the statement of actuarial opinion.

B. Appointed Actuary.

(1) An appointed actuary is a qualified actuary who is appointed or retained to prepare the statement of actuarial opinion required by this chapter, either directly by, or by the authority of, the board of directors through an executive officer of the company other than the qualified actuary.

(2) The company shall:

(a) Give the Commissioner timely written notice of the name, title, and, in the case of a consulting actuary, the name of the firm, and manner of appointment or retention of each individual appointed or retained by the company as an appointed actuary; and

(b) State in the notice that the individual meets the requirements of a qualified actuary and is not disqualified under Regulation .02B(7) of this chapter.

(3) Once notice is furnished, further notice is not required with respect to this individual if the company gives the Commissioner timely written notice if the actuary ceases to be appointed or retained as an appointed actuary or to meet the requirements set forth in this chapter.

(4) If an individual appointed or retained as an appointed actuary replaces a previously appointed actuary, the notice shall so state and give the reasons for replacement.

C. Standards for Asset Adequacy Analysis. The asset adequacy analysis required by this chapter shall:

(1) Conform to the standards of practice:

(a) As promulgated from time to time by the Actuarial Standards Board and any additional standards under this chapter; and

(b) Which are to form the basis of the statement of actuarial opinion in accordance with Regulation .05 of this chapter; and

(2) Be based on methods of analysis considered appropriate for these purposes by the Actuarial Standards Board.

Cross References

31.05.01.02B(4)

31.05.01.02B(5)(a)

31.05.01.05B(6)(b)

31.05.01.06B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.04 Liabilities To Be Covered.

A. The statement of actuarial opinion shall apply to all the business the company has in force on the statement date, whether directly issued or assumed, regardless of when or where issued, for example, reserves of Exhibits 5, 6, and 7 of the Annual Statement, and claim liabilities in Exhibit 8, Part 1 of the Annual Statement, and equivalent items in the separate account statement or statements of a life insurance company, and corresponding items in the annual statements of other companies.

B. If the appointed actuary determines as the result of asset adequacy analysis that a reserve should be held in addition to the aggregate reserve held by the company and calculated in accordance with methods set forth in accordance with the requirements of the Insurance Article, Title 5, Subtitle 3 (The Standard Valuation Law), Annotated Code of Maryland, and regulations adopted under it, the company shall establish the additional reserve.

C. Additional reserves established under §B of this regulation and considered not necessary in subsequent years may be released. Any amounts released shall be disclosed in the actuarial opinion for the applicable year. The release of these reserves is not considered an adoption of a lower standard of valuation.

Cross References

31.05.01.05B(6)(a)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.05 Statement of Actuarial Opinion Based on an Asset Adequacy Analysis.

A. General.

(1) The statement of actuarial opinion submitted in accordance with this regulation shall consist of:

(a) A paragraph identifying the appointed actuary and the actuary's qualifications as required by §B(5) of this regulation;

(b) A scope paragraph identifying:

(i) The subjects on which an opinion is to be expressed and describing the scope of the appointed actuary's work, including a tabulation delineating the reserves and related actuarial items which have been analyzed for asset adequacy and the method of analysis as required by §B(6) of this regulation; and

(ii) The reserves and related actuarial items covered by the opinion which have not been so analyzed;

(c) A reliance paragraph describing those areas, if any, where the appointed actuary has deferred to other experts in developing data, procedures, or assumptions, for example, anticipated cash flows from currently owned assets (including variation in cash flows according to economic scenarios in §B(7) of this regulation) supported by a statement of each expert in the form prescribed by §E of this regulation; and

(d) An opinion paragraph expressing the appointed actuary's opinion with respect to the adequacy of the supporting assets to mature the liabilities as required by §B(10) of this regulation.

(2) One or more additional paragraphs are required in individual company cases if the appointed actuary:

(a) Considers it necessary to state a qualification of the actuary's opinion;

(b) Must disclose an inconsistency in the method of analysis or basis of asset allocation used at the prior opinion date with that used for this opinion;

(c) Must disclose whether additional reserves as of the prior opinion date are released as of this opinion date, and the extent of the release; or

(d) Chooses to add a paragraph briefly describing the assumptions which form the basis for the actuarial opinion.

B. Required Language.

(1) The language in §B(5)—(13) of this regulation, or language substantially similar, shall be used in the statement of actuarial opinion in accordance with this section.

(2) The required language is that which in typical circumstances should be included in a statement of actuarial opinion.

(3) The required language may be modified as needed to meet the circumstances of a particular case, but the appointed actuary should use language which clearly expresses the actuary's professional judgment and which indicates why the required language was not used.

(4) The opinion shall retain all pertinent aspects of the language provided in this regulation.

(5) The opening paragraph shall generally indicate the appointed actuary's relationship to the company and the actuary's qualifications to sign the opinion in the following manner:

(a) For a company actuary, the opening paragraph of the actuarial opinion should read as follows: “I, {name}, am {title} of {insurance company name} and a member of the American Academy of Actuaries. I was appointed by, or by the authority of, the Board of Directors of said insurer to render this opinion as stated in the letter to the Commissioner dated {insert date}. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies.”; and

(b) For a consulting actuary, the opening paragraph shall contain a statement identical or similar to: “I, {name}, a member of the American Academy of Actuaries, am associated with the firm of {name of consulting firm}. I have been appointed by, or by the authority of, the Board of Directors of {name of company} to render this opinion as stated in the letter to the Commissioner dated {insert date}. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies.”

(6) The scope paragraph shall include a statement identical or similar to the following:

"I have examined the actuarial assumptions and actuarial methods used in determining reserves and related actuarial items listed below, as shown in the annual statement of the company as prepared for filing with State regulatory officials, as of December 31, 20{ }. Tabulated below are those reserves and related actuarial items which have been subjected to asset adequacy analysis.

| Asset Adequacy Tested Amounts—Reserves and Liabilities | | | | | | | --- | --- | --- | --- | --- | --- | | Statement Item* | Formula Reserves (1) | Additional Actuarial Reserves (a) (2) | Analysis Method (b) | Other Amount (3) | Total Amount (1)+(2)+(3) | | Exhibit 5 attached at §G of this regulation. | | | | | | | A. Life Insurance | | | | | | | B. Annuities | | | | | | | C. Supplementary Contracts Involving Life Contingencies | | | | | | | D. Accidental Death Benefit | | | | | | | E. Disability—Active | | | | | | | F. Disability—Disabled | | | | | | | G. Miscellaneous | | | | | | | Total (Exhibit 5, Item 1, Page 3) | | | | | | | Exhibit 6 attached at §G of this regulation. | | | | | | | A. Active Life Reserves | | | | | | | B. Claim Reserve | | | | | | | Total (Exhibit 6, Item 2, Page 3) | | | | | | | Exhibit 7 attached at §G of this regulation. | | | | | | | Premium and Other Deposit Funds (Column 6, Line 14) | | | | | | | Guaranteed Interest Contracts (Column 2, Line 14) | | | | | | | Supplemental Contracts (Column 4, Line 14) | | | | | | | Annuities Certain (Column 3, Line 14) | | | | | | | Dividend Accumulations or Refunds (Column 5, Line 14) | | | | | | | Total Exhibit 7 (Column 1, Line 14) | | | | | | | Exhibit 8, Part 1, attached at §G of this regulation. | | | | | | | 1. Life (Page 3, Line 4.1) | | | | | | | 2. Health (Page 3, Line 4.2) | | | | | | | Total Exhibit 8, Part 1 | | | | | | | Separate Accounts (Page 3 of the Separate Accounts, Lines 1 and 2) | | | | | | | TOTAL RESERVES | | | | | | | IMR (General Account, Page , Line ) | | | | | | | (Separate Accounts, Page , Line ) | | | | | | | AVR (Page , Line ) | | (See (c) below) | | | | | Net Deferred and Uncollected Premiums | | | | | | | * References are to the 2005 Annual Statement blank | | | | | |

Notes:

(a) The additional actuarial reserves are the reserves established under Regulation .04B of this chapter.

(b) The appointed actuary should indicate the method of analysis, determined in accordance with the standards for asset adequacy analysis referred to in Regulation .03C of this chapter, by means of symbols that should be defined in footnotes to the table.

(7) Reliance Paragraph—Other Experts.

(a) If the appointed actuary has relied on other experts to develop certain portions of the analysis, the reliance paragraph shall include a statement such as the following:

“I have relied on {name}, {title} for {e.g., “anticipated cash flows from currently owned assets, including variations in cash flows according to economic scenarios,” or “certain critical aspects of the analysis performed in conjunction with forming my opinion”}, as certified in the attached statement.”

(b) A statement of reliance on other experts should be accompanied by a statement by each of these experts in the form prescribed by §E of this regulation.

(8) If the appointed actuary has examined the underlying asset and liability records, the reliance paragraph shall also include the following:

“My examination included such review of the actuarial assumptions and actuarial methods and of the underlying basic asset and liability records and such tests of the actuarial calculations as I considered necessary. I also reconciled the underlying basic asset and liability records to {exhibits and schedules listed as applicable} of the company's current annual statement.”

(9) Underlying Records Not Examined.

(a) If the appointed actuary has not examined the underlying records, but has relied upon listings and summaries of policies in force, or asset records prepared by the company or a third party, or both, the reliance paragraph shall include a statement identical or similar to: “In forming my opinion on {specify types of reserves}, I have relied upon listings and summaries {of policies and contracts, of asset records} prepared by {name and title of company officer certifying in-force records} as certified in the attached statement. I evaluated that data for reasonableness and consistency. I also reconciled that data to {exhibits and schedules to be listed as applicable} of the company's current annual statement. In other respects my examination included review of the actuarial assumptions and actuarial methods and tests of the actuarial calculations as I considered necessary.”

(b) The reliance paragraph in §B(9)(a) of this regulation shall be accompanied by a statement by each person relied upon in the form prescribed by §E of this regulation.

(10) The opinion paragraph shall include the following:

(a) "In my opinion the reserves and related actuarial values concerning the statement items identified above:

(i) Are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles;

(ii) Are based on actuarial assumptions which produce reserves at least as great as those called for in any contract provision as to reserve basis and method, and are in accordance with all other contract provisions;

(iii) Meet the requirements of the insurance law and regulations of the state of {state of domicile} and are at least as great as the minimum aggregate amounts required by the state in which that statement is filed;

(iv) Are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end (with any exceptions noted below); and

(v) Include provision for all actuarial reserves and related statement items which ought to be established.

(b) The reserves and related items, when considered in light of the assets held by the company with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts, make adequate provision, according to presently accepted actuarial standards of practice for the anticipated cash flows required by the contractual obligations and related expenses of the company. (At the discretion of the Commissioner, this language may be omitted for an opinion filed on behalf of a company doing business only in this State and in no other state.)

(c) The actuarial methods, considerations, and analysis used in forming my opinion conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis of this statement of opinion."

(11) The opinion paragraph shall include either of the following, whichever is applicable:

(a) “This opinion is updated annually as required by statute. To the best of my knowledge, there have been no material changes from the applicable date of the annual statement to the date of the rendering of this opinion which should be considered in reviewing this opinion.”; or

(b) “The following material change(s) which occurred between the date of the statement for which this opinion is applicable and the date of this opinion should be considered in reviewing this opinion.”

(12) The opinion paragraph shall include the following: “The impact of unanticipated events subsequent to the date of this opinion is beyond the scope of this opinion. The analysis of the asset adequacy portion of this opinion should be viewed recognizing that the company's future experience may not follow all the assumptions used in the analysis.”

(13) The opinion paragraph shall include the signature of the appointed actuary, the address of the appointed actuary, the telephone number of the appointed actuary, and the date.

C. Assumptions for New Issues. The adoption for new issues or new claims or other new liabilities of an actuarial assumption which differs from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a change in actuarial assumptions within the meaning of this regulation.

D. Adverse Opinions.

(1) If the appointed actuary is unable to form an opinion, then the actuary shall refuse to issue a statement of actuarial opinion.

(2) If the appointed actuary's opinion is adverse or qualified, then the actuary shall issue an adverse or qualified actuarial opinion explicitly stating the reason or reasons for the opinion. This statement should follow the scope paragraph and precede the opinion paragraph.

E. Reliance on Data Furnished by Other Persons.

(1) If the appointed actuary relies on the certification of others on matters concerning the accuracy or completeness of any data underlying the actuarial opinion, or the appropriateness of any other information used by the appointed actuary in forming the actuarial opinion, the actuarial opinion should so indicate the persons the actuary is relying upon and a precise identification of the items subject to reliance.

(2) In addition, the persons on whom the appointed actuary relies shall provide a certification that precisely identifies the items on which the person is providing information and a statement as to the accuracy, completeness, or reasonableness, as applicable, of the items.

(3) The certification statement shall be identical or similar to one of the following:

(a) “I {name of officer}, {title}, of {name of company or accounting firm}, hereby affirm that the listings and summaries of policies and contracts in force as of December 31, 20{ }, and other liabilities prepared for and submitted to {name of appointed actuary} were prepared under my direction and, to the best of my knowledge and belief, are substantially accurate and complete. Signature of the Officer of the Company or Accounting Firm, Address of the Officer of the Company or Accounting Firm, Telephone Number of the Officer of the Company or Accounting Firm, Date”; or

(b) “I, {name of officer}, {title}, of {name of company, accounting firm, or security analyst}, hereby affirm that the listings, summaries, and analysis relating to data prepared for and submitted to {name of appointed actuary} in support of the asset-oriented aspects of the opinion were prepared under my direction and, to the best of my knowledge and belief, are substantially accurate and complete. Signature of the Officer of the Company, Accounting Firm or the Security Analyst; Address of the Officer of the Company, Accounting Firm or the Security Analyst; Telephone Number of the Officer of the Company, Accounting Firm or the Security Analyst, Date”

F. Alternate Option.

(1) Insurance Article, Title 5, Subtitle 3, Annotated Code of Maryland (The Standard Valuation Law), gives the Commissioner broad authority to accept the valuation of a foreign insurer when that valuation meets the requirements applicable to a company domiciled in this State in the aggregate. As an alternative to the requirements in §B(10)(a)(iii) of this regulation, the Commissioner may make one or more of the additional approaches listed in §F(2)—(4) of this regulation available to the opinion actuary.

(2) Option 1.

(a) A statement that the reserves “meet the requirements of the insurance laws and regulations of the state of {state of domicile} and the formal written standards and conditions of this State for filing an opinion based on the law of the state of domicile” may be used.

(b) If the Commissioner chooses to allow this alternative, a formal written list of standards and conditions shall be made available.

(c) If a company chooses to use this alternative, the standards and conditions in effect on July 1 of a calendar year shall apply to statements for that calendar year, and they shall remain in effect until they are revised or revoked.

(d) If no list is available, this alternative is not available.

(3) Option 2.

(a) A statement that the reserves “meet the requirements of the insurance laws and regulations of the State of {state of domicile}, and I have verified that the company's request to file an opinion based on the law of the state of domicile has been approved and that any conditions required by the Commissioner for approval of that request have been met” may be used.

(b) If the Commissioner chooses to allow this alternative, a formal written statement for the allowance shall be issued not later than March 31 of the year it is first effective. It shall remain valid until rescinded or modified by the Commissioner.

(d) Subsequent to the statement in §F(3)(a) of this regulation being issued, if a company chooses to use this alternative, the company shall file a request to do so, along with justification for its use, not later than April 30 of the year of the opinion to be filed. The request shall be deemed approved on October 1 of that year if the Commissioner has not denied the request by that date.

(4) Option 3.

(a) A statement that the reserves “meet the requirements of the insurance laws and regulations of the State of {state of domicile}, and I have submitted the required comparison as specified by this state” may be used.

(b) If the Commissioner chooses to allow this alternative, a formal written list of products for which the required comparison shall be provided will be published.

(c) If a company chooses to use this alternative, the list in effect on July 1 of a calendar year shall apply to statements for that calendar year, and it shall remain in effect until it is revised or revoked.

(d) If no list is available, this alternative is not available.

(e) If a company desires to use this alternative, the appointed actuary shall provide a comparison of the gross nationwide reserves held to the gross nationwide reserves that would be held under NAIC codification standards.

(f) Gross nationwide reserves are the total reserves calculated for the total company in-force business directly sold and assumed, indifferent to the state in which the risk resides, without reduction for reinsurance ceded.

(g) The information provided shall be at least product type, death benefit or account value, reserves held, codification reserves, and codification standard.

(h) The information listed shall include all products identified by either the state of filing or any other states subscribing to this alternative.

(i) If there is no codification standard for the type of product or risk in force or if the codification standard does not directly address the type of product or risk in force, the appointed actuary shall provide detailed disclosure of the specific method and assumptions used in determining the reserves held.

(j) The comparison provided by the company is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.

(5) Notwithstanding other provisions of this regulation, the Commissioner may reject an opinion based on the laws and regulations of the state of domicile and require an opinion based on the laws of Maryland. If a company is unable to provide the opinion within 60 days of the request or other period of time determined by the Commissioner after consultation with the company, the Commissioner may contract an independent actuary at the company's expense to prepare and file the opinion.

G. National Association of Insurance Commissioner's 2005 Annual Statement Blank.

Cross References

31.05.01.02B(1)(a)

31.05.01.03A(1)

31.05.01.03C(1)(b)

31.05.01.06B

31.05.01.07

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.06 Description of Actuarial Memorandum Including an Asset Adequacy Analysis and Regulatory Asset Adequacy Issues Summary.

A. General.

(1) In accordance with Insurance Article, §5-201, Annotated Code of Maryland, the appointed actuary shall prepare a memorandum to the company describing the analysis done in support of the actuary's opinion regarding the reserves. The memorandum shall be made available for examination by the Commissioner upon the Commissioner's request.

(2) In preparing the memorandum, the appointed actuary may rely on, and include as a part of the actuary's own memorandum, memoranda prepared and signed by other actuaries who are qualified within the meaning of Regulation .02B(7) of this chapter, with respect to the areas covered in those memoranda, and so state in their memoranda.

(3) Memoranda.

(a) If the Commissioner requests a memorandum, the Commissioner may designate a qualified actuary to review the opinion and prepare a supporting memorandum, if:

(i) No memorandum exists; or

(ii) The Commissioner finds that the analysis described in the memorandum fails to meet the standards of the Actuarial Standards Board or the standards and requirements of this chapter.

(b) The reasonable and necessary expense of the independent review shall be paid by the company, but the review shall be directed and controlled by the Commissioner.

(4) Company Data.

(a) The reviewing actuary has the same status as an examiner for purposes of obtaining data from the company. The work papers and documentation of the reviewing actuary shall be retained by the Commissioner.

(b) Information provided by the company to the reviewing actuary and included in the work papers:

(i) Is considered as material provided by the company to the Commissioner; and

(ii) Shall be kept confidential to the same extent as is prescribed by law with respect to other material provided by the company to the Commissioner pursuant to Insurance Article, §2-209, Annotated Code of Maryland.

(c) The reviewing actuary may not be an employee of a consulting firm involved with the preparation of any prior memorandum or opinion for the company pursuant to this regulation for the current year or any one of the preceding 3 years.

(5) Asset Adequacy Issues Summary.

(a) In accordance with Insurance Article, §5-201, Annotated Code of Maryland, the appointed actuary shall prepare a regulatory asset adequacy issues summary, the contents of which are specified in §D of this regulation.

(b) The regulatory asset adequacy issues summary shall be submitted not later than March 15 of the year following the year for which a statement of actuarial opinion based on asset adequacy is required.

(c) The regulatory asset adequacy issues summary shall be kept confidential to the same extent and under the same conditions as the actuarial memorandum.

B. Details of Memorandum Section Documenting Asset Adequacy Analysis. When an actuarial opinion under Regulation .05 of this chapter is provided, the memorandum shall demonstrate that the analysis has been done in accordance with the standards for asset adequacy analysis referred to in Regulation .03C of this chapter and any additional standards under this chapter. It shall specify:

(1) For reserves:

(a) Product descriptions including market description, underwriting, and other aspects of a risk profile, and the specific risks the appointed actuary considers significant;

(b) Source of liability in force;

(d) Investment reserves;

(e) Reinsurance arrangements;

(f) Identification of any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract, and the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis; and

(g) Documentation of assumptions to test reserves for the following:

(i) Lapse rates (both base and excess);

(ii) Interest crediting rate strategy;

(iii) Mortality;

(iv) Policyholder dividend strategy;

(v) Competitor or market interest rate;

(vi) Annuitization rates;

(vii) Commissions and expenses; and

(viii) Morbidity;

(2) For assets:

(a) Portfolio descriptions, including a risk profile disclosing the quality, distribution, and types of assets;

(b) Investment and disinvestment assumptions;

(d) Asset valuation bases; and

(e) Documentation of assumptions made for:

(i) Default costs;

(ii) Bond call function;

(iii) Mortgage prepayment function;

(iv) Determining market value for assets sold due to disinvestment strategy; and

(v) Determining yield on assets acquired through the investment strategy;

(3) For the analysis basis:

(a) Methodology;

(b) Rationale for inclusion/exclusion of different blocks of business and how pertinent risks were analyzed;

(c) Rationale for degree of rigor in analyzing different blocks of business, including the level of materiality that was used in determining how rigorously to analyze different blocks of business;

(d) Criteria for determining asset adequacy, including the precise basis for determining if assets are adequate to cover reserves under moderately adverse conditions or other conditions as specified in relevant actuarial standards of practice; and

(e) Whether the impact of federal income taxes was considered and the treatment of reinsurance in the asset adequacy analysis;

(4) Summary of material changes in methods, procedures, or assumptions from the prior year's asset adequacy analysis;

(5) Summary of results; and

(6) Conclusion or conclusions.

C. In §B(1) and (2) of this regulation, the documentation of the assumptions shall be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions.

D. Details of the Regulatory Asset Adequacy Issues Summary.

(1) The regulatory asset adequacy issues summary shall include:

(a) Descriptions of the scenarios tested, including whether those scenarios are stochastic or deterministic, and the sensitivity testing done relative to those scenarios as follows:

(i) If negative ending surplus results under certain tests in the aggregate, the actuary should describe those tests and the amount of additional reserve as of the valuation date which, if held, would eliminate the negative aggregate surplus values; and

(ii) Ending surplus values shall be determined by either extending the projection period until the in-force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities remaining in force;

(b) The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis;

(c) The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion;

(d) Comments on any interim results that may be of significant concern to the appointed actuary, for example, the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods;

(e) The methods used by the actuary to recognize the impact of reinsurance on the company's cash flows, including both assets and liabilities, under each of the scenarios tested; and

(f) Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability, including but not limited to those affecting cash flows embedded in fixed income securities, and equity-like features in any investments, have been appropriately considered in the asset adequacy analysis.

(2) The regulatory asset adequacy issues summary shall contain the name of the company for which the regulatory asset adequacy issues summary is being supplied and shall be signed and dated by the appointed actuary rendering the actuarial opinion.

E. Conformity to Standards of Practice. The memorandum shall include a statement:

“Actuarial methods, considerations, and analyses used in the preparation of this memorandum conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis for this memorandum.”

F. Use of Assets Supporting the Interest Maintenance Reserve and the Asset Valuation Reserve.

(1) An appropriate allocation of assets in the amount of the interest maintenance reserve (IMR), whether positive or negative, shall be used in any asset adequacy analysis.

(2) Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the asset valuation reserve (AVR), and these AVR assets may not be applied for any other risks with respect to reserve adequacy.

(3) Analysis of these AVR assets and other risks may include assets supporting other mandatory or voluntary reserves available to the extent not used for risk analysis and reserve support.

(4) The amount of the assets used for the AVR shall be disclosed in the Table of Reserves and Liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets shall be disclosed in the memorandum.

G. Documentation. The appointed actuary shall retain on file, for at least 7 years, sufficient documentation so that it will be possible to determine:

(1) The procedures followed;

(2) The analyses performed;

(3) The basis for assumptions; and

(4) The results obtained.

Cross References

31.05.01.07

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

COMAR 31.05.01.07 Annual Filing Requirement.

A statement of opinion on the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with Regulation .05 of this chapter, and a memorandum in support of the analysis in accordance with Regulation .06 of this chapter, is required each year.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.10 adopted as an emergency provision effective October 26, 1993 (20:23 Md. R. 1799); adopted permanently effective January 31, 1994 (21:2 Md. R. 98)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.99 to COMAR 31.05.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.10 repealed and new Regulations .01—.07 adopted as an emergency provision effective March 13, 2009 (36:8 Md. R. 592); adopted permanently effective June 1, 2009 (36:11 Md. R. 787)
Administrative History: Regulation .06D amended effective April 2, 2012 (39:6 Md. R. 412)
Authority: Insurance Article, §§2-109(a)(1), 4-116, 5-103, 5-201, 8-444, and 14-121, Annotated Code of Maryland

31.05.02 Certificate of Valuation—Life Insurers

COMAR 31.05.02.01 Certificate of Valuation.

A. Each life insurance company licensed in Maryland shall annually furnish the Commissioner within 30 days of its issuance by the state of domicile a certificate of valuation covering the previous calendar year attested by the insurance supervisory official of the company's state of domicile. The submission of the certificate of valuation shall be in addition to the submission of the annual or interim statement by the insurer as may be required by statute.

B. Each life insurance company incorporated under the laws of Maryland shall furnish the Commissioner on or before February 15th of each year with properly attested true and correct lists and valuations of its business in force, which, after appropriate investigation, will be used in connection with the annual valuation of policies. Failure to furnish the required lists and valuations will preclude the issuance by the Commissioner of a certificate of valuation.

History

Administrative History: Effective date: December 31, 1953
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .01 amended effective February 20, 1989 (16:3 Md. R. 342
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.10 to COMAR 31.05.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 4-116, Annotated Code of Maryland

31.05.03 Valuation of Life Insurance Policies

COMAR 31.05.03.01 Purpose.

A. The purpose of this chapter is to provide:

(1) Tables of select mortality factors and rules for their use;

(2) Rules concerning a minimum standard for the valuation of plans with nonlevel premiums or benefits;

(3) Rules concerning a minimum standard for the valuation of plans with secondary guarantees;

(4) Mortality tables to determine minimum valuation standards and minimum nonforfeiture standards for life insurance policies; and

(5) A requirement that all life insurers perform an asset adequacy analysis except in certain cases.

B. The method for calculating basic reserves defined in this chapter constitutes the Commissioner's Reserve Valuation Method for policies to which this chapter is applicable.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.02 Applicability.

A. In General. Except as provided in §B of this regulation, this chapter applies to all life insurance policies, with or without nonforfeiture values, issued on or after the effective date of this chapter, subject to the conditions of §C of this regulation.

B. Exceptions. Regulations .07—.13 of this chapter do not apply to:

(1) An individual life insurance policy:

(a) Issued on or after the effective date of this chapter; and

(b) Issued in accordance with and as a result of a reentry provision contained in the original life insurance policy of the same or greater face amount which:

(i) Was issued before the effective date of this chapter, and

(ii) Guarantees the premium rates of the new policy;

(2) Subsequent policies issued as a result of the exercise of the provision described in §B(1)(b) of this regulation, or a derivation of the provision in the new policy;

(3) A variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts;

(4) A variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts;

(5) Group life insurance certificates unless the certificates provide for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of 1 year; or

(6) A universal life insurance policy if the:

(a) Secondary guarantee period, if any, is 5 years or less;

(b) Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on:

(i) For policies issued before January 1, 2009, the 1980 CSO valuation table or the ultimate mortality rates in the 2001 CSO Mortality Table, and the applicable valuation interest rate; and

(ii) For policies issued on or after January 1, 2009, the ultimate mortality rates in the 2001 CSO Mortality Table and the applicable valuation interest rate; and

(c) Initial surrender charge is not less than 100 percent of the first year annualized specified premium for the second guarantee period.

C. Conditions.

(1) Calculation of the minimum valuation standard for policies, other than universal life policies, with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, or both, shall be in accordance with the provisions of Regulation .11 of this chapter.

(2) Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies, that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period, shall be in accordance with the provisions of Regulation .12 of this chapter.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Basic reserves” means reserves calculated in accordance with the principles of Insurance Article, §5-307, Annotated Code of Maryland.

(2) “Commissioner” means the Maryland Insurance Commissioner.

(3) “Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

(4) “Contract segmentation method” means the method of dividing the period from issue to mandatory expiration of a policy into successive segments, with the length of each segment being defined as the period from the end of the prior segment (from policy inception, for the first segment) to the end of the latest policy year as determined under Regulation .07 of this chapter.

(5) “Deficiency reserves” means the excess, if greater than zero, of:

(a) Minimum reserves calculated in accordance with the principles of Insurance Article, §5-311, Annotated Code of Maryland; over

(b) Basic reserves.

(6) “Guaranteed gross premiums” means the premiums under a policy of life insurance that are guaranteed and determined at issue.

(7) “Maximum valuation interest rates” means the interest rates defined in Insurance Article, §5-306(d)(2), Annotated Code of Maryland, that are to be used in determining the minimum standard for the valuation of life insurance policies.

(8) “NAIC” means the National Association of Insurance Commissioners.

(9) "1980 CSO valuation tables" means the Commissioner's 1980 Standard Ordinary Mortality Table (1980 CSO Table) without 10-year selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law, and variations of the 1980 CSO Table approved by the NAIC, such as the smoker and nonsmoker versions approved in December 1983.

(10) “Preneed insurance contract” means any life insurance policy or certificate, annuity contract, or other insurance contract which, by assignment or otherwise, has for a purpose the funding of an agreement relating to the purchase or provision of specific funeral or cemetery merchandise or services to be provided at the time of the individual's death.

(11) “Scheduled gross premium” means:

(a) The smallest illustrated gross premium at issue for other than universal life insurance policies; or

(b) The smallest specified premium described in Regulation .12A(3) of this chapter, if any, for universal life insurance policies, or else the minimum premium described in Regulation .12A(4) of this chapter.

(12) “Segmented reserves” means reserves, calculated using segments produced by the contract segmentation method, equal to the present value of all future guaranteed benefits less the present value of all future net premiums to the mandatory expiration of a policy as described in Regulation .08 of this chapter.

(13) “Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.

(14) “Statistical agent” means an entity with:

(a) Proven systems for protecting the confidentiality of individual insurance and insurer information;

(b) Demonstrated resources for, and history of, ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers; and

(c) A history of, and means for, aggregation of data and accurate promulgation of the experience modifications in a timely manner.

(15) “Tabular cost of insurance” means the net single premium at the beginning of a policy year for 1-year term insurance in the amount of the guaranteed death benefit in that policy year.

(16) "10-year select factors" means the select factors adopted with the 1980 amendments to the NAIC Standard Valuation Law.

(17) 2001 CSO Mortality Table.

(a) "2001 CSO Mortality Table" means that mortality table:

(i) Consisting of separate rates of mortality for male and female lives;

(ii) Developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force;

(iii) Adopted by the NAIC in December 2002 and included in the Proceedings of the NAIC (2nd Quarter 2002); and

(iv) Supplemented by the 2001 CSO Preferred Class Structure Mortality Table.

(b) Unless the context indicates otherwise, "2001 CSO Mortality Table" includes:

(i) The ultimate form of that table;

(ii) The select and ultimate form of that table;

(iii) Both the smoker and nonsmoker mortality tables;

(iv) The composite mortality tables; and

(v) Both the age-nearest-birthday and age-last-birthday bases of the mortality tables.

(18) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

(19) "2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

(20) 2001 CSO Preferred Class Structure Mortality Table.

(a) "2001 CSO Preferred Class Structure Mortality Table" means those mortality tables adopted by the NAIC in September 2006, and included in the Proceedings of the NAIC (3rd Quarter 2006) which have separate rates of mortality for:

(i) Super preferred nonsmokers;

(ii) Preferred nonsmokers;

(iii) Residual standard nonsmokers:

(iv) Preferred smokers; and

(v) Residual standard smokers.

(b) Unless the context indicates otherwise, "2001 CSO Preferred Class Structure Mortality Table" includes:

(i) The ultimate form of that table;

(ii) The select and ultimate form of that table;

(iii) Both the smoker and nonsmoker mortality tables;

(iv) Both the male and female mortality tables;

(v) The gender composite mortality tables; and

(vi) Both the age-nearest-birthday and age-last-birthday bases of the mortality table.

(21) “Unitary reserves” means the present value of all future guaranteed benefits less the present value of all future modified net premiums as described in Regulation .09 of this chapter.

(22) “Universal life insurance policy” means an individual life insurance policy under the provisions of which separately identified interest credits (other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts) and mortality or expense charges are made to the policy.

Cross References

31.03.02.02B(14)

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.04 Incorporation by Reference.

A. The Select Mortality Factors Tables from pages 830-17—830-36 of the NAIC Valuation of Life Insurance Policies Model Regulation, as adopted in March 1999, are incorporated by reference.

B. The 2001 CSO Mortality Table, as adopted by the NAIC in December 2002 and included in the Proceedings of the NAIC (2nd Quarter 2002), is incorporated by reference.

C. The 2001 CSO Preferred Class Structure Mortality Table, as adopted by the NAIC in September 2006 and included in the Proceedings of the NAIC (3rd Quarter 2006), is incorporated by reference.

Cross References

31.05.03.10A(2)(b)

31.05.03.10C(2)

31.05.03.10C(3)

31.05.03.13A

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.05 Application of Mortality Tables.

A. Policies Issued Before January 1, 2009.

(1) At the election of an insurer for any one or more specified plans of insurance, an insurer may use the 1980 CSO valuation table or the 2001 CSO Mortality Table as the minimum standard for a policy issued before January 1, 2009.

(2) If an insurer elects to use the 2001 CSO Mortality Table as the minimum standard, the insurer shall do so for both valuation and nonforfeiture purposes.

B. Policies Issued on or After January 1, 2009. Except as set forth in §C of this regulation, for a policy issued on or after January 1, 2009, an insurer shall use the 2001 CSO Mortality Table as the minimum standard.

C. Preneed Insurance Contracts.

(1) For a preneed insurance contract issued on or after January 1, 2009, and before January 1, 2012, an insurer may elect to use either the ultimate form of the 1980 CSO valuation tables or the 2001 CSO Mortality Table as the minimum standard for valuation and nonforfeiture purposes.

(2) If an insurer elects to use the 2001 CSO Mortality Table as the minimum standard for a preneed insurance contract issued on or after January 1, 2009, the insurer shall provide, as a part of the actuarial opinion memorandum submitted in support of the company's asset adequacy testing, an annual written notification to the domiciliary commissioner.

(3) The notification required by §C(2) of this regulation shall include:

(a) A complete list of all preneed insurance contract forms that use the 2001 CSO Mortality Table as the minimum standard;

(b) A certification signed by the appointed actuary stating that the reserve methodology employed by the company in determining reserves for the preneed insurance contracts issued after January 1, 2009, and using the 2001 CSO Mortality Table as the minimum standard develops adequate reserves; and

(c) Supporting information regarding the adequacy of reserves for preneed insurance contracts issued after January 1, 2009, and using the 2001 CSO Mortality Table as the minimum standard.

(4) For the purposes of the certification required in §C(3)(b) of this regulation, the preneed insurance contracts using the 2001 CSO Mortality Table as the minimum standard may not be aggregated with any other policies.

(5) For a preneed insurance contract issued on or after January 1, 2012, an insurer shall use the ultimate form of the 1980 CSO valuation tables as the minimum standard for valuation and nonforfeiture purposes.

(6) The status of a policy or contract as a preneed insurance contract is determined at the time of issue in accordance with the policy form filing.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.06 Conditions for Use of Mortality Tables.

A. Plans of Insurance With Separate Rates for Smokers and Nonsmokers. For each plan of insurance with separate rates for smokers and nonsmokers, an insurer may use:

(1) Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;

(2) Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by Insurance Article, §5-311, Annotated Code of Maryland, and composite mortality tables to determine the basic minimum reserves, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits; or

(3) Smoker and nonsmoker mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

B. Plans of Insurance Without Separate Rates for Smokers and Nonsmokers. For each plan of insurance without separate rates for smokers and nonsmokers, an insurer shall use the composite mortality tables.

C. Plans of Insurance With Separate Rates for Preferred and Standard Nonsmokers.

(1) For each plan of insurance with separate rates for preferred and standard nonsmokers, an insurer may use super preferred nonsmoker, preferred nonsmoker, and residual standard nonsmoker tables to substitute for the nonsmoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves.

(2) At the time of election and annually thereafter, except for business valued under the residual standard nonsmoker table, the appointed actuary shall certify that:

(a) The present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class; and

(b) The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.

D. Plans of Insurance With Separate Rates for Preferred and Standard Smokers.

(1) For each plan of insurance with separate rates for preferred and standard smoker lives, an insurer may use the preferred smoker and residual standard smoker tables to substitute for the smoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves.

(2) At the time of election and annually thereafter, for business valued under the preferred smoker table, the appointed actuary shall certify that:

(a) The present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class; and

(b) The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class.

E. Unless exempted by the Commissioner, every authorized insurer using the 2001 CSO Preferred Class Structure Mortality Table shall annually file with the Commissioner, with the NAIC, or with a statistical agent designated by the NAIC and acceptable to the Commissioner, statistical reports showing mortality and such other information as the Commissioner may consider necessary or expedient for the administration of the provisions of this regulation.

F. The form of the reports required pursuant to §E of this regulation, shall be established by the Commissioner, or the Commissioner may require the use of a form established by the NAIC or by a statistical agent designated by the NAIC, and acceptable to the Commissioner.

G. The use of the 2001 CSO Preferred Class Structure Mortality Table for the valuation of policies issued prior to January 1, 2007 may not be permitted in any statutory financial statement in which a company reports, with respect to any policy or portion of a policy coinsured, for either of the following:

(1) In cases where the mode of payment of the reinsurance premium is less frequent than the mode of payment of the policy premium, a reserve credit that exceeds, by more than the amount specified in this subsection as Y, the gross reserve calculated before reinsurance. Y is the amount of the gross reinsurance premium that:

(a) Provides coverage for the period from the next policy premium due date to the earlier of the end of the policy year and the next reinsurance premium due date; and

(b) Would be refunded to the ceding entity upon the termination of the policy.

(2) In cases where the mode of payment of the reinsurance premium is more frequent than the mode of payment of the policy premium, a reserve credit that is less than the gross reserve, calculated before reinsurance, by an amount that is less than the amount specified in this subsection as Z. Z is the amount of the gross reinsurance premium that the ceding entity would need to pay the assuming company to provide reinsurance coverage from the period of the next reinsurance premium due date to the next policy premium due date minus any liability established for the proportionate amount not remitted to the reinsurer.

H. For purposes of §G of this regulation, both the reserve credit and the gross reserve before reinsurance(i) for the mean reserve method shall be defined as the mean reserve minus the deferred premium asset, and (ii) for the mid-terminal reserve method shall include the unearned premium reserve. A company may estimate and adjust its accounting on an aggregate basis in order to meet the conditions to use the 2001 CSO Preferred Class Mortality Structure Table.

I. Reserve Liabilities, Cash Surrender Values, and Paid-Up Nonforfeiture Benefits. Subject to the restrictions of Regulations .02 and .10—.12 of this chapter and Insurance Article, Title 5, Subtitle 3, Annotated Code of Maryland, relative to use of the select and ultimate form of the 2001 CSO Mortality Table, an insurer may use the ultimate form or the ultimate and select form of the 2001 CSO Mortality Table to determine:

(1) Minimum reserve liabilities;

(2) Minimum cash surrender values; and

(3) Amounts of paid-up nonforfeiture benefits.

J. Asset Adequacy Analysis.

(1) When the 2001 CSO Mortality Table is the minimum reserve standard for any plan for a company, the actuarial opinion in the annual statement filed with the Commissioner shall be based on an asset adequacy analysis as specified in COMAR 31.05.01.08.

(2) The Commissioner may waive the requirement of §D(1) of this regulation for an insurer doing business in this State and in no other state.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.07 General Calculation Requirements for Contract Segmentation Method.

A. All calculations are made using:

(1) For policies issued before January 1, 2009, the 1980 CSO valuation table or the 2001 CSO Mortality Table;

(2) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table; and

(3) If elected, the optional minimum mortality standard for deficiency reserves stipulated in Regulation .10B—D of this chapter.

B. The length of a particular contract segment shall be set equal to the minimum of the value t, for which G_t is greater than R_t (if G_t never exceeds R_t the segment length is deemed to be the number of years from the beginning of the segment to the mandatory expiration date of the policy), where G_t and R_t are defined as follows:

(1) G_t = (GP_x+k+t/GP_x+k+t-l)

where

x = original issue age;

k = The number of years from the date of issue to the beginning of the segment;

t = 1, 2, . . .; t is reset to 1 at the beginning of each segment;

GP_x+k+t-l = Guaranteed gross premium per thousand of face amount, ignoring policy fees only if level for the premium paying period of the policy, for year t of the segment.

R_t = q_x+k+t/q_x+k+t-1 However, R_t may be increased or decreased by 1 percent in any policy year, at the company's option, but R_t may not be less than one;

where:

x, k, and t are as defined above, and

q_x+k+t = valuation mortality rate for deficiency reserves in policy year k+t but using the mortality of Regulation.10C(2) of this chapter if Regulation.10C(3) of this chapter is elected for deficiency reserves. If GP_x+k+t is greater than 0 and GP_x+k+t-l is equal to 0, G_t shall be deemed to be 1,000. If GP_x+k+t and GP_x+k+t-1 are both equal to 0, G_t shall be deemed to be 0.

(2) When the 2001 CSO Mortality Table is elected or required to be used, the value of “q_x+k+1” is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.

Cross References

31.05.03.02B

31.05.03.03B(4)

31.05.03.12B

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.08 General Calculation Requirements for Segmented Reserves.

A. The net premiums within each segment are a uniform percentage of the respective guaranteed gross premiums within the segment. The uniform percentage for each segment is such that, at the beginning of the segment, the present value of the net premiums within the segment equals:

(1) The present value of the death benefits within the segment; plus

(2) The present value of any unusual guaranteed cash value, as specified in Regulation .11D of this chapter, occurring at the end of the segment; less

(3) Any unusual guaranteed cash value occurring at the start of the segment; plus

(4) For the first segment only, the excess of §A(4)(a) over §A(4)(b) of this regulation as follows:

(a) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for in the first segment after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary within the first segment on which a premium falls due. The net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age 1 year higher than the age at issue of the policy.

(b) A net 1-year premium for the benefits provided for in the first year policy.

B. The length of each segment is determined by the contract segmentation method, as defined in Regulation.07B of this chapter.

C. The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the sum of the lengths of all segments of the policy.

D. For both basic reserves and deficiency reserves computed by the segmented method, present values shall include future benefits and net premiums in the current segment and in all subsequent segments.

Cross References

31.05.03.03B(12)

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.09 General Calculation Requirements for Unitary Reserves.

A. Guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy.

B. Modified net premiums are a uniform percentage of the respective guaranteed gross premiums, where the uniform percentage is such that, at issue, the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the excess of §B(1) over §B(2) of this regulation as follows:

(1) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary of the policy on which a premium falls due. The net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age 1 year higher than the age at issue of the policy;

(2) A net 1-year term premium for the benefits provided for in the first policy year.

C. The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the length from issue to the mandatory expiration of the policy.

Cross References

31.05.03.03B(21)

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.10 General Calculation Requirements for Basic Reserves and Premium Deficiency Reserves.

A. Basic Reserves.

(1) At the election of the company for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using:

(a) For policies issued before January 1, 2009, the 1980 CSO valuation table with select mortality factors or the 2001 CSO Mortality Table; and

(b) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table.

(2) If select mortality factors are elected, they may be:

(a) The 10-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;

(b) The select mortality factors incorporated by reference under Regulation .04 of this chapter; or

(c) Any other table of select mortality factors adopted by the NAIC after the effective date of this chapter and promulgated by regulation by the Commissioner for the purpose of calculating basic reserves.

B. Deficiency Reserves.

(1) Deficiency reserves, if any, are calculated for each policy as the excess, if greater than zero, of the quantity A over the basic reserve.

(2) The quantity A is obtained by recalculating the basic reserve for the policy using guaranteed gross premiums instead of net premiums when the guaranteed gross premiums are less than the corresponding net premiums.

(3) At the election of the company for any one or more specified plans of insurance, the quantity A and the corresponding net premiums used in the determination of quantity A may be based upon:

(a) For policies issued before January 1, 2009, the 1980 CSO valuation table with select mortality factors or the 2001 CSO Mortality Table; and

(b) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table.

C. Deficiency Reserves — Select Mortality Factors. If select mortality factors are elected, they may be:

(1) The 10-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;

(2) The select mortality factors incorporated by reference under Regulation .04 of this chapter;

(3) For durations in the first segment, X percent of the select mortality factors incorporated by reference under Regulation .04 of this chapter, subject to the following:

(a) X may vary by policy year, policy form, underwriting classification, issue age, or any other policy factor expected to affect mortality experience;

(b) X is such that, when using the valuation interest rate used for basic reserves, subparagraph(i) is greater than or equal to subparagraph (ii) as follows:

(i) The actuarial present value of future death benefits, calculated using the mortality rates resulting from the application of X;

(ii) The actuarial present value of future death benefits calculated using anticipated mortality experience without recognition of mortality improvement beyond the valuation date;

(c) X is such that the mortality rates resulting from the application of X are at least as great as the anticipated mortality experience, without recognition of mortality improvement beyond the valuation date, in each of the first 5 years after the valuation date;

(d) The appointed actuary shall increase X at any valuation date where it is necessary to continue to meet all the requirements of this subsection;

(e) The appointed actuary may decrease X at any valuation date as long as X continues to meet all the requirements of this subsection;

(f) The appointed actuary shall specifically take into account the adverse effect on expected mortality and lapsation of any anticipated or actual increase in gross premiums; and

(g) If X is less than 100 percent at any duration for any policy, the following requirements shall be met:

(i) Each year, the appointed actuary shall prepare an actuarial opinion and memorandum for the company in conformance with the requirements of COMAR 31.05.01;

(ii) The appointed actuary shall disclose, in the Regulatory Asset Adequacy Issues Summary, the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods; and

(iii) Each year, the appointed actuary shall issue an opinion for all policies subject to this chapter stating whether the mortality rates resulting from the application of X meet the requirements of this subsection, with the opinion supported by an actuarial report, subject to appropriate Actuarial Standards of Practice promulgated by the Actuarial Standards Board of the American Academy of Actuaries, and using X factors that reflect anticipated future mortality, without recognition of mortality improvement beyond the valuation date, taking into account relevant emerging experience; or

(4) Any other table of select mortality factors adopted by the NAIC after the effective date of this chapter and promulgated by regulation by the Commissioner for the purpose of calculating deficiency reserves.

D. In demonstrating compliance with the conditions of §C(3) of this regulation, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is:

(1) Explicitly required by regulation; or

(2) Necessary to be in compliance with relevant Actuarial Standards of Practice.

E. This section applies to both basic reserves and deficiency reserves that are determined by using the 1980 CSO valuation tables. Any set of select mortality factors may be used only for the first segment. If the first segment is less than 10 years, the appropriate 10-year select mortality factors incorporated into the 1980 amendments to NAIC Standard Valuation Law may be used thereafter through the tenth policy year from the date of issue.

F. In determining basic reserves or deficiency reserves, guaranteed gross premiums without policy fees may be used when the calculation involves the guaranteed gross premium but only if the policy fee is a level dollar amount after the first policy year. In determining deficiency reserves, policy fees may be included in guaranteed gross premiums even if not included in the actual calculation of basic reserves.

G. Reserves for Policies With Certain Changes Made After Issue. Reserves for policies that have changes to guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits that are unilaterally made by the insurer after issue and that are effective for more than 1 year after the date of the change shall be the greatest of the following:

(1) Reserves calculated ignoring the guarantee;

(2) Reserves assuming the guarantee was made at issue; and

(3) Reserves assuming that the policy was issued on the date of the guarantee.

H. Documentation of Adequacy of Reserves.

(1) The Commissioner may require that the company document the extent of the adequacy of reserves for specified blocks, including policies issued before the effective date of this chapter.

(2) The documentation may include a demonstration of the extent to which aggregation with other nonspecified blocks of business is relied on in the formation of the appointed actuary opinion pursuant to and consistent with the requirements of COMAR 31.05.01.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.11 Calculation of Minimum Valuation Standard for Policies with Guaranteed Nonlevel Gross Premiums or Guaranteed Nonlevel Benefits (Other than Universal Life Policies).

A. Basic Reserves. Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same valuation mortality table and selection factors. At the option of the insurer, in calculating segmented reserves and net premiums, either of the following adjustments may be made:

(1) Treat the unitary reserve, if greater than zero, applicable at the end of each segment as a pure endowment, and subtract the unitary reserve, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment; or

(2) Treat the guaranteed cash surrender value, if greater than zero, applicable at the end of each segment as a pure endowment, and subtract the guaranteed cash surrender value, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.

B. Deficiency Reserves.

(1) The deficiency reserve at any duration shall be calculated:

(a) On a unitary basis if the corresponding basic reserve determined by §A of this regulation is unitary;

(b) On a segmented basis if the corresponding basic reserve determined by §A of this regulation is segmented; or

(c) On the segmented basis if the corresponding basic reserve determined by §A of this regulation is equal to both the segmented reserve and the unitary reserve.

(2) This section applies to a policy for which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used in determining the basic reserves, but using the minimum valuation standards of mortality as specified in Regulation .10B—D of this chapter, and rate of interest.

(3) Deficiency reserves, if any, shall be calculated for each policy as the excess if greater than zero, for the current and all remaining periods, of the quantity A over the basic reserve, where A is obtained as indicated in Regulation.10B—D of this chapter.

(4) For deficiency reserves determined on a segmented basis, the quantity A is determined using segment lengths equal to those determined for segmented basic reserves.

C. Minimum Value.

(1) Basic reserves may not be less than the tabular cost of insurance for the balance of the policy year, if mean reserves are used.

(2) Basic reserves may not be less than the tabular cost of insurance for the balance of the current modal period or to the paid-to-date, if later, but not beyond the next policy anniversary, if mid-terminal reserves are used.

(3) Subject to §C(4) of this regulation, the valuation mortality table used in determining the tabular cost of insurance shall be:

(a) For policies issued before January 1, 2009, the 1980 CSO valuation table or the 2001 CSO Mortality Table; and

(b) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table.

(4) The tabular cost of insurance shall use the same valuation mortality table and interest rates as that used for the calculation of the segmented reserves.

(5) If select mortality factors are used, they shall be the 10-year select factors incorporated into the 1980 amendments of the NAIC Standard Valuation Law.

(6) Total reserves, including basic reserves, deficiency reserves, and any reserves held for supplemental benefits that would expire upon contract termination may not be less than the amount that the policyowner would receive, including the cash surrender value of the supplemental benefits, if any, referred to above, exclusive of any deduction for policy loans, upon termination of the policy.

D. Unusual Pattern of Guaranteed Cash Surrender Values.

(1) For a policy with an unusual pattern of guaranteed cash surrender values, the reserves actually held before the first unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the first unusual guaranteed cash surrender value as a pure endowment and treating the policy as an n year policy providing term insurance plus a pure endowment equal to the unusual cash surrender value, where n is the number of years from the date of issue to the date the unusual cash surrender value is scheduled.

(2) The reserves actually held subsequent to any unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the policy as an n year policy providing term insurance plus a pure endowment equal to the next unusual guaranteed cash surrender value, and treating any unusual guaranteed cash surrender value at the end of the prior segment as a net single premium, where:

(a) n is the number of years from the date of the last unusual guaranteed cash surrender value before the valuation date to the earlier of:

(i) The date of the next unusual guaranteed cash surrender value, if any, that is scheduled after the valuation date, or

(ii) The mandatory expiration date of the policy;

(b) The net premium for a given year during the n year period is equal to the product of the net to gross ratio and the respective gross premium; and

(i) The present value, at the beginning of the n year period, of death benefits payable during the n year period plus the present value, at the beginning of the n year period, of the next unusual guaranteed cash surrender value, if any, minus the amount of the last unusual guaranteed cash surrender value, if any, scheduled at the beginning of the n year period,

(ii) The present value, at the beginning of the n year period, of the scheduled gross premiums payable during the n year period.

(3) For purposes of this section, a policy is considered to have an unusual pattern of guaranteed cash surrender values if any future guaranteed cash surrender value exceeds the prior year's guaranteed cash surrender value by more than the sum of:

(a) 110 percent of the scheduled gross premium for that year;

(b) 110 percent of one year's accrued interest on the sum of the prior year's guaranteed cash surrender value and the scheduled gross premium using the nonforfeiture interest rate used for calculating policy guaranteed cash surrender values; and

E. Optional Exemption for Yearly Renewable Term Reinsurance. At the option of the company, the following approach for reserves on YRT reinsurance may be used:

(1) Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year;

(2) Basic reserves may not be less than the tabular cost of insurance for the appropriate period, as defined in §C of this regulation;

(3) Deficiency reserves:

(a) For each policy year, the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium is calculated,

(b) May not be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with §E(3)(a) of this regulation;

(4) For purposes of this section, the calculations use the maximum valuation interest rate and:

(a) For policies issued before January 1, 2009, the 1980 CSO mortality tables with or without 10-year select mortality factors or the ultimate mortality rates in the 2001 CSO Mortality Table; and

(b) For policies issued on or after January 1, 2009, the ultimate mortality rates in the 2001 CSO Mortality Table;

(5) A reinsurance agreement shall be considered YRT reinsurance for purposes of this section if only the mortality risk is reinsured;

(6) If the assuming company chooses this optional exemption, the ceding company's reinsurance reserve credit is limited to the amount of reserve held by the assuming company for the affected policies.

F. Optional Exemption for Attained-Age-Based Yearly Renewable Term Life Insurance Policies. At the option of the company, the following approach for reserves for attained-age-based YRT life insurance policies may be used:

(1) Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year;

(2) Basic reserves may not be less than the tabular cost of insurance for the appropriate period, as defined in §C of this regulation;

(3) Deficiency reserves:

(a) For each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium,

(b) May not be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with §F(3)(a) of this regulation;

(4) For purposes of this section, the calculations use the maximum valuation interest rate and:

(a) For policies issued before January 1, 2009, the 1980 CSO valuation tables with or without 10-year select mortality factors or the ultimate mortality rates in the 2001 CSO Mortality Table; and

(b) For policies issued on or after January 1, 2009, the ultimate mortality rates in the 2001 CSO Mortality Table;

(5) A policy shall be considered an attained-age-based YRT life insurance policy for purposes of this section if the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are:

(a) Based upon the attained age of the insured such that the rate for any given policy at a given attained age of the insured is independent of the year the policy was issued, and

(b) The same as the premium rates for policies covering all insureds of the same sex, risk class, plan of insurance, and attained age;

(6) For policies that become attained-age-based YRT policies after an initial period of coverage, the approach of this section may be used after the initial period if:

(a) The initial period is constant for all insureds of the same sex, risk class, and plan of insurance or the initial period runs to a common attained age for all insureds of the same sex, risk class, and plan of insurance, and

(b) After the initial period of coverage, the policy meets the conditions of §F(6) of this regulation;

(7) If this election is made, this approach shall be applied in determining reserves for all attained-age-based YRT life insurance policies issued on or after the effective date of this chapter.

G. Exemption from Unitary Reserves for Certain n Year Renewable Term Life Insurance Policies. Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met:

(1) The policy consists of a series of n year periods, including the first period and all renewal periods, where n is the same for each period except that for the first renewal period, n may be shortened or extended to reach the expiration age, if this final renewal period is less than 10 years and less than twice the size of the earlier n year periods, and for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level;

(2) The guaranteed gross premiums in all n year periods are not less than the corresponding net premiums based upon:

(a) For policies issued before January 1, 2009, the 1980 CSO Tables with or without the 10-year select mortality factors or the ultimate mortality rates in the 2001 CSO Mortality Tables; and

(b) For policies issued on or after January 1, 2009, the ultimate mortality rates in the 2001 CSO Mortality Tables; and

(3) There are no cash surrender values in any policy year.

H. Exemption from Unitary Reserves for Certain Juvenile Policies. Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met, based upon the initial current premium scale at issue:

(1) The insured is 24 years old or younger;

(2) Until the insured reaches the end of the juvenile period, which shall occur at or before age 25, the gross premiums and death benefits are level, and there are no cash surrender values; and

(3) After the end of the juvenile period, gross premiums are level for the remainder of the premium paying period, and death benefits are level for the remainder of the life of the policy.

Cross References

31.05.03.02C(1)

31.05.03.08A(2)

31.05.03.12C

31.05.08.29B(3)(a)(i)

31.05.08.29B(3)(a)(ii)

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.12 Calculation of Minimum Valuation Standard for Flexible Premium and Fixed Premium Universal Life Insurance Policies that Contain Provisions Resulting in the Ability of a Policyowner to Keep a Policy in Force over a Secondary Guarantee Period.

A. General.

(1) Policies with a secondary guarantee include a policy:

(a) With a guarantee that the policy remains in force at the original schedule of benefits, subject only to the payment of specified premiums;

(b) In which the minimum premium at any duration is less than the corresponding 1-year valuation premium, calculated using the maximum valuation interest rate and:

(i) For policies issued before January 1, 2009, the 1980 CSO valuation tables with or without 10-year select mortality factors or the ultimate mortality rates in the 2001 CSO Mortality Table; and

(ii) For policies issued on or after January 1, 2009, the ultimate mortality rates in the 2001 CSO Mortality Table; or

(2) A secondary guarantee period is the period for which the policy is guaranteed to remain in force subject only to a secondary guarantee. When a policy contains more than one secondary guarantee, the minimum reserve shall be the greatest of the respective minimum reserves at that valuation date of each unexpired secondary guarantee, ignoring all other secondary guarantees. Secondary guarantees that are unilaterally changed by the insurer after issue shall be considered to have been made at issue. Reserves described in §§B and C of this regulation shall be recalculated from issue to reflect the changes.

(3) Specified premiums mean the premiums specified in the policy, the payment of which guarantees that the policy will remain in force at the original schedule of benefits, but which otherwise would be insufficient to keep the policy in force in the absence of the guarantee if maximum mortality and expense charges and minimum interest credits were made and any applicable surrender charges were assessed.

(4) For purposes of this regulation, the minimum premium for any policy year is the premium that, when paid into a policy with a zero account value at the beginning of the policy year, produces a zero account value at the end of the policy year. The minimum premium calculation shall use the policy cost factors, including mortality charges, loads, and expense charges, and the interest crediting rate, which are all guaranteed at issue.

(5) The 1-year valuation premium means the net 1-year premium based upon the original schedule of benefits for a given policy year. The 1-year valuation premiums for all policy years are calculated at issue. The select mortality factors defined in Regulation .10C(2), (3), and (4) of this chapter may not be used to calculate the 1-year valuation premiums.

(6) The 1-year valuation premium should reflect the frequency of fund processing, as well as the distribution of deaths assumption employed in the calculation of the monthly mortality charges to the fund.

B. Basic Reserves for the Secondary Guarantees. Basic reserves for the secondary guarantees shall be the segmented reserves for the secondary guarantee period. In calculating the segments and the segmented reserves, the gross premiums shall be set equal to the specified premiums, if any, or otherwise to the minimum premiums, that keep the policy in force and the segments are determined according to the contract segmentation method as defined in Regulation .07B of this chapter.

C. Deficiency Reserves for the Secondary Guarantees. Deficiency reserves, if any, for the secondary guarantees shall be calculated for the secondary guarantee period in the same manner as described in Regulation .11B of this chapter with gross premiums set equal to the specified premiums, if any, or otherwise to the minimum premiums that keep the policy in force.

D. Minimum Reserves. The minimum reserves during the secondary guarantee period are the greater of:

(1) The basic reserves for the secondary guarantee plus the deficiency reserve, if any, for the secondary guarantees; or

(2) The minimum reserves required by other rules or regulations governing universal life plans.

Cross References

31.05.03.02C(2)

31.05.03.03B(11)(b)

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.13 Select Mortality Factors.

A. The tables of the Select Mortality Factors, which are incorporated by reference under Regulation .04 of this chapter, are the bases to which the respective percentage of Regulation .10C(2) and (3) of this chapter are applied.

B. The six tables of base select mortality factors, which are incorporated by reference, include:

(1) Male aggregate;

(2) Male nonsmoker;

(3) Male smoker;

(4) Female aggregate;

(5) Female nonsmoker; and

(6) Female smoker.

C. These tables apply to both age last birthday and age nearest birthday mortality tables. For sex-blended mortality tables, select mortality factors are computed in the same proportion as the underlying mortality. For example, for the 1980 CSO-B Table, the calculated base select mortality factors are 80 percent of the appropriate male table, plus 20 percent of the appropriate female table.

Cross References

31.05.03.02B

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.14 Gender-Blended Tables.

An insurer that issues an ordinary life insurance policy for delivery in this State on or after January 1, 2004, that utilizes the same premium rates charged for male and female lives may:

A. Substitute a mortality table that is a blend of the 2001 CSO Mortality Table (F) and the 2001 CSO Mortality Table (M) instead of the 2001 CSO Mortality Table for use in determining:

(1) Minimum cash surrender values; and

(2) Amounts of paid-up nonforfeiture benefits;

B. Choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002; and

C. Issue the same kind of life insurance policy on both a sex-distinct and a sex-neutral basis.

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.03.15 2001 CSO Preferred Class Structure Mortality Tables.

A. This regulation applies to policies issued on or after January 1, 2004.

B. Election of Minimum Valuation Standard.

(1) At the election of the insurer for any one or more specified plans of insurance and subject to satisfying the conditions stated in this chapter, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO smoker or nonsmoker Mortality Table as the minimum valuation standard for policies issued on or after January 1, 2007.

(2) For policies issued on or after January 1, 2004, and prior to January 1 2007, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO smoker or nonsmoker Mortality Table with the consent of the Commissioner and subject to the conditions in Regulation .06C—H of this chapter. In determining such consent, the Commissioner may rely on the consent of the Commissioner of the company's state of domicile.

(3) The election shall be made for each calendar year of issue.

(4) No election in §B(1) and (2) of this regulation shall be made until the insurer demonstrates that at least 20 percent of the business to be valued on the basis of the 2001 CSO Preferred Class Structure Mortality Table is in one or more of the preferred classes.

(5) A table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001 CSO Mortality Table, pursuant to the requirements of this chapter, is treated as part of the 2001 CSO Mortality Table only for purposes of reserve valuation pursuant to the requirements of the NAIC model regulation “Recognition of the 2001 CSO Mortality Table For Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits Model Regulation,” referenced in §C of this regulation.

C. National Association of Insurance Commissioners', “Recognition of the 2001 CSO Mortality Table For Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits Model Regulation”.

FORM AT END OF CHAPTER

Attachments

31.05.03.15-form

History

Administrative History: Effective date: May 5, 1997 (24:9 Md. R. 656)
Administrative History: Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register.
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326); revised permanently effective May 15, 2000 (27:8 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2004 (30:24 Md. R. 1746)
Administrative History: Regulation .03B amended effective March 26, 2007 (34:6 Md. R. 630); December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .04C adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .05B amended effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C adopted effective December 15, 2008 (35:25 Md. R. 2151)
Administrative History: Regulation .05C amended effective December 28, 2009 (36:26 Md. R. 1999)
Administrative History: Regulation .06 amended effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .06 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .10C, H amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Administrative History: Regulation .15 adopted effective March 26, 2007 (34:6 Md. R. 630)
Administrative History: Regulation .15 amended as an emergency provision effective January 25, 2010 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674)
Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland

COMAR 31.05.04.01 Purpose.

The purpose of this chapter is to approve the use of the following mortality tables adopted by the National Association of Insurance Commissioners after 1980 as a basis for determining the minimum standards of valuation for individual annuity and pure endowment contracts:

A. The 1983 Table “a”;

B. The Annuity 2000 Mortality Table; and

C. The 2012 Individual Annuity Reserving Table.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Annuity 2000 Mortality Table” means the mortality table:

(a) Developed by the Society of Actuaries Committee on Life Insurance Research; and

(b) Set out in Regulation .04 of this chapter.

(2) “Generational mortality table” means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a period table and a projection scale containing rates of mortality improvement.

(3) “Period table” means a table of mortality rates applicable to a given calendar year.

(4) “Projection Scale G2” means a table:

(a) Containing annual rates, G2_x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012;

(b) Developed by the Society of Actuaries Committee on Life Insurance Research; and

(5) "1983 Table “a” means the mortality table:

(a) Developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation;

(b) Adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners; and

(6) “2012 Individual Annuity Mortality Period Life Table” or “2012 IAM Period Table” means the period table containing loaded mortality rates for calendar year 2012. This table:

(a) Contains rates, q_x²⁰¹², developed by the Society of Actuaries Committee on Life Insurance Research; and

(b) Is set out in Regulation .06 of this chapter.

(7) “2012 Individual Annuity Reserving Table” or “2012 IAR Table” means the generational mortality table:

(a) Developed by the Society of Actuaries Committee on Life Insurance Research; and

(b) Containing rates, q_x²⁰¹²⁺ⁿ, that are derived from a combination of the 2012 IAM Period Table and Projection Scale G2 using the methodology set out in Regulation .08 of this chapter.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.03 Table “a”.

The 1983 Table “a”, as shown below, is the mortality table designated by that name and adopted in June, 1982, by the National Association of Insurance Commissioners.

| 1983 TABLE “a”—1,000qx | | | | --- | --- | --- | | Age | Males | Females | | 5 | 0.377 | 0.194 | | 6 | 0.350 | 0.160 | | 7 | 0.333 | 0.134 | | 8 | 0.352 | 0.134 | | 9 | 0.368 | 0.136 | | 10 | 0.382 | 0.141 | | 11 | 0.394 | 0.147 | | 12 | 0.405 | 0.155 | | 13 | 0.415 | 0.165 | | 14 | 0.425 | 0.175 | | 15 | 0.435 | 0.183 | | 16 | 0.446 | 0.201 | | 17 | 0.458 | 0.214 | | 18 | 0.472 | 0.229 | | 19 | 0.488 | 0.244 | | 20 | 0.505 | 0.260 | | 21 | 0.525 | 0.276 | | 22 | 0.546 | 0.293 | | 23 | 0.570 | 0.311 | | 24 | 0.596 | 0.330 | | 25 | 0.622 | 0.349 | | 26 | 0.650 | 0.368 | | 27 | 0.677 | 0.387 | | 28 | 0.704 | 0.405 | | 29 | 0.731 | 0.423 | | 30 | 0.759 | 0.441 | | 31 | 0.786 | 0.460 | | 32 | 0.814 | 0.479 | | 33 | 0.843 | 0.499 | | 34 | 0.876 | 0.521 | | 35 | 0.917 | 0.545 | | 36 | 0.968 | 0.574 | | 37 | 1.032 | 0.607 | | 38 | 1.114 | 0.646 | | 39 | 1.216 | 0.691 | | 40 | 1.341 | 0.742 | | 41 | 1.492 | 0.801 | | 42 | 1.673 | 0.867 | | 43 | 1.886 | 0.942 | | 44 | 2.129 | 1.026 | | 45 | 2.399 | 1.122 | | 46 | 2.693 | 1.231 | | 47 | 3.009 | 1.356 | | 48 | 3.343 | 1.499 | | 49 | 3.694 | 1.657 | | 50 | 4.057 | 1.830 | | 51 | 4.431 | 2.016 | | 52 | 4.812 | 2.215 | | 53 | 5.198 | 2.426 | | 54 | 5.591 | 2.650 | | 55 | 5.994 | 2.891 | | 56 | 6.409 | 3.151 | | 57 | 6.839 | 3.432 | | 58 | 7.290 | 3.739 | | 59 | 7.782 | 4.081 | | 60 | 8.338 | 4.467 | | 61 | 8.983 | 4.908 | | 62 | 9.740 | 5.413 | | 63 | 10.630 | 5.990 | | 64 | 11.664 | 6.633 | | 65 | 12.851 | 7.336 | | 66 | 14.199 | 8.090 | | 67 | 15.717 | 8.888 | | 68 | 17.414 | 9.731 | | 68 | 19.296 | 10.653 | | 70 | 21.371 | 11.697 | | 71 | 23.647 | 12.905 | | 72 | 26.131 | 14.319 | | 73 | 28.835 | 15.980 | | 74 | 31.794 | 17.909 | | 75 | 35.046 | 20.127 | | 76 | 38.631 | 22.654 | | 77 | 42.587 | 25.509 | | 78 | 46.951 | 28.717 | | 79 | 51.755 | 32.328 | | 80 | 57.026 | 36.395 | | 81 | 62.791 | 40.975 | | 82 | 69.081 | 46.121 | | 83 | 75.908 | 51.889 | | 84 | 83.230 | 58.336 | | 85 | 90.987 | 65.518 | | 86 | 99.122 | 73.493 | | 87 | 107.577 | 82.318 | | 88 | 116.316 | 92.017 | | 89 | 125.394 | 102.491 | | 90 | 134.887 | 113.605 | | 91 | 144.873 | 125.227 | | 92 | 155.429 | 137.222 | | 93 | 166.629 | 149.462 | | 94 | 178.537 | 161.834 | | 95 | 191.214 | 174.228 | | 96 | 204.721 | 186.535 | | 97 | 219.120 | 198.646 | | 98 | 234.735 | 211.102 | | 99 | 251.889 | 224.445 | | 100 | 270.906 | 239.215 | | 101 | 292.111 | 255.953 | | 102 | 315.826 | 275.201 | | 103 | 342.377 | 297.500 | | 104 | 372.086 | 323.390 | | 105 | 405.278 | 353.414 | | 106 | 442.277 | 388.111 | | 107 | 483.406 | 428.023 | | 108 | 528.989 | 473.692 | | 109 | 579.351 | 525.658 | | 110 | 634.814 | 584.462 | | 111 | 695.704 | 650.646 | | 112 | 762.343 | 724.750 | | 113 | 835.056 | 807.316 | | 114 | 914.167 | 898.885 | | 115 | 1000.000 | 1000.000 |

Cross References

31.05.04.02B(5)(c)

31.05.04.05B

31.05.05.02B(2)(c)

31.05.05.05A

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.04 Annuity 2000 Mortality Table.

| | 1000q | | | --- | --- | --- | | Age Nearest Birthday (x) | Male | Female* | | 5 | 0.291 | 0.171 | | 6 | 0.270 | 0.141 | | 7 | 0.257 | 0.118 | | 8 | 0.294 | 0.118 | | 9 | 0.325 | 0.121 | | 10 | 0.350 | 0.126 | | 11 | 0.371 | 0.133 | | 12 | 0.388 | 0.142 | | 13 | 0.402 | 0.152 | | 14 | 0.414 | 0.164 | | 15 | 0.425 | 0.177 | | 16 | 0.437 | 0.190 | | 17 | 0.449 | 0.204 | | 18 | 0.463 | 0.219 | | 19 | 0.480 | 0.234 | | 20 | 0.499 | 0.250 | | 21 | 0.519 | 0.265 | | 22 | 0.542 | 0.281 | | 23 | 0.566 | 0.298 | | 24 | 0.592 | 0.314 | | 25 | 0.616 | 0.331 | | 26 | 0.639 | 0.347 | | 27 | 0.659 | 0.362 | | 28 | 0.675 | 0.376 | | 29 | 0.687 | 0.389 | | 30 | 0.694 | 0.402 | | 31 | 0.699 | 0.414 | | 32 | 0.700 | 0.425 | | 33 | 0.701 | 0.436 | | 34 | 0.702 | 0.449 | | 35 | 0.704 | 0.463 | | 36 | 0.719 | 0.481 | | 37 | 0.749 | 0.504 | | 38 | 0.796 | 0.532 | | 39 | 0.864 | 0.567 | | 40 | 0.953 | 0.609 | | 41 | 1.065 | 0.658 | | 42 | 1.201 | 0.715 | | 43 | 1.362 | 0.781 | | 44 | 1.547 | 0.855 | | 45 | 1.752 | 0.939 | | 46 | 1.974 | 1.035 | | 47 | 2.211 | 1.141 | | 48 | 2.460 | 1.261 | | 49 | 2.721 | 1.393 | | 50 | 2.994 | 1.538 | | 51 | 3.279 | 1.695 | | 52 | 3.576 | 1.864 | | 53 | 3.884 | 2.047 | | 54 | 4.203 | 2.244 | | 55 | 4.534 | 2.457 | | 56 | 4.876 | 2.689 | | 57 | 5.228 | 2.942 | | 58 | 5.593 | 3.218 | | 59 | 5.988 | 3.523 | | 60 | 6.428 | 3.863 | | 61 | 6.933 | 4.242 | | 62 | 7.520 | 4.668 | | 63 | 8.207 | 5.144 | | 64 | 9.008 | 5.671 | | 65 | 9.940 | 6.250 | | 66 | 11.016 | 6.878 | | 67 | 12.251 | 7.555 | | 68 | 13.657 | 8.287 | | 69 | 15.233 | 9.102 | | 70 | 16.979 | 10.034 | | 71 | 18.891 | 11.117 | | 72 | 20.967 | 12.386 | | 73 | 23.209 | 13.871 | | 74 | 25.644 | 15.592 | | 75 | 28.304 | 17.564 | | 76 | 31.220 | 19.805 | | 77 | 34.425 | 22.328 | | 78 | 37.948 | 25.158 | | 79 | 41.812 | 28.341 | | 80 | 46.037 | 31.933 | | 81 | 50.643 | 35.985 | | 82 | 55.651 | 40.552 | | 83 | 61.080 | 45.690 | | 84 | 66.948 | 51.456 | | 85 | 73.275 | 57.913 | | 86 | 80.076 | 65.119 | | 87 | 87.370 | 73.136 | | 88 | 95.169 | 81.991 | | 89 | 103.455 | 91.577 | | 90 | 112.208 | 101.758 | | 91 | 121.402 | 112.395 | | 92 | 131.017 | 123.349 | | 93 | 141.030 | 134.486 | | 94 | 151.422 | 145.689 | | 95 | 162.179 | 156.846 | | 96 | 173.279 | 167.841 | | 97 | 184.706 | 178.563 | | 98 | 196.946 | 189.604 | | 99 | 210.484 | 201.557 | | 100 | 225.806 | 215.013 | | 101 | 243.398 | 230.565 | | 102 | 263.745 | 248.805 | | 103 | 287.334 | 270.326 | | 104 | 314.649 | 295.719 | | 105 | 346.177 | 325.576 | | 106 | 382.403 | 360.491 | | 107 | 423.813 | 401.054 | | 108 | 470.893 | 447.860 | | 109 | 524.128 | 501.498 | | 110 | 584.004 | 562.563 | | 111 | 651.007 | 631.645 | | 112 | 725.622 | 709.338 | | 113 | 808.336 | 796.233 | | 114 | 899.633 | 892.923 | | 115 | 1000.000 | 1000.000 |

*Based on 50% of Female Improvement Scale G.

Cross References

31.05.04.02B(1)(b)

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.05 Valuation Standards.

A. In valuing the reserve liabilities under individual annuity and pure endowment contracts in accordance with the provisions of Insurance Article, §5-305(c) and (d), Annotated Code of Maryland, insurers may use either the 1971 Individual Annuity Mortality Table or the 1983 Table “a” for contracts issued on or after July 1, 1980, and before January 1, 1987.

B. Except as provided in §§C, D, and E of this regulation, the 1983 Table “a”, as shown in Regulation .03 of this chapter, is to be used by insurers in valuing reserve liabilities under individual annuity and pure endowment contracts in accordance with the provisions of Insurance Article, §5-305(c) and (d), Annotated Code of Maryland, for contracts issued on and after January 1, 1987.

C. Except as provided in §§D and E of this regulation, either the 1983 Table “a” or the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after July 1, 2004.

D. Except as provided in §§E and F of this regulation, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after July 1, 2005 and before January 1, 2015.

E. Except as provided in §F of this regulation, the 2012 IAR Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.

F. The 1983 Table “a” without projection shall be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after July 1, 2005, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:

(1) Settlements of various forms of claims pertaining to court settlements or out-of-court settlements from tort actions;

(2) Settlements involving similar actions such as Workers' Compensation claims; or

(3) Settlements of long-term disability claims if a temporary or life annuity has been used instead of continuing disability payments.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.06 2012 IAM Period Table.

The 2012 Individual Annuity Mortality Period Life Table, as shown below, is the mortality table designated by that name and developed by the Society of Actuaries Committee on Life Insurance Research.

| | 1000 q_x²⁰¹² | | | --- | --- | --- | | Age Nearest Birthday | Male | Female | | 0 | 1.605 | 1.621 | | 1 | 0.401 | 0.405 | | 2 | 0.275 | 0.259 | | 3 | 0.229 | 0.179 | | 4 | 0.174 | 0.137 | | 5 | 0.168 | 0.125 | | 6 | 0.165 | 0.117 | | 7 | 0.159 | 0.110 | | 8 | 0.143 | 0.095 | | 9 | 0.129 | 0.088 | | 10 | 0.113 | 0.085 | | 11 | 0.111 | 0.086 | | 12 | 0.132 | 0.094 | | 13 | 0.169 | 0.108 | | 14 | 0.213 | 0.131 | | 15 | 0.254 | 0.156 | | 16 | 0.293 | 0.179 | | 17 | 0.328 | 0.198 | | 18 | 0.359 | 0.211 | | 19 | 0.387 | 0.221 | | 20 | 0.414 | 0.228 | | 21 | 0.443 | 0.234 | | 22 | 0.473 | 0.240 | | 23 | 0.513 | 0.245 | | 24 | 0.554 | 0.247 | | 25 | 0.602 | 0.250 | | 26 | 0.655 | 0.256 | | 27 | 0.688 | 0.261 | | 28 | 0.710 | 0.270 | | 29 | 0.727 | 0.281 | | 30 | 0.741 | 0.300 | | 31 | 0.751 | 0.321 | | 32 | 0.754 | 0.338 | | 33 | 0.756 | 0.351 | | 34 | 0.756 | 0.365 | | 35 | 0.756 | 0.381 | | 36 | 0.756 | 0.402 | | 37 | 0.756 | 0.429 | | 38 | 0.756 | 0.463 | | 39 | 0.800 | 0.504 | | 40 | 0.859 | 0.552 | | 41 | 0.926 | 0.600 | | 42 | 0.999 | 0.650 | | 43 | 1.069 | 0.697 | | 44 | 1.142 | 0.740 | | 45 | 1.219 | 0.780 | | 46 | 1.318 | 0.825 | | 47 | 1.454 | 0.885 | | 48 | 1.627 | 0.964 | | 49 | 1.829 | 1.051 | | 50 | 2.057 | 1.161 | | 51 | 2.302 | 1.308 | | 52 | 2.545 | 1.460 | | 53 | 2.779 | 1.613 | | 54 | 3.011 | 1.774 | | 55 | 3.254 | 1.950 | | 56 | 3.529 | 2.154 | | 57 | 3.845 | 2.399 | | 58 | 4.213 | 2.700 | | 59 | 4.631 | 3.054 | | 60 | 5.096 | 3.460 | | 61 | 5.614 | 3.916 | | 62 | 6.169 | 4.409 | | 63 | 6.759 | 4.933 | | 64 | 7.398 | 5.507 | | 65 | 8.106 | 6.146 | | 66 | 8.548 | 6.551 | | 67 | 9.076 | 7.039 | | 68 | 9.708 | 7.628 | | 69 | 10.463 | 8.311 | | 70 | 11.357 | 9.074 | | 71 | 12.418 | 9.910 | | 72 | 13.675 | 10.827 | | 73 | 15.150 | 11.839 | | 74 | 16.860 | 12.974 | | 75 | 18.815 | 14.282 | | 76 | 21.031 | 15.799 | | 77 | 23.540 | 17.550 | | 78 | 26.375 | 19.582 | | 79 | 29.572 | 21.970 | | 80 | 33.234 | 24.821 | | 81 | 37.533 | 28.351 | | 82 | 42.261 | 32.509 | | 83 | 47.441 | 37.329 | | 84 | 53.233 | 42.830 | | 85 | 59.855 | 48.997 | | 86 | 67.514 | 55.774 | | 87 | 76.340 | 63.140 | | 88 | 86.388 | 71.066 | | 89 | 97.634 | 79.502 | | 90 | 109.993 | 88.377 | | 91 | 123.119 | 97.491 | | 92 | 137.168 | 107.269 | | 93 | 152.171 | 118.201 | | 94 | 168.194 | 130.969 | | 95 | 185.260 | 146.449 | | 96 | 197.322 | 163.908 | | 97 | 214.751 | 179.695 | | 98 | 232.507 | 196.151 | | 99 | 250.397 | 213.150 | | 100 | 268.607 | 230.722 | | 101 | 290.016 | 251.505 | | 102 | 311.849 | 273.007 | | 103 | 333.962 | 295.086 | | 104 | 356.207 | 317.591 | | 105 | 380.000 | 340.362 | | 106 | 400.000 | 362.371 | | 107 | 400.000 | 384.113 | | 108 | 400.000 | 400.000 | | 109 | 400.000 | 400.000 | | 110 | 400.000 | 400.000 | | 111 | 400.000 | 400.000 | | 112 | 400.000 | 400.000 | | 113 | 400.000 | 400.000 | | 114 | 400.000 | 400.000 | | 115 | 400.000 | 400.000 | | 116 | 400.000 | 400.000 | | 117 | 400.000 | 400.000 | | 118 | 400.000 | 400.000 | | 119 | 400.000 | 400.000 | | 120 | 1000.000 | 1000.000 |

Cross References

31.05.04.02B(6)(b)

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.07 Projection Scale G2.

Projection Scale G2, as shown below, is a table containing annual rates, G2_x , of mortality improvement by age for projecting future mortality rates beyond calendar year 2012 and was developed by the Society of Actuaries Committee on Life Insurance Research.

| | G2_x | | | --- | --- | --- | | Age Nearest Birthday | Male | Female | | 0 | 0.010 | 0.010 | | 1 | 0.010 | 0.010 | | 2 | 0.010 | 0.010 | | 3 | 0.010 | 0.010 | | 4 | 0.010 | 0.010 | | 5 | 0.010 | 0.010 | | 6 | 0.010 | 0.010 | | 7 | 0.010 | 0.010 | | 8 | 0.010 | 0.010 | | 9 | 0.010 | 0.010 | | 10 | 0.010 | 0.010 | | 11 | 0.010 | 0.010 | | 12 | 0.010 | 0.010 | | 13 | 0.010 | 0.010 | | 14 | 0.010 | 0.010 | | 15 | 0.010 | 0.010 | | 16 | 0.010 | 0.010 | | 17 | 0.010 | 0.010 | | 18 | 0.010 | 0.010 | | 19 | 0.010 | 0.010 | | 20 | 0.010 | 0.010 | | 21 | 0.010 | 0.010 | | 22 | 0.010 | 0.010 | | 23 | 0.010 | 0.010 | | 24 | 0.010 | 0.010 | | 25 | 0.010 | 0.010 | | 26 | 0.010 | 0.010 | | 27 | 0.010 | 0.010 | | 28 | 0.010 | 0.010 | | 29 | 0.010 | 0.010 | | 30 | 0.010 | 0.010 | | 31 | 0.010 | 0.010 | | 32 | 0.010 | 0.010 | | 33 | 0.010 | 0.010 | | 34 | 0.010 | 0.010 | | 35 | 0.010 | 0.010 | | 36 | 0.010 | 0.010 | | 37 | 0.010 | 0.010 | | 38 | 0.010 | 0.010 | | 39 | 0.010 | 0.010 | | 40 | 0.010 | 0.010 | | 41 | 0.010 | 0.010 | | 42 | 0.010 | 0.010 | | 43 | 0.010 | 0.010 | | 44 | 0.010 | 0.010 | | 45 | 0.010 | 0.010 | | 46 | 0.010 | 0.010 | | 47 | 0.010 | 0.010 | | 48 | 0.010 | 0.010 | | 49 | 0.010 | 0.010 | | 50 | 0.010 | 0.010 | | 51 | 0.011 | 0.010 | | 52 | 0.011 | 0.011 | | 53 | 0.012 | 0.011 | | 54 | 0.012 | 0.011 | | 55 | 0.013 | 0.012 | | 56 | 0.013 | 0.012 | | 57 | 0.014 | 0.012 | | 58 | 0.014 | 0.012 | | 59 | 0.015 | 0.013 | | 60 | 0.015 | 0.013 | | 61 | 0.015 | 0.013 | | 62 | 0.015 | 0.013 | | 63 | 0.015 | 0.013 | | 64 | 0.015 | 0.013 | | 65 | 0.015 | 0.013 | | 66 | 0.015 | 0.013 | | 67 | 0.015 | 0.013 | | 68 | 0.015 | 0.013 | | 69 | 0.015 | 0.013 | | 70 | 0.015 | 0.013 | | 71 | 0.015 | 0.013 | | 72 | 0.015 | 0.013 | | 73 | 0.015 | 0.013 | | 74 | 0.015 | 0.013 | | 75 | 0.015 | 0.013 | | 76 | 0.015 | 0.013 | | 77 | 0.015 | 0.013 | | 78 | 0.015 | 0.013 | | 79 | 0.015 | 0.013 | | 80 | 0.015 | 0.013 | | 81 | 0.014 | 0.012 | | 82 | 0.013 | 0.012 | | 83 | 0.013 | 0.011 | | 84 | 0.012 | 0.010 | | 85 | 0.011 | 0.010 | | 86 | 0.010 | 0.009 | | 87 | 0.009 | 0.008 | | 88 | 0.009 | 0.007 | | 89 | 0.008 | 0.007 | | 90 | 0.007 | 0.006 | | 91 | 0.007 | 0.006 | | 92 | 0.006 | 0.005 | | 93 | 0.005 | 0.005 | | 94 | 0.005 | 0.004 | | 95 | 0.004 | 0.004 | | 96 | 0.004 | 0.004 | | 97 | 0.003 | 0.003 | | 98 | 0.003 | 0.003 | | 99 | 0.002 | 0.002 | | 100 | 0.002 | 0.002 | | 101 | 0.002 | 0.002 | | 102 | 0.001 | 0.001 | | 103 | 0.001 | 0.001 | | 104 | 0.000 | 0.000 | | 105 | 0.000 | 0.000 | | 106 | 0.000 | 0.000 | | 107 | 0.000 | 0.000 | | 108 | 0.000 | 0.000 | | 109 | 0.000 | 0.000 | | 110 | 0.000 | 0.000 | | 111 | 0.000 | 0.000 | | 112 | 0.000 | 0.000 | | 113 | 0.000 | 0.000 | | 114 | 0.000 | 0.000 | | 115 | 0.000 | 0.000 | | 116 | 0.000 | 0.000 | | 117 | 0.000 | 0.000 | | 118 | 0.000 | 0.000 | | 119 | 0.000 | 0.000 | | 120 | 0.000 | 0.000 |

Cross References

31.05.04.02B(4)(c)

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.04.08 Application of the 2012 IAR Table.

A. In using the 2012 IAR Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:

q_x²⁰¹²⁺ⁿ = q_x²⁰¹² (1 - G2_x) ⁿ.

B. The resulting q_x²⁰¹²⁺ⁿ, as calculated in §A of this regulation, shall be rounded to three decimal places per 1,000.

C. The rounding described in §B of this regulation shall occur according to the formula in §A of this regulation, starting at the 2012 period table rate.

Cross References

31.05.04.02B(7)(b)

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.68 to COMAR 31.05.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Administrative History: Regulation .01 amended effective November 10, 2014 (41:22 Md. R. 1320)
Administrative History: Regulation .02B amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .05 amended effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .06 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .07 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Administrative History: Regulation .08 adopted effective January 1, 2015 (41:22 Md. R. 1320)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.01 Purpose.

The purpose of this chapter is to approve the use of new mortality tables adopted by the National Association of Insurance Commissioners after 1980 as a basis for determining the minimum standards of valuation of annuities and pure endowments purchased under group annuity and pure endowment contracts.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) "1983 GAM Tables" means the mortality tables:

(a) Developed by the Society of Actuaries Committee on Annuities;

(b) Adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners; and

(2) "1983 Table “a” means the mortality table:

(a) Developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation;

(b) Adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners; and

(3) "1994 GAR Table" means the mortality table:

(a) Developed by the Society of Actuaries Group Annuity Valuation Table Task Force; and

(b) Set out in Regulation .04 of this chapter.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.03 1983 GAM Tables.

A. 1983 GAM TABLE—MALES.

1983 GAM TABLE—MALES

| Age | q | | --- | --- | | 5 | .000342 | | 6 | .000318 | | 7 | .000302 | | 8 | .000294 | | 9 | .000292 | | 10 | .000293 | | 11 | .000298 | | 12 | .000304 | | 13 | .000310 | | 14 | .000317 | | 15 | .000325 | | 16 | .000333 | | 17 | .000343 | | 18 | .000353 | | 19 | .000365 | | 20 | .000377 | | 21 | .000392 | | 22 | .000408 | | 23 | .000424 | | 24 | .000444 | | 25 | .000464 | | 26 | .000488 | | 27 | .000513 | | 28 | .000542 | | 29 | .000572 | | 30 | .000607 | | 31 | .000645 | | 32 | .000687 | | 33 | .000734 | | 34 | .000785 | | 35 | .000860 | | 36 | .000907 | | 37 | .000966 | | 38 | .001039 | | 39 | .001128 | | 40 | .001238 | | 41 | .001370 | | 42 | .001527 | | 43 | .001715 | | 44 | .001932 | | 45 | .002183 | | 46 | .002471 | | 47 | .002790 | | 48 | .003138 | | 49 | .003513 | | 50 | .003909 | | 51 | .004324 | | 52 | .004755 | | 53 | .005200 | | 54 | .005660 | | 55 | .006131 | | 56 | .006618 | | 57 | .007139 | | 58 | .007719 | | 59 | .008384 | | 60 | .009158 | | 61 | .010064 | | 62 | .011133 | | 63 | .012391 | | 64 | .013868 | | 65 | .015592 | | 66 | .017579 | | 67 | .019804 | | 68 | .022229 | | 69 | .024817 | | 70 | .027530 | | 71 | .030354 | | 72 | .033370 | | 73 | .036680 | | 74 | .040388 | | 75 | .044597 | | 76 | .049388 | | 77 | .054758 | | 78 | .060678 | | 79 | .067125 | | 80 | .074070 | | 81 | .081484 | | 82 | .089320 | | 83 | .097525 | | 84 | .106047 | | 85 | .114836 | | 86 | .124170 | | 87 | .133870 | | 88 | .144073 | | 89 | .154859 | | 90 | .166307 | | 91 | .178214 | | 92 | .190460 | | 93 | .203007 | | 94 | .217904 | | 95 | .234086 | | 96 | .248436 | | 97 | .263954 | | 98 | .280803 | | 99 | .299154 | | 100 | .319185 | | 101 | .341086 | | 102 | .365052 | | 103 | .393102 | | 104 | .427255 | | 105 | .469531 | | 106 | .521945 | | 107 | .586518 | | 108 | .665268 | | 109 | .760215 | | 110 | 1.000000 |

B. 1983 GAM TABLE—FEMALES.

1983 GAM TABLE—FEMALES

| Age | q | | --- | --- | | 5 | .000171 | | 6 | .000140 | | 7 | .000118 | | 8 | .000104 | | 9 | .000097 | | 10 | .000096 | | 11 | .000104 | | 12 | .000113 | | 13 | .000121 | | 14 | .000131 | | 15 | .000140 | | 16 | .000149 | | 17 | .000159 | | 18 | .000169 | | 19 | .000179 | | 20 | .000189 | | 21 | .000201 | | 22 | .000212 | | 23 | .000225 | | 24 | .000238 | | 25 | .000253 | | 26 | .000268 | | 27 | .000283 | | 28 | .000301 | | 29 | .000320 | | 30 | .000342 | | 31 | .000364 | | 32 | .000388 | | 33 | .000414 | | 34 | .000443 | | 35 | .000476 | | 36 | .000502 | | 37 | .000535 | | 38 | .000573 | | 39 | .000617 | | 40 | .000665 | | 41 | .000716 | | 42 | .000775 | | 43 | .000841 | | 44 | .000919 | | 45 | .001010 | | 46 | .001117 | | 47 | .001237 | | 48 | .001366 | | 49 | .001505 | | 50 | .001647 | | 51 | .001793 | | 52 | .001948 | | 53 | .002119 | | 54 | .002315 | | 55 | .002541 | | 56 | .002803 | | 57 | .003103 | | 58 | .003442 | | 59 | .003821 | | 60 | .004241 | | 61 | .004702 | | 62 | .005210 | | 63 | .005769 | | 64 | .006385 | | 65 | .007064 | | 66 | .007817 | | 67 | .008681 | | 68 | .009702 | | 69 | .010921 | | 70 | .012385 | | 71 | .014128 | | 72 | .016159 | | 73 | .018481 | | 74 | .021091 | | 75 | .023992 | | 76 | .027184 | | 77 | .030672 | | 78 | .034459 | | 79 | .038549 | | 80 | .042945 | | 81 | .047655 | | 82 | .052691 | | 83 | .058071 | | 84 | .063807 | | 85 | .069918 | | 86 | .076570 | | 87 | .084459 | | 88 | .091935 | | 89 | .101354 | | 90 | .111750 | | 91 | .123076 | | 92 | .135630 | | 93 | .149577 | | 94 | .165103 | | 95 | .182419 | | 96 | .201757 | | 97 | .222043 | | 98 | .243899 | | 99 | .268185 | | 100 | .295187 | | 101 | .325225 | | 102 | .358897 | | 103 | .395842 | | 104 | .438360 | | 105 | .487816 | | 106 | .545886 | | 107 | .614309 | | 108 | .694884 | | 109 | .789474 | | 110 | 1.000000 |

Cross References

31.05.05.02B(1)(c)

31.05.05.05A

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.04 1994 GAR Table.

| | Male | Female | | | | --- | --- | --- | --- | --- | | Age (x) | qx1994 | AAx | qx1994 | AAx | | 1 | 0.000592 | 0.020 | 0.000531 | 0.020 | | 2 | 0.000400 | 0.020 | 0.000346 | 0.020 | | 3 | 0.000332 | 0.020 | 0.000258 | 0.020 | | 4 | 0.000259 | 0.020 | 0.000194 | 0.020 | | 5 | 0.000237 | 0.020 | 0.000175 | 0.020 | | 6 | 0.000227 | 0.020 | 0.000163 | 0.020 | | 7 | 0.000217 | 0.020 | 0.000153 | 0.020 | | 8 | 0.000201 | 0.020 | 0.000137 | 0.020 | | 9 | 0.000194 | 0.020 | 0.000130 | 0.020 | | 10 | 0.000197 | 0.020 | 0.000131 | 0.020 | | 11 | 0.000208 | 0.020 | 0.000138 | 0.020 | | 12 | 0.000226 | 0.020 | 0.000148 | 0.020 | | 13 | 0.000255 | 0.020 | 0.000164 | 0.020 | | 14 | 0.000297 | 0.019 | 0.000189 | 0.018 | | 15 | 0.000345 | 0.019 | 0.000216 | 0.016 | | 16 | 0.000391 | 0.019 | 0.000242 | 0.015 | | 17 | 0.000430 | 0.019 | 0.000262 | 0.014 | | 18 | 0.000460 | 0.019 | 0.000273 | 0.014 | | 19 | 0.000484 | 0.019 | 0.000280 | 0.015 | | 20 | 0.000507 | 0.019 | 0.000284 | 0.016 | | 21 | 0.000530 | 0.018 | 0.000286 | 0.017 | | 22 | 0.000556 | 0.017 | 0.000289 | 0.017 | | 23 | 0.000589 | 0.015 | 0.000292 | 0.016 | | 24 | 0.000624 | 0.013 | 0.000291 | 0.015 | | 25 | 0.000661 | 0.010 | 0.000291 | 0.014 | | 26 | 0.000696 | 0.006 | 0.000294 | 0.012 | | 27 | 0.000727 | 0.005 | 0.000302 | 0.012 | | 28 | 0.000754 | 0.005 | 0.000314 | 0.012 | | 29 | 0.000779 | 0.005 | 0.000331 | 0.012 | | 30 | 0.000801 | 0.005 | 0.000351 | 0.010 | | 31 | 0.000821 | 0.005 | 0.000373 | 0.008 | | 32 | 0.000839 | 0.005 | 0.000397 | 0.008 | | 33 | 0.000848 | 0.005 | 0.000422 | 0.009 | | 34 | 0.000849 | 0.005 | 0.000449 | 0.010 | | 35 | 0.000851 | 0.005 | 0.000478 | 0.011 | | 36 | 0.000862 | 0.005 | 0.000512 | 0.012 | | 37 | 0.000891 | 0.005 | 0.000551 | 0.013 | | 38 | 0.000939 | 0.006 | 0.000598 | 0.014 | | 39 | 0.000999 | 0.007 | 0.000652 | 0.015 | | 40 | 0.001072 | 0.008 | 0.000709 | 0.015 | | 41 | 0.001156 | 0.009 | 0.000768 | 0.015 | | 42 | 0.001252 | 0.010 | 0.000825 | 0.015 | | 43 | 0.001352 | 0.011 | 0.000877 | 0.015 | | 44 | 0.001458 | 0.012 | 0.000923 | 0.015 | | 45 | 0.001578 | 0.013 | 0.000973 | 0.016 | | 46 | 0.001722 | 0.014 | 0.001033 | 0.017 | | 47 | 0.001899 | 0.015 | 0.001112 | 0.018 | | 48 | 0.002102 | 0.016 | 0.001206 | 0.018 | | 49 | 0.002326 | 0.017 | 0.001310 | 0.018 | | 50 | 0.002579 | 0.018 | 0.001428 | 0.017 | | 51 | 0.002872 | 0.019 | 0.001568 | 0.016 | | 52 | 0.003213 | 0.020 | 0.001734 | 0.014 | | 53 | 0.003584 | 0.020 | 0.001907 | 0.012 | | 54 | 0.003979 | 0.020 | 0.002084 | 0.010 | | 55 | 0.004425 | 0.019 | 0.002294 | 0.008 | | 56 | 0.004949 | 0.018 | 0.002563 | 0.006 | | 57 | 0.005581 | 0.017 | 0.002919 | 0.005 | | 58 | 0.006300 | 0.016 | 0.003359 | 0.005 | | 59 | 0.007090 | 0.016 | 0.003863 | 0.005 | | 60 | 0.007976 | 0.016 | 0.004439 | 0.005 | | 61 | 0.008986 | 0.015 | 0.005093 | 0.005 | | 62 | 0.010147 | 0.015 | 0.005832 | 0.005 | | 63 | 0.011471 | 0.014 | 0.006677 | 0.005 | | 64 | 0.012940 | 0.014 | 0.007621 | 0.005 | | 65 | 0.014535 | 0.014 | 0.008636 | 0.005 | | 66 | 0.016239 | 0.013 | 0.009694 | 0.005 | | 67 | 0.018034 | 0.013 | 0.010764 | 0.005 | | 68 | 0.019859 | 0.014 | 0.011763 | 0.005 | | 69 | 0.021729 | 0.014 | 0.012709 | 0.005 | | 70 | 0.023730 | 0.015 | 0.013730 | 0.005 | | 71 | 0.025951 | 0.015 | 0.014953 | 0.006 | | 72 | 0.028481 | 0.015 | 0.016506 | 0.006 | | 73 | 0.031201 | 0.015 | 0.018344 | 0.007 | | 74 | 0.034051 | 0.015 | 0.020381 | 0.007 | | 75 | 0.037211 | 0.014 | 0.022686 | 0.008 | | 76 | 0.040858 | 0.014 | 0.025325 | 0.008 | | 77 | 0.045171 | 0.013 | 0.028366 | 0.007 | | 78 | 0.050211 | 0.012 | 0.031727 | 0.007 | | 79 | 0.055861 | 0.011 | 0.035362 | 0.007 | | 80 | 0.062027 | 0.010 | 0.039396 | 0.007 | | 81 | 0.068615 | 0.009 | 0.043952 | 0.007 | | 82 | 0.075532 | 0.008 | 0.049153 | 0.007 | | 83 | 0.082510 | 0.008 | 0.054857 | 0.007 | | 84 | 0.089613 | 0.007 | 0.060979 | 0.007 | | 85 | 0.097240 | 0.007 | 0.067738 | 0.006 | | 86 | 0.105792 | 0.007 | 0.075347 | 0.005 | | 87 | 0.115671 | 0.006 | 0.084023 | 0.004 | | 88 | 0.126980 | 0.005 | 0.093820 | 0.004 | | 89 | 0.139452 | 0.005 | 0.104594 | 0.003 | | 90 | 0.152931 | 0.004 | 0.116265 | 0.003 | | 91 | 0.167260 | 0.004 | 0.128751 | 0.003 | | 92 | 0.182281 | 0.003 | 0.141973 | 0.003 | | 93 | 0.198392 | 0.003 | 0.155931 | 0.002 | | 94 | 0.215700 | 0.003 | 0.170677 | 0.002 | | 95 | 0.233606 | 0.002 | 0.186213 | 0.002 | | 96 | 0.251510 | 0.002 | 0.202538 | 0.002 | | 97 | 0.268815 | 0.002 | 0.219655 | 0.001 | | 98 | 0.285277 | 0.001 | 0.237713 | 0.001 | | 99 | 0.301298 | 0.001 | 0.256712 | 0.001 | | 100 | 0.317238 | 0.001 | 0.276427 | 0.001 | | 101 | 0.333461 | 0.000 | 0.296629 | 0.000 | | 102 | 0.350330 | 0.000 | 0.317093 | 0.000 | | 103 | 0.368542 | 0.000 | 0.338505 | 0.000 | | 104 | 0.387855 | 0.000 | 0.361016 | 0.000 | | 105 | 0.407224 | 0.000 | 0.383597 | 0.000 | | 106 | 0.425599 | 0.000 | 0.405217 | 0.000 | | 107 | 0.441935 | 0.000 | 0.424846 | 0.000 | | 108 | 0.457553 | 0.000 | 0.444358 | 0.000 | | 109 | 0.473150 | 0.000 | 0.464469 | 0.000 | | 110 | 0.486745 | 0.000 | 0.482325 | 0.000 | | 111 | 0.496356 | 0.000 | 0.495110 | 0.000 | | 112 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 113 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 114 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 115 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 116 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 117 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 118 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 119 | 0.500000 | 0.000 | 0.500000 | 0.000 | | 120 | 1.000000 | 0.000 | 1.000000 | 0.000 |

Cross References

31.05.05.02B(3)(b)

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.05 Valuation Standards.

A. In valuing the reserve liabilities for annuities and pure endowments purchased under group annuity and pure endowment contracts in accordance with the provisions of Insurance Article, §5-305(f), Annotated Code of Maryland, insurers may use either the 1971 Group Annuity Mortality Table, the 1983 GAM Tables shown in Regulation .03 of this chapter, or the 1983 Table “a” shown in COMAR 31.05.04.03 for annuities and pure endowments purchased on or after July 1, 1980, and before January 1, 1987.

B. Except as provided in §§C and D of this regulation, the 1983 GAM Tables are to be used by insurers in valuing reserve liabilities in accordance with the provisions of Insurance Article, §5-305(f), Annotated Code of Maryland, for annuities and pure endowments purchased on and after January 1, 1987, under group annuity and pure endowment contracts.

C. Except as provided in §D of this regulation, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after July 1, 2004 under a group annuity or pure endowment contract.

D. The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after July 1, 2005 under a group annuity or pure endowment contract.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.05.06 Application of the 1994 GAR Table.

In using the 1994 GAR Table, the mortality rate for a person age X in year (1994 + n) is calculated as follows:

q_x¹⁹⁹⁴⁺ⁿ = q_x¹⁹⁹⁴ (1-AA_x) ⁿ

where the q_x¹⁹⁹⁴ and AA_xs are as specified in the 1994 GAR Table.

History

Administrative History: Effective date: December 31, 1985 (12:26 Md. R. 2545)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.69 to COMAR 31.05.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective May 24, 2004 (31:10 Md. R. 796)
Authority: Insurance Article, §2-109 and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.06.01 Purpose.

The purpose of this chapter is to protect the interests of policyholders of life insurers and property and casualty insurers admitted to do business in Maryland by limiting the amount of high yield/high risk obligations in which an insurer may invest, so that the assets of the insurer will be reasonable in relation to the insurer's liabilities and adequate to its financial needs, permitting policyholders to rely with confidence on the insurer's ability to fulfill its contractual obligations.

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Admitted assets” means those assets of the insurer which comply with the definition of the term contained in Insurance Article, §5-101, Annotated Code of Maryland, and which are listed on the last annual statement of the insurer filed with the Commissioner and valued in accordance with the then current instructions, rules, and regulations of the National Association of Insurance Commissioners and of the Commissioner.

(2) “High yield/high risk obligation” means an interest-bearing obligation which is not an investment grade obligation.

(3) “Interest-bearing obligation” means:

(a) An obligation of the type specified in Insurance Article, §§5-511(d)(ii), (iii), (iv) and 5-608(d) and (e), Annotated Code of Maryland, for a reserve investment; or

(b) A collateral loan which meets the requirements of Insurance Article, §5-511(i), Annotated Code of Maryland, and is secured by an obligation described in §B(3)(a) of this regulation.

(4) “Investment grade obligation” means an interest-bearing obligation which qualifies under any of the following:

(a) The obligation is currently rated by Moody's Investors Service or by Standard and Poor's Corporation in one of the top four generic lettered rating classifications of either of those organizations;

(b) The obligation has been designated as “Yes X” or “Yes” or classified in designation(1) or (2) by the Securities Valuation Office of the National Association of Insurance Commissioners, or is determined by that office to qualify for a designation of “Yes X”, “Yes”,(1), or (2); or

(5) “Person” means a person as defined in Insurance Article, §1-101(dd), Annotated Code of Maryland.

(6) “Rating agency” means the Securities Valuation Office of the National Association of Insurance Commissioners, Moody's Investors Service, Standard and Poor's Corporation, or any similar organization approved by the Commissioner at the request of an insurer.

Cross References

31.05.06.06B

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.03 Applicability.

This chapter is applicable to the acquisition of any high yield/high risk obligation by any life insurer or property and casualty insurer admitted to do business in Maryland.

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.04 Acquisition of Certain Obligations.

A. A life insurer or property and casualty insurer admitted to do business in Maryland may not acquire directly or indirectly, except with the prior approval of the Commissioner, or except under a plan of replacement approved by the Commissioner in accordance with §C of this regulation, any high yield/high risk obligation of any person if, after giving effect to the acquisition, the aggregate cost of the acquisition plus the admitted value of all other high yield/high risk obligations then held by the insurer would exceed 20 percent of the insurer's admitted assets.

B. In considering approval of an acquisition in excess of the limit stated in §A of this regulation, the Commissioner shall consider the following factors:

(1) Requirements of law relating to the acquisition;

(2) The amount of capital and surplus of the life insurer or property and casualty insurer relative to its size and the activities in which it is currently engaged;

(3) The size of the life insurer or property and casualty insurer as measured by its assets, reserves, premium writings, and insurance in force;

(4) The quality, diversification, and liquidity of the life insurer's or property and casualty insurer's investment portfolio;

(5) The past and projected future trends in the amount of the life insurer's or property and casualty insurer's surplus as regards policyholders;

(6) The financial position of the life insurer or property and casualty insurer when investments in, and other transactions with, affiliated persons are excluded from assets.

C. Plan of Replacement.

(1) A life insurer or property and casualty insurer which, on the effective date of this regulation, holds high yield/high risk obligations in excess of 20 percent of its admitted assets may request approval from the Commissioner for a 12-month plan of replacement, and may request renewal of approval of the plan from year to year after that for the purpose of replacing high yield/high risk obligations owned by the insurer with other high yield/high risk obligations.

(2) In reviewing requests for approval, the Commissioner shall consider the factors enumerated in §B of this regulation and any other factors reasonably related to the plan of replacement and to the financial condition of the life insurer or property and casualty insurer.

(3) A plan of replacement is subject to the following conditions and any other conditions which the Commissioner determines to be necessary:

(a) High yield/high risk obligations that are acquired are to be limited to those issued by:

(i) Governmental units that are current in all their obligations, and

(ii) Corporations with not less than $100 million in assets which are current in all their obligations;

(b) A replacement or exchange of a high yield/high risk obligation is not to increase the:

(i) Amount invested by the life insurer or property and casualty insurer in high yield/high risk obligations, nor the weighted average maturity date of those obligations, or

(ii) Percentage of admitted assets of the life insurer or property and casualty insurer invested in high yield/high risk obligations;

(c) The plan is to provide that at the end of each 12-month period the high yield/high risk obligations held by the life insurer or property and casualty insurer when measured as a percentage of its admitted assets will be at least 5 percent less or, if required by the Commissioner, as much as 10 percent less than the percentage of its high yield/high risk obligations at the beginning of the 12-month period until the 20 percent limitation established by §A of this regulation is reached;

(d) The life insurer or property and casualty insurer is to maintain a separate file of all transactions involving high risk/high yield obligations with such information as the Commissioner may require.

Cross References

31.05.06.05

31.05.06.07D(2)

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.05 Collateral Loans.

If a collateral loan is secured by one or more high yield/high risk obligations as well as by other types of collateral, the amount of the collateral loan to be considered for purposes of Regulation .04A of this chapter shall be that fraction of the loan which the value of the high yield/high risk obligations bears to the total value of the collateral.

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.06 Private Placements.

A. This regulation applies to private placements which have not been rated by rating agencies.

B. If a private placement does not qualify as an investment grade obligation in accordance with Regulation .02B(4) of this chapter it shall be considered a high yield/high risk obligation unless:

(1) In the case of an interest-bearing obligation which does not involve an equity feature, the interest rate charged is comparable to rates generally prevailing at the time of the loan for securities of comparable terms and duration which are classified in an investment grade classification (for example, BBB or Baa or higher) by at least one of the accepted rating agencies;

(2) In the case of an interest-bearing obligation which also provides minor equity benefits to the lender, the interest rate charged is comparable to interest rates generally prevailing at the time of the loan for securities of comparable terms and duration which are classified in the third grade (for example, A) by at least one of the accepted rating agencies; or

(3) In the case of an interest-bearing obligation which also provides substantial equity benefits to the lender, the interest rate charged is comparable to interest rates generally prevailing at the time of the loan for securities of comparable terms and duration which are classified in the second grade (for example, AA) by at least one of the accepted rating agencies.

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

COMAR 31.05.06.07 Separate Accounts.

A. This regulation is applicable only to life insurers, and not to property and casualty insurers.

B. In this regulation, the term “separate account” means a segregated asset account which is used to determine the basis of values of variable life insurance policies and variable annuity contracts and which complies with the requirements of Insurance Article, Title 16, Subtitle 6, Annotated Code of Maryland.

C. A life insurer, at its option, may regard the entire assets of a fund in a separate account as being investment grade assets if not more than 20 percent of the assets of the fund are invested in high yield/high risk obligations.

D. If more than 20 percent of the assets of a fund in account are invested in high yield/high risk obligations, the life insurer, at its option, may either:

(1) Allocate the assets of the fund between investment grade obligations and high yield/high risk obligations as the case may be; or

(2) Omit the total value of the fund from the calculation to be made under Regulation .04A of this chapter of both the life insurer's aggregate amount of high yield/high risk obligations and of its total admitted assets, if policyholders and contract holders selecting the funds have been furnished with a prospectus which indicates that the fund may invest in speculative or in high yield/high risk obligations.

E. For purposes of this regulation, if a fund has several series, the term “fund” as used in this regulation is applicable to each series separately.

History

Administrative History: Effective date: December 10, 1990 (17:24 Md. R. 2837)
Administrative History: Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.85 to COMAR 31.05.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective June 20, 2016 (43:12 Md. R. 668)
Authority: Insurance Article, §§2-109, 4-103(c), 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland

31.05.07 Life and Health Reinsurance Agreements

COMAR 31.05.07.01 Regulatory Considerations.

A. The Insurance Commissioner recognizes that licensed insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to the ceding insurer's surplus.

B. It is improper, however, for a licensed insurer, in the capacity of ceding insurer, to enter into a reinsurance agreement for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business being reinsured.

C. Under this type of agreement, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged by the reinsurance transaction, notwithstanding certain risk elements in the reinsurance agreement, such as catastrophic mortality or extraordinary survival.

D. The terms of an agreement described in §§B and C of this regulation and Regulation .05 of this chapter violate:

(1) Insurance Article, §4-116, Annotated Code of Maryland, relating to financial statements, resulting in statements that do not properly reflect the financial condition of the ceding insurer;

(2) Insurance Article, §5-904(a), Annotated Code of Maryland, relating to reinsurance reserve credits, resulting in a ceding insurer improperly reducing liabilities or establishing assets for reinsurance ceded; and

(3) Insurance Article, §4-113(b)(3), Annotated Code of Maryland, relating to creating a situation that would be contrary to the interests of the policyholders or stockholders of the ceding insurer.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.02 Scope.

A. This chapter applies to:

(1) Each domestic life and accident and health insurer, including nonprofit health service plans;

(2) Any other licensed life and accident and health insurer, including a nonprofit health services plan, that is not subject to a substantially similar regulation in its domiciliary state; and

(3) Each licensed property and casualty insurer with respect to its accident and health business.

B. This chapter does not apply to:

(1) Assumption reinsurance;

(2) Yearly renewable term reinsurance; or

(3) Certain nonproportional reinsurance, such as stop loss or catastrophe reinsurance.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Credit Quality Risk.

(a) “Credit quality risk” means the risk that invested assets supporting the reinsured business will decrease in value creating the hazard that assets will default or that there will be a decrease in earning power.

(b) “Credit quality risk” does not include market value declines due to changes in interest rates.

(2) “Disintermediation risk” means the risk that interest rates will rise and policy loans and surrenders will increase or maturing contracts will not renew at anticipated rates of renewal, with the mismatch increasing if asset durations are greater than liability durations, resulting in the hazards that:

(a) Policyholders will move their funds into new products offering higher rates; and

(b) The company may have to sell assets at a loss to provide for these withdrawals.

(3) “Expenses” includes:

(a) Commissions;

(b) Premium taxes; and

(c) Direct expenses, including billing, valuation, claims, and maintenance expected by the company at the time the business is reinsured.

(4) “Lapse risk” means the risk that a policy will voluntarily terminate before the recoupment of a statutory surplus strain experienced at issue of the policy.

(5) “Negative experience” means that the evolving claims under an initial insurance policy or contract or a reinsurance contract exceed those anticipated at the time of entering into the policy or contract.

(6) “Reinsurer” means an insurer that, in consideration of the payment by a ceding insurer of a risk charge, enters into a reinsurance contract with the ceding insurer, under which the reinsurer bears all or a portion of the risk of the ceding insurer.

(7) “Reinvestment risk” means the risk that interest rates will fall and funds reinvested, such as coupon payments or money received on asset maturity or call, will earn less than expected, with the mismatch increasing if asset durations are less than liability durations.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.04 Taking Reserve Credit or Establishing Assets for Reinsurance Ceded.

A. Allowed. Notwithstanding the prohibitions contained in Regulation .05 of this chapter, an insurer may, with the prior approval of the Commissioner, take the reserve credit and establish the assets for reinsurance ceded as the Commissioner considers consistent with the Insurance Article of the Annotated Code of Maryland, the Code of Maryland Regulations, and any actuarial interpretations or standards adopted by the Commissioner.

B. Limitation on Amount of Credit or Assets. An insurer may not take reserve credit or establish assets for reinsurance ceded in an amount that is greater than the underlying reserve of the ceding insurer supporting the policy obligations transferred under the reinsurance agreement.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.05 Circumstances Under Which Reduction of Liability and Establishment of Asset Prohibited.

A. In general. An insurer may not, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Commissioner if, by the terms of the reinsurance agreement, in substance or effect:

(1) Renewal expense allowances provided or to be provided to the ceding insurer by the reinsurer in any accounting period are not sufficient to cover anticipated allocable renewal expenses of the ceding insurer on the portion of the business reinsured, unless a liability is established for the present value of the shortfall using assumptions equal to the applicable statutory reserve basis on the business reinsured;

(2) The ceding insurer can be deprived of surplus or assets:

(a) At the reinsurer's option, or

(b) Automatically on the occurrence of some event, such as the insolvency of the ceding insurer;

(3) The ceding insurer is required to reimburse the reinsurer for negative experience;

(4) The ceding insurer is required, at specific points in time scheduled in the agreement, to terminate or automatically recapture all or part of the reinsurance ceded;

(5) The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income realized from the reinsured policies, such as reinsurance premiums or other fees or charges to a reinsurer that are greater than the direct premiums collected by the ceding company;

(6) All of the significant risk inherent in the business being reinsured is not transferred;

(7) The credit quality risk, reinvestment risk, or disintermediation risk is significant for the business reinsured and except as provided in Regulation .06B of this chapter, the ceding company does not:

(a) Transfer the underlying assets to the reinsurer, or

(b) Legally segregate the underlying assets in a trust or escrow account or otherwise establish a mechanism satisfactory to the Commissioner that legally segregates, by contract, the underlying assets;

(8) Settlements are made less frequently than quarterly or payments due from the reinsurer are not made in cash within 90 days after the settlement date;

(9) The ceding insurer is required to make representations or warranties:

(a) Not reasonably related to the business being reinsured, or

(b) About future performance of the business being reinsured; or

(10) The reinsurance agreement is entered into for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business reinsured and, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged.

B. Acts Not Prohibited.

(1) Section A(2) of this regulation does not prohibit a reinsurer from terminating the reinsurance agreement for nonpayment of:

(a) Reinsurance premiums; or

(b) Other amounts due, such as modified coinsurance reserve adjustments, interest and adjustments on funds withheld, and tax reimbursements.

(2) Section A(3) of this regulation does not prohibit:

(a) Offsetting experience refunds against current and prior years' losses under the agreement; or

(b) Payment by the ceding insurer of an amount equal to the current and prior years' losses under the agreement on voluntary termination of in force reinsurance by the ceding insurer.

(3) Voluntary termination under §B(2)(b) of this regulation does not include termination because of unreasonable provisions that allow the reinsurer to reduce its risk under the agreement, such as a provision that gives the reinsurer the right to increase reinsurance premiums or risk and expense charges to excessive levels forcing the ceding company to prematurely terminate the reinsurance agreement.

Cross References

31.05.07.01D

31.05.07.04A

31.05.07.06B

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.06 Determining Whether Significant Risk Exists.

A. Risk Table.

(1) The table contained in this section identifies for a representative sampling of products or types of business the risks that are considered to be significant.

(2) For products that are not included in the table, the risks determined to be significant shall be consistent with the table.

(3) Table.

| Type of Policy | Morbidity Risk | Mortality Risk | Lapse Risk | Credit Quality Risk (C1) | Reinvestment Risk (C2) | Disinter- mediation Risk (C3) | | --- | --- | --- | --- | --- | --- | --- | | Health Insurance Other Than Long- Term Care or Disability | + | 0 | + | 0 | 0 | 0 | | Health Insurance—Long-Term Care or Disability | + | 0 | + | + | + | 0 | | Immediate Annuities | 0 | + | 0 | + | + | 0 | | Single Premium Deferred Annuities | 0 | 0 | + | + | + | + | | Flexible Premium Deferred Annuities | 0 | 0 | + | + | + | + | | Guaranteed Interest Contracts | 0 | 0 | 0 | + | + | + | | Other Annuity Deposit Business | 0 | 0 | + | + | + | + | | Single Premium Whole Life | 0 | + | + | + | + | + | | Traditional Non-Par Permanent | 0 | + | + | + | + | + | | Traditional Non-Par Term | 0 | + | + | 0 | 0 | 0 | | Traditional Par Permanent | 0 | + | + | + | + | + | | Traditional Par Term | 0 | + | + | 0 | 0 | 0 | | Adjustable Premium Permanent | 0 | + | + | + | + | + | | Indeterminate Premium Permanent | 0 | + | + | + | + | + | | Universal Life Flexible Premium | 0 | + | + | + | + | + | | Universal Life Fixed Premium | 0 | + | + | + | + | + | | Universal Life Fixed Premium (dump-in premiums allowed) | 0 | + | + | + | + | + |

KEY: + = Significant 0 = Insignificant

B. Classes of Business for Which Separation of Assets Not Required. Notwithstanding Regulation .05A(7) of this chapter, a ceding insurer may hold assets supporting reserves without segregating the assets for the following classes of business:

(1) Health insurance—long-term care or long-term disability;

(2) Traditional non-par permanent;

(3) Traditional par permanent;

(4) Adjustable premium permanent;

(5) Indeterminate premium permanent;

(6) Universal life fixed premium with no dump-in premiums allowed; and

(7) Any other class of business that does not have a significant credit quality risk, reinvestment risk, or disintermediation risk.

C. Formula for Determining Reserve Interest Rate Adjustment.

(1) The associated formula for determining the reserve interest rate adjustment shall be a formula that:

(a) Reflects the ceding insurer's investment earnings; and

(b) Incorporates all realized and unrealized gains and losses reflected in the statutory statement.

(2) The following is an acceptable formula:

Rate = [2(I+CG)] divided by [X + Y - I - CG]

(3) In the formula under §C(2) of this regulation:

(a) I is the net investment income;

(b) CG is capital gains less capital losses;

(d) Y is the same as X, but for the prior year.

Cross References

31.05.07.05A(7)

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.07 Filing Agreements with Commissioner.

A. Filing Required. A ceding insurer shall file with the Commissioner:

(1) Each agreement entered into after the effective date of this chapter that involves the reinsurance of business issued before the effective date of the agreement; and

(2) Any amendment to an agreement required to be filed under §A(1) of this regulation.

B. Time for Filing. A ceding insurer shall file an agreement or amendment within 30 days after the execution of the agreement or amendment.

C. Contents of Filing. Each filing shall include data detailing the financial impact of the transaction.

D. Duties of Actuary.

(1) The ceding insurer's actuary, who signs the financial statement actuarial opinion with respect to valuation of reserves, shall consider this chapter and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with the Commissioner.

(2) The actuary shall maintain adequate documentation and be prepared, on request, to:

(a) Describe the actuarial work performed for inclusion in the financial statements; and

(b) Demonstrate that the work conforms to this chapter.

E. Increase in Surplus Net of Federal Income Tax.

(1) If there is an increase in surplus net of federal income tax resulting from arrangements described in this regulation, the surplus increase shall be:

(a) Identified separately on the insurer's statutory financial statement as a surplus item on the “aggregate write-ins for gains and losses in surplus” line in the capital and surplus account in the annual statement; and

(b) Recognized as income by being reflected on a net of tax basis in the “reinsurance ceded” line of the annual statement as earnings emerge from the business reinsured.

(2) The following is an example of how an increase in surplus should be identified on the insurer's statutory financial statement:

(a) On the last day of calendar year N, company XYZ pays a $20 million initial commission and expense allowance to company ABC for reinsuring an existing block of business;

(b) Assuming a 34 percent tax rate, the net increase in surplus at inception is $13.2 million ($20 million - $6.8 million) which is reported on the “aggregate write-ins for gains and losses in surplus” line in the capital and surplus account;

(c) $6.8 million (34 percent of $20 million) is reported as income on the “commissions and expense allowances or reinsurance ceded” line of the summary of operations;

(d) At the end of N+1 the business has earned $4 million;

(e) Company ABC has paid $0.5 million in profit and risk charges in arrears for the year and has received a $1 million experience refund;

(f) Company ABC's annual statement would report $1.65 million (66 percent of ($4 million - $1 million - $0.5 million) up to a maximum of $13.2 million) on the “commissions and expense allowance on reinsurance ceded” line of the summary of operations, and -$1.65 million on the “aggregate write-ins for gains and losses in surplus” line of the capital and surplus account; and

(g) The experience refund would be reported separately as a miscellaneous income item in the summary of operations.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.08 Requirements of Written Agreements.

A. Execution by Both Parties. An insurer may not use a reinsurance agreement or an amendment to a reinsurance agreement to reduce any liability or to establish any asset in a financial statement filed with the Commissioner, unless the agreement, amendment, or a binding letter of intent has been duly executed by both parties not later than the “as of date” of the financial statement.

B. Letter of Intent—Time of Execution. In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement shall be executed within a reasonable period of time, not exceeding 90 days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded.

C. Contents of Reinsurance Agreement. A reinsurance agreement shall provide that:

(1) The agreement constitutes the entire agreement between the parties with respect to the business being reinsured under the agreement;

(2) There are no understandings between the parties other than as expressed in the agreement; and

(3) Any change to the agreement is void unless made by amendment to the agreement and signed by both parties.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

COMAR 31.05.07.09 Existing Agreements.

A. Subject to §B of this regulation, an insurer shall reduce to zero by December 31, 1998, any reserve credits or assets established with respect to reinsurance agreements entered into before the effective date of this chapter that, under this chapter, would not be entitled to recognition of the reserve credits or assets.

B. An insurer is entitled to the grace period for a reinsurance agreement under §A of this regulation only if the reinsurance agreement was in compliance with the law and regulations in existence immediately preceding the effective date of this chapter.

History

Administrative History: Effective date: January 2, 1993 (19:26 Md. R. 2287)
Administrative History: Regulations .01—.05 repealed and new Regulations .01—.09 adopted as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective May 4, 1998 (25:9 Md. R. 678)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.91 to COMAR 31.05.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01D amended effective December 17, 2007 (34:25 Md. R. 2216)
Authority: Insurance Article, §§1-101(jj), 2-109, 3-124, 3-125, 4-113, 4-114, 4-116, 5-103, 5-201(b)(2), 5-203, 5-901, 5-903—5-905, 14-102, 14-108—14-111, 14-124(b), and 14-126, and Title 5, Subtitle 3, Annotated Code of Maryland

31.05.08 Credit for Reinsurance

COMAR 31.05.08.01 Applicability.

This chapter is applicable to any domestic authorized insurer who obtains reinsurance for itself from another insurer for all or part of its insurance risk.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accredited reinsurer” means an unauthorized insurer who is accepted by the Commissioner to act as a reinsurer in the State under Insurance Article, §5-906, Annotated Code of Maryland.

(2) “Actuarial method”, as used in Regulation .29 of this chapter, means the methodology used to determine the required level of primary security as described in Regulation .29C of this chapter.

(3) “Beneficiary” means:

(a) The entity for whose sole benefit the trust has been established; or

(b) Any successor of the beneficiary by operation of law or, if a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary is the court appointed domiciliary receiver, including conservator, rehabilitator, or liquidator.

(4) “Covered policies”, subject to the exemptions in Regulation .29B of this chapter, means those policies, other than grandfathered policies, of the following policy types:

(a) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or

(b) Flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period.

(5) “Grandfathered policies” means policies of the types described in §B(4) of this regulation that were:

(a) Issued prior to January 1, 2015; and

(b) Ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in Regulation .29B of this chapter had that section been in effect.

(6) Grantor.

(a) “Grantor” means the entity that has established a trust for the sole benefit of the beneficiary.

(b) When established in conjunction with a reinsurance contract, the grantor is the unauthorized unaccredited assuming insurer.

(7) “Liabilities”, as used in Regulations .08—.11 of this chapter, means the assuming insurer's gross liabilities attributable to reinsurance ceded by U.S. domiciled insurers that are not otherwise secured by acceptable means, and shall include:

(a) For business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance:

(i) Losses and loss adjustment expenses paid by the ceding insurer, recoverable from the assuming insurer;

(ii) Reserves for losses reported and outstanding;

(iii) Reserves for losses incurred but not reported;

(iv) Reserves for loss adjustment expenses; and

(v) Unearned premiums; and

(b) For business ceded by domestic insurers authorized to write life, health, and annuity insurance:

(i) Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;

(ii) Aggregate reserves for accident and health policies;

(iii) Deposit funds and other liabilities without life or disability contingencies; and

(iv) Liabilities for policy and contract claims.

(8) “Mortgage-related security”, as used in Regulation .10 of this chapter, means an obligation that is rated AA or higher (or the equivalent) by a nationally recognized statistical rating organization approved by the Securities Valuation Office and that either:

(a) Represents ownership of one or more promissory notes or certificates of interest or participation in the notes (including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates or participation), that:

(i) Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C. §5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and

(ii) Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. §§1709 and 1715-b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. §1703; or

(b) Is secured by one or more promissory notes or certificates of deposit or participations in the notes (with or without recourse to the insurer of the notes) and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of §B(5)(a)(i) and (ii) of this regulation.

(9) “NAIC” means National Association of Insurance Commissioners.

(10) “Non-covered policies”, as used in Regulation .29 of this chapter, means any policy that does not meet the definition of covered policies, including grandfathered policies.

(11) “Obligations”, as used in Regulation .17 of this chapter, means:

(a) Reinsured losses and loss adjustment expenses paid by the ceding insurer, but not recovered from the assuming insurer;

(b) Reserves for reinsured losses reported and outstanding;

(d) Reserves for allocated reinsured loss expenses and unearned premiums.

(12) “Other security”, as used in Regulation .29 of this chapter, means any security acceptable to the Commissioner other than security meeting the definition of primary security.

(13) “Primary security”, as used in Regulation .29 of this chapter, means the following forms of security:

(a) Cash;

(b) Securities listed by the Securities Valuation Office meeting the requirements of Insurance Article, §5-914(c)(2), Annotated Code of Maryland, but excluding any synthetic letter of credit, contingent note, credit-linked note, or other similar security that operates in a manner similar to a letter of credit, and excluding any securities issued by the ceding insurer or any of its affiliates; and

(i) Commercial loans in good standing of CM3 quality and higher;

(ii) Policy loans; and

(iii) Derivatives acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty.

(14) “Promissory note”, as used in Regulation .10 of this chapter, when used in connection with a manufactured home, also includes a loan, advance, or credit sale as evidenced by a retail installment sales contract or other instrument.

(15) “Qualified jurisdiction” has the meaning set forth in Insurance Article, §5-901(d), Annotated Code of Maryland.

(16) “Qualified U.S. financial institution” means:

(a) For purposes of those provisions of Regulation .14 of this chapter specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that:

(i) Is organized, or in the case of a U.S. branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state and has been granted authority to operate with fiduciary powers; and

(ii) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; or

(b) For purposes of those provisions of Regulation .14 of this chapter specifying those institutions that are eligible to issue letters of credit, an institution that:

(i) Is organized or, in the case of a U.S. office of a foreign banking organization, licensed, under the laws of the United States or any state;

(ii) Is regulated, supervised, and examined by U.S. federal or state authorities having regulatory authority over banks and trust companies; and

(iii) Has been determined by either the Commissioner or the Securities Valuation Office of the NAIC to meet the standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner.

(17) “Reinsurance intermediary” has the meaning set forth in Insurance Article, §8-501(e), Annotated Code of Maryland.

(18) “Required level of primary security”, as used in Regulation .29 of this chapter, means the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded.

(19) “Securities Valuation Office” refers to the Securities Valuation Office of the NAIC.

(20) “Valuation manual”, as used in Regulation .29 of this chapter, means the valuation manual adopted by the NAIC as described in Insurance Article, §5-313(b), Annotated Code of Maryland, with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed.

(21) “VM-20” means “Requirements for Principle-Based Reserves for Life Products,” including all relevant definitions from the Valuation Manual.

Cross References

31.05.08.29A

31.05.08.29B(1)

31.05.08.29C(1)

31.05.08.29C(2)

31.05.08.29C(3)

31.05.08.29C(5)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.03 Credit for Reinsurance.

The Commissioner shall allow a domestic authorized insurer credit as an asset or deduction from liability for reinsurance that the insurer obtains, if the reinsurance is obtained:

A. From an insurer that was authorized in this State as of any date on which the statutory financial statement credit for reinsurance is claimed;

B. From an accredited reinsurer pursuant to Regulations .04—.07 of this chapter;

C. From a reinsurer maintaining trust funds for multiple cedents pursuant to Regulation .08—.11 of this chapter;

D. When required by law pursuant to Regulation .12 of this chapter;

E. From an unauthorized reinsurer pursuant to Regulations .14—.23 of this chapter; or

F. From a certified reinsurer pursuant to Regulations .24, .25, and .27 of this chapter.

Cross References

31.05.08.12B

31.05.08.14A

31.05.08.29B(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.04 Approval Required for Accreditation of Reinsurer.

An unauthorized insurer may not act as an accredited reinsurer in the State, unless the Commissioner accepts the insurer as a reinsurer under Insurance Article, §5-906, Annotated Code of Maryland.

Cross References

31.05.08.03B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.05 Requirements for Accredited Reinsurer.

A. The Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this State as of the date on which statutory financial statement credit for reinsurance is claimed.

B. For initial eligibility as an accredited reinsurer, an applicant shall file with the Commissioner:

(1) An appointment of the Commissioner as its attorney to receive legal process issued against the applicant in the State on a form approved by the Commissioner;

(2) A properly executed NAIC Form AR-1 Certificate of Assuming Insurer as evidence that the applicant agrees to submit to the jurisdiction of the State and to the Commissioner's authority to examine its books and records;

(3) If reinsuring a life insurer, a certificate of valuation issued by the insurance regulatory agency of the applicant's state of domicile if a foreign insurer, or state of entry if an alien insurer;

(4) An annual statement fee pursuant to Insurance Article, §2-112(a)(8), Annotated Code of Maryland, and an annual fraud prevention fee pursuant to Insurance Article, §6-203(a), Annotated Code of Maryland;

(5) A Maryland Insurance Administration Reinsurance Application; and

(6) Upon request of the Commissioner:

(a) A certified copy of its annual statement for the preceding calendar year;

(b) Evidence that the insurer is licensed to transact insurance or reinsurance in at least one state or, in the case of a U.S. branch of an alien insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;

(d) A certificate of deposit issued by the official custodian of deposits of the applicant's state of domicile if a foreign insurer, or state of entry if an alien insurer;

(e) A copy of the report of the last examination made of the applicant by the insurance regulatory agency of the applicant's state of domicile if a foreign insurer, or state of entry if an alien insurer; and

(f) Any other document or information that the Commissioner considers necessary to determine eligibility to act as an accredited reinsurer.

C. For continued eligibility as an accredited reinsurer, an applicant shall, by May 30 of each year, file with the Commissioner:

(1) A properly executed NAIC Form AR-1 Certificate of Assuming Insurer as evidence that the applicant agrees to submit to the jurisdiction of the State and to the Commissioner's authority to examine its books and records;

(2) If reinsuring a life insurer, a certificate of valuation issued by the insurance regulatory agency of the applicant's state of domicile if a foreign insurer, or state of entry if an alien insurer;

(3) An annual statement fee pursuant to Insurance Article, §2-112(a)(8), Annotated Code of Maryland, and an annual fraud prevention fee pursuant to Insurance Article, §6-203(a), Annotated Code of Maryland;

(4) A Maryland Insurance Administration Reinsurance Application; and

(5) Upon request of the Commissioner:

(a) A certified copy of its annual statement for the preceding calendar year;

(d) A certificate of deposit issued by the official custodian of deposits of the applicant's state of domicile if a foreign insurer, or state of entry if an alien insurer;

(f) Any other document or information that the Commissioner considers necessary to determine continued eligibility to act as an accredited reinsurer.

D. Surplus. An accredited reinsurer shall maintain a surplus as regards policyholders in an amount not less than $20,000,000.

Cross References

31.05.08.12B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.06 Examination of Accredited Reinsurer.

Whenever the Commissioner considers it advisable, the Commissioner shall examine the affairs, transactions, accounts, records, and assets of each accredited reinsurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.07 Suspension or Revocation of Accreditation.

Contracts not qualifying for credit after suspension or revocation beyond secured obligations:

A. While a reinsurer’s accreditation or certification is suspended, a reinsurance contract issued or renewed after the effective date of the suspension does not qualify for credit except to the extent the reinsurer’s obligations under the contract are secured in accordance with Insurance Article, §5-914, Annotated Code of Maryland.

B. If a reinsurer’s accreditation or certification is revoked, credit for reinsurance may not be granted after the effective date of the revocation except to the extent that the reinsurer’s obligations under the contract are secured in accordance with Insurance Article, §5-911 or 5-914, Annotated Code of Maryland.

Cross References

31.05.08.03B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.08 Credit for Reinsurance — Reinsurers Maintaining Trust Funds for Multiple Cedents — General Requirements.

A. The Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer which, as of any date on which statutory financial statement credit for reinsurance is claimed, and thereafter for so long as credit for reinsurance is claimed, maintains a trust fund in an amount prescribed below in a qualified U.S. financial institution, for the payment of the valid claims of its U.S. domiciled ceding insurers, their assigns, and successors in interest.

B. The assuming insurer shall report annually to the Commissioner substantially the same information as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by authorized insurers, to enable the Commissioner to determine the sufficiency of the trust fund.

C. Categories of Assuming Insurer.

(1) The requirements of this section apply to the categories of assuming insurer described in this section.

(2) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. domiciled insurers, and in addition, the assuming insurer shall maintain a trusteed surplus in excess of the assuming insurer's obligations of not less than $20,000,000 except as provided in §C(3) of this regulation.

(3) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least 3 full years, the insurance regulatory agency with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of U.S. ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers covered by the trust.

(4) Trust Funds for Groups — General Requirements.

(a) The trust fund for a group including incorporated and individual unincorporated underwriters shall consist of:

(i) For reinsurance ceded under reinsurance contracts with an inception, amendment, or renewal date on or after January 1, 1993, funds in trust in an amount not less than the respective underwriters’ several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any underwriter of the group;

(ii) For reinsurance ceded under reinsurance contracts with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this regulation, funds in trust in an amount not less than the respective underwriters’ several insurance and reinsurance liabilities attributable to business written in the United States; and

(iii) In addition to these trusts, a trusteed surplus of which $100,000,000 shall be held jointly for the benefit of the U.S. domiciled ceding insurers of any member of the group for all the years of account.

(b) The incorporated members of the group may not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members. The group shall, within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, provide to the Commissioner:

(i) An annual certification by the group's domiciliary regulator of the solvency of each underwriter member of the group; or

(ii) If a certification is unavailable, a financial statement, audited by independent public accountants, of each underwriter member of the group.

Cross References

31.05.08.02B(7)

31.05.08.09B(1)

31.05.08.10D

31.05.08.11

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.09 Credit for Reinsurance — Reinsurers Maintaining Trust Funds for Multiple Cedents — Trusts.

A. Credit for reinsurance may not be granted unless the form of the trust and any amendments to the trust have been approved by either the insurance regulatory agency of the state where the trust is domiciled or the insurance regulatory agency of another state who, pursuant to the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust. The form of the trust and any trust amendments also shall be filed with the insurance regulatory agency of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that:

(1) Contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order of any court of competent jurisdiction in the United States;

(2) Legal title to the assets of the trust shall be vested in the trustee for the benefit of the grantor's U.S. ceding insurers, their assigns, and successors in interest;

(3) The trust shall be subject to examination as determined by the Commissioner;

(4) The trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, shall have outstanding obligations under reinsurance contracts subject to the trust; and

(5) No later than February 28 of each year, the trustee of the trust shall report to the Commissioner in writing setting forth the balance in the trust and listing the trust's investments at the preceding year-end, and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.

B. Inadequate Trust Funds.

(1) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by Regulation .08C of this chapter or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the insurance regulatory agency with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance regulatory agency with regulatory oversight over the trust or other designated receiver all of the assets of the trust fund.

(2) The assets shall be distributed by and claims shall be filed with and valued by the insurance regulatory agency with regulatory oversight over the trust in accordance with the laws of the state in which the trust is domiciled applicable to the liquidation of domestic insurance companies.

(3) If the insurance regulatory agency with regulatory oversight over the trust determines that the assets of the trust fund or any part of the assets are not necessary to satisfy the claims of the U.S. beneficiaries of the trust, the insurance regulatory agency with regulatory oversight over the trust shall return the assets, or any part of the assets, to the trustee for distribution in accordance with the trust agreement.

(4) The grantor shall waive any right otherwise available to it under U.S. law that is inconsistent with this provision.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.10 Credit for Reinsurance — Reinsurers Maintaining Trust Funds for Multiple Cedents — Assets Deposited in the Trust.

A. Assets deposited in the trust shall be valued according to their current fair market value and shall consist only of cash in U.S. dollars, certificates of deposit issued by a qualified U.S. financial institution, clean, irrevocable, unconditional and “evergreen” letters of credit issued or confirmed by a qualified U.S. financial institution, and investments of the type specified in this regulation, but investments in or issued by an entity controlling, controlled by, or under common control with either the grantor or beneficiary of the trust may not exceed 5 percent of total investments.

B. No more than 20 percent of the total of the investments in the trust may be foreign investments authorized under §D(1)(d), D(3), E(2), or F of this regulation, and no more than 10 percent of the total of the investments in the trust may be securities denominated in foreign currencies.

C. For purposes of applying §B of this regulation, a depository receipt denominated in U.S. dollars and representing rights conferred by a foreign security shall be classified as a foreign investment denominated in a foreign currency.

D. The assets of a trust established to satisfy the requirements of Regulations .08—.11 of this chapter shall be invested only as follows:

(1) Government obligations that are not in default as to principal or interest, that are valid and legally authorized and that are issued, assumed, or guaranteed by:

(a) The United States or by any agency or instrumentality of the United States;

(b) A state of the United States;

(d) An agency or instrumentality of a governmental unit referred to in §D(1)(b) and (c) of this regulation if the obligations shall be by law (statutory or otherwise) payable, as to both principal and interest, from taxes levied, or by law required to be levied, or from adequate special revenues pledged or otherwise appropriated, or by law required to be provided for making these payments, but may not be obligations eligible for investment under this section if payable solely out of special assessments on properties benefited by local improvements; or

(e) The government of any other country that is a member of the Organization for Economic Cooperation and Development and whose government obligations are rated A or higher, or the equivalent, by a nationally recognized statistical rating organization approved by the Securities Valuation Office;

(2) Obligations that are issued in the United States, or that are dollar denominated and issued in a non-U.S. market, by a solvent U.S. institution (other than an insurance company), or that are assumed or guaranteed by a solvent U.S. institution (other than an insurance company) and that are not in default as to principal or interest if the obligations:

(a) Are rated A or higher (or the equivalent) by a nationally recognized statistical rating organization approved by the Securities Valuation Office, or, if not so rated, are similar in structure and other material respects to other obligations of the same institution that are so rated;

(b) Are insured by at least one authorized insurer (other than the investing insurer or a parent, subsidiary, or affiliate of the investing insurer) licensed to insure obligations in this State and, after considering the insurance, are rated AAA (or the equivalent) by a nationally recognized statistical rating organization approved by the Securities Valuation Office; or

(3) Obligations issued, assumed, or guaranteed by a solvent non-U.S. institution chartered in a country that is a member of the Organization for Economic Cooperation and Development, or obligations of U.S. corporations issued in a non-U.S. currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a nationally recognized statistical rating organization approved by the Securities Valuation Office;

(4) An investment made pursuant to the provisions of §D(1), (2), or (3) of this regulation shall be subject to the following additional limitations:

(a) An investment in or loan upon the obligations of an institution other than an institution that issues mortgage-related securities may not exceed 5 percent of the assets of the trust;

(b) An investment in any one mortgage-related security may not exceed 5 percent of the assets of the trust;

(c) The aggregate total investment in mortgage-related securities may not exceed 25 percent of the assets of the trust; and

(d) Preferred or guaranteed shares issued or guaranteed by a solvent U.S. institution are permissible investments if all of the institution's obligations are eligible as investments under §D(2)(a) and (c) of this regulation, but may not exceed 2 percent of the assets of the trust.

E. Equity Interests.

(1) Investments in common shares or partnership interests of a solvent U.S. institution are permissible if:

(a) Its obligations and preferred shares, if any, are eligible as investments under §D of this regulation;

(b) The equity interests of the institution (except an insurance company) are registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. §78a to 78kk or otherwise registered pursuant to that Act, and if otherwise registered, price quotations for them are furnished through a nationwide automated quotations system approved by the Financial Industry Regulatory Authority or successor organization; and

(c) The amount invested in equity interests under this subsection does not exceed 1 percent of the assets of the trust even though the equity interests are not so registered and are not issued by an insurance company.

(2) Investments in common shares of a solvent institution organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development are permissible if:

(a) All its obligations are rated A or higher, or the equivalent, by a nationally recognized statistical rating organization approved by the Securities Valuation Office; and

(b) The equity interests of the institution are registered on a securities exchange regulated by the government of a country that is a member of the Organization for Economic Cooperation and Development.

(3) An investment in or loan upon any one institution's outstanding equity interests may not exceed 1 percent of the assets of the trust. The cost of an investment in equity interests made pursuant to this section, when added to the aggregate cost of other investments in equity interests then held pursuant to this section, may not exceed 10 percent of the assets in the trust.

F. Obligations issued, assumed, or guaranteed by a multinational development bank are permissible investments, provided the obligations are rated A or higher, or the equivalent, by a nationally recognized statistical rating organization approved by the Securities Valuation Office.

G. Investment Companies.

(1) Securities of an investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. §80a, are permissible investments if the investment company:

(a) Invests at least 90 percent of its assets in the types of securities that qualify as an investment under §D(1), (2), or (3) of this regulation or invests in securities that are determined by the Commissioner to be substantively similar to the types of securities set forth in §D(1), (2), or (3) of this regulation; or

(b) Invests at least 90 percent of its assets in the types of equity interests that qualify as an investment under §E(1) of this regulation.

(2) Investments made by a trust in investment companies under this section may not exceed the following limitations:

(a) An investment in an investment company qualifying under §G(1)(a) of this regulation may not exceed 10 percent of the assets in the trust, and the aggregate amount of investment in qualifying investment companies may not exceed 25 percent of the assets in the trust; and

(b) Investments in an investment company qualifying under §G(1)(b) of this regulation may not exceed 5 percent of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall be included when calculating the permissible aggregate value of equity interests pursuant to §E(1) of this regulation.

H. Letters of Credit.

(1) In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, duly approved by the Commissioner, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

(2) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct, or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where the draw would be required shall be considered to be negligence, willful misconduct, or both.

Cross References

31.05.08.02B(8)

31.05.08.02B(14)

31.05.08.11

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.11 Credit for Reinsurance—Reinsurers Maintaining Trust Funds for Multiple Cedents—Additional Security.

A specific security provided to a ceding insurer by an assuming insurer pursuant to Regulation .14 of this chapter shall be applied, until exhausted, to the payment of liabilities of the assuming insurer to the ceding insurer holding the specific security prior to, and as a condition precedent for, presentation of a claim by the ceding insurer for payment by a trustee of a trust established by the assuming insurer pursuant to Regulations .08—.10 of this chapter.

Cross References

31.05.08.02B(7)

31.05.08.10D

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.12 Credit for Reinsurance Required by Law.

A. In this regulation, “jurisdiction” means a state, district, or territory of the United States and any lawful national government.

B. The Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Regulations .03—.05, .08—.11, .14, and .24—.27 of this chapter, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by the applicable law or regulation of that jurisdiction.

Cross References

31.05.08.03D

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.13 Credit Allowed a Foreign Ceding Insurer — Repealed.

Cross References

31.05.08.14A

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.14 Reduction from Liability for Reinsurance

A. Notwithstanding Regulations .03—.13 of this chapter and subject to the requirements of this regulation, the Commissioner shall allow a ceding insurer a reduction from liability for reinsurance obtained from an assuming insurer for the payment of the obligations under a reinsurance contract.

B. Requirements.

(1) The Commissioner shall allow a ceding insurer a reduction from liability for the reinsurance ceded in an amount equal to the funds held by it or on its behalf, including funds held in trust, as security for the payment of the obligations under a reinsurance contract.

(2) The reduction from liability that is allowed a ceding insurer may not exceed the liabilities carried by the ceding insurer for the business reinsured.

(3) Any funds held by the ceding insurer, or on its behalf, as security for the payment of its obligations under a reinsurance contract shall be held for the exclusive benefit of the ceding insurer.

C. Forms of Security Under Reinsurance Contract.

(1) The Commissioner shall accept the following as security under a reinsurance contract:

(a) Cash;

(b) A letter of credit issued or confirmed by a qualified U.S. financial institution;

(c) Any security that qualifies as an admitted asset and is listed by the Securities Valuation Office, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office; or

(d) Any other form of security acceptable to the Commissioner.

(2) The security shall be held in:

(a) The United States and subject to withdrawal solely by and under the exclusive control of the ceding insurer; or

(b) A qualified U.S. financial institution, if the security is held in trust.

D. Standards of Acceptability for Letters of Credit.

(1) For acceptance as security under a reinsurance contract, a letter of credit shall:

(a) Be clean, irrevocable, and unconditional;

(b) Be issued or confirmed by a qualified U.S. financial institution authorized to issue letters of credit, pursuant to Regulation .02B(9)(b) of this chapter, and effective on or before December 31 of the year for which the annual statement filing is made;

(d) Be issued for a term of at least 1 year, with an issue date and expiration date; and

(e) Contain an “evergreen clause” that:

(i) Prevents the expiration of the letter of credit without due notice from the issuer; and

(ii) Provides for the letter of credit to renew automatically unless the issuer notifies the Commissioner and beneficiary no less than 30 days prior to the expiration date or nonrenewal.

(2) On the date of issuance or confirmation of the letter of credit, the issuer of the letter of credit shall meet the applicable standards of acceptability for a letter of credit.

(3) Notwithstanding the failure of a previously accepted issuer of a letter of credit to continue to meet applicable standards of acceptability for a letter of credit, the letter of credit shall continue to be accepted until:

(a) 15 days from the date that its issuer fails to meet the standards of acceptability; or

(b) The date of its scheduled expiration, if earlier.

(4) A letter of credit shall provide that to obtain funds, the beneficiary need:

(a) Only draw a sight draft under the letter of credit and present it; and

(b) Not present any other document.

(5) A letter of credit shall provide that it is not subject to any condition outside of the letter of credit.

(6) A letter of credit may not contain references to any other agreements, documents, or entities.

(7) The heading of the letter of credit may include a boxed section containing the name of the applicant and other appropriate notations to provide a reference for the letter of credit. The boxed section shall be clearly marked to indicate that the information is for internal identification purposes only.

(8) The letter of credit shall contain a statement to the effect that the obligation of the qualified United States financial institution under the letter of credit is in no way contingent upon reimbursement with respect thereto.

(9) The letter of credit shall state whether it is subject to and governed by the laws of this State or the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce Publication 600 (UCP 600), International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, and all drafts drawn thereunder shall be presentable at an office in the U. S. of a qualified U. S. financial institution.

(10) If the letter of credit is made subject to the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce Publication 600 (UCP 600), International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, then the letter of credit shall specifically address and provide for an extension of time to draw against the letter of credit in the event that one or more of the occurrences specified in Article 17 of Publication 500, or any other successor publication, occur.

(11) If the letter of credit is issued by a financial institution authorized to issue letters of credit, other than a qualified U. S. financial institution as described in Regulation .02B(9)(b) of this chapter, then the following additional requirements shall be met:

(a) The issuing financial institution shall formally designate the confirming qualified U.S. financial institution as its agent for the receipt and payment of the drafts; and

(b) The “evergreen clause” shall provide for 30 days notice, to the Commissioner and beneficiary, prior to the expiry date for nonrenewal.

E. Standards of Acceptability for Letters of Credit—Reinsurance Contract Provisions.

(1) The reinsurance contract in conjunction with which the letter of credit is obtained may contain provisions that:

(a) Require the assuming insurer to provide letters of credit to the ceding insurer and specify what they are to cover;

(b) Stipulate that the assuming insurer and ceding insurer agree that the letter of credit provided by the assuming insurer pursuant to the provisions of the reinsurance contract may be drawn upon at any time, notwithstanding any other provisions in the contract and shall be utilized by the ceding insurer or its successors in interest only for one or more of the following reasons:

(i) To pay or reimburse the ceding insurer for the assuming insurer's share under the specific reinsurance contract of premiums returned, but not yet recovered from the assuming insurers, to the owners of policies reinsured under the reinsurance contract on account of cancellations of the policies;

(ii) To pay or reimburse the ceding insurer for the assuming insurer's share, under the specific reinsurance contract of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurers, under the terms and provisions of the policies reinsured under the reinsurance contract;

(iii) To pay or reimburse the ceding insurer for any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; and

(iv) When the letter of credit will expire without renewal or be reduced or replaced by a letter of credit for a reduced amount and when the assuming insurer's entire obligations under the specific reinsurance remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to the assuming insurer's share of the liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer and exceed the amount of any reduced or replacement letter of credit, and deposit those amounts in a separate account in the name of the ceding insurer in a qualified U.S. financial institution apart from its general assets, in trust for such uses and purposes specified in §E(1)(b)(i) of this regulation as may remain after withdrawal and for any period after the termination date.

(c) All of the provisions of §E of this regulation shall be applied without diminution because of insolvency on the part of the ceding insurer or assuming insurer.

(2) This section does not preclude the ceding insurer and assuming insurer from providing for:

(a) An interest payment, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to §E(1)(b) of this regulation; or

(b) The return of any amounts drawn down on the letters of credit in excess of the actual amounts required for the above or any amounts that are subsequently determined not to be due.

Cross References

31.05.08.02B(16)(a)

31.05.08.02B(16)(b)

31.05.08.03E

31.05.08.11

31.05.08.15A

31.05.08.16A

31.05.08.17A

31.05.08.18A

31.05.08.27

31.05.08.28C(4)(e)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.15 Required Standards for Trust Agreements Under Regulation .14.

A. In General. A trust agreement established to meet the requirements of Regulation .14 of this chapter shall comply with this regulation.

B. Parties to Trust Agreement.

(1) A trust agreement shall be entered into between a beneficiary, a grantor, and a trustee, which shall be a qualified U.S. financial institution.

(2) A trust agreement shall be established for the sole benefit of the beneficiary.

(3) The failure of a trust agreement to identify the beneficiary does not affect any actions or rights that the Commissioner may take or possess under the laws of this State.

C. Trust Account.

(1) A trust agreement shall create a trust account into which assets shall be deposited.

(2) The assets in the trust account shall be held by the trustee at the trustee's office in the United States.

D. Withdrawal of Assets. A trust agreement shall provide that the beneficiary:

(1) May withdraw assets from the trust account at any time, without notice to the grantor, if the beneficiary provides written notice to the trustee; and

(2) Is not required to present any other statement or document to withdraw assets, but may be required to acknowledge receipt of withdrawn assets.

E. Governing Law; Trust Agreement Not Subject to Other Conditions.

(1) A trust agreement shall:

(a) Be subject to and governed by the laws of the state in which the trust is domiciled; and

(b) Provide that it is not subject to any conditions outside of the trust agreement.

(2) Except as provided in Regulation .17 of this chapter, a trust agreement may not contain references to any other agreement or document.

F. Duties of Trustee.

(1) A trust agreement shall require the trustee to:

(a) Receive assets and hold the assets in a safe place;

(b) Determine that the assets are in a form that the beneficiary, or the trustee on direction of the beneficiary, may negotiate whenever necessary, without consent or signature from the grantor or any other person or entity;

(c) Provide to the grantor and the beneficiary a statement of all assets in the trust account on its inception and at least as often as the end of each calendar quarter;

(d) Notify the grantor and the beneficiary, within 10 days, of any deposits to or withdrawals from the trust account;

(e) On written demand of the beneficiary, immediately take the steps necessary to transfer absolutely all right, title, and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and

(f) Allow no substitutions or withdrawals of assets from the trust account, except on:

(i) Written instructions from the beneficiary; or

(ii) Call or maturity of any trust asset if the trustee provides written notice to the beneficiary and pays the proceeds from the asset into the trust account.

(2) A trust agreement shall prohibit invasion of the trust corpus to pay compensation to, or reimburse the expenses of, the trustee.

(3) In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the trust agreement or some other binding agreement, duly approved by the Commissioner, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.

(4) The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct, or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where the draw would be required shall be considered to be negligence, willful misconduct, or both.

G. When Grantor Is Declared Insolvent or Placed into Receivership, Rehabilitation, or Liquidation.

(1) Notwithstanding any other provision in a trust agreement, if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the insurance regulatory agency with regulatory oversight of the trust or court of competent jurisdiction directing the trustee to transfer to the insurance regulatory agency with regulatory oversight or other designated receiver all of the assets of the trust fund.

(2) The assets shall be applied in accordance with the priority statutes and laws of the state in which the trust is domiciled applicable to the assets of insurance companies in liquidation.

(3) If the insurance regulatory agency with regulatory oversight determines that the assets of the trust fund or any part of the assets are not necessary to satisfy claims of the U.S. beneficiaries of the trust, the assets or any part of the assets shall be returned to the trustee for distribution in accordance with the trust agreement.

H. Termination of Trust Account. A trust agreement shall provide that at least 30 days, but not more than 45 days, before termination of the trust account, the trustee shall deliver to the beneficiary and the Commissioner written notice of termination.

I. Valuation and Form of Assets.

(1) Either the reinsurance contract or the trust agreement shall stipulate that assets deposited in the trust account shall:

(a) Be valued according to their current fair market value; and

(b) Consist only of:

(i) Cash in U.S. dollars;

(ii) Certificates of deposit issued by a U.S. bank and payable in U.S. dollars;

(iii) Investments permitted by the Insurance Article, Annotated Code of Maryland; or

(iv) Any combination of §I(1)(b)(i)—(iii) of this regulation.

(2) Investments in or issued by an entity controlling, controlled by, or under common control with the grantor or the beneficiary of the trust may not exceed 5 percent of total investments.

(3) A trust agreement may specify the types of investments to be deposited in the trust account.

(4) If a trust agreement is entered into in conjunction with a reinsurance contract covering life, annuities, or accident and health, then the reinsurance contract shall contain the provisions required by this section.

Cross References

31.05.08.16D(2)(b)

31.05.08.17A

31.05.08.18A

31.05.08.29D(1)(e)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.16 Permitted Conditions for Trust Agreements.

A. In General. A trust agreement established to meet the requirements of Regulation .14 of this chapter may include the provisions allowed under this regulation.

B. Resignation and Removal of Trustee.

(1) Subject to §B(2) of this regulation, a trust agreement may provide that the:

(a) Trustee may resign by delivering to the beneficiary and grantor written notice of resignation, effective not less than 90 days after receipt by the beneficiary and grantor; and

(b) Grantor may remove the trustee by delivering to the trustee and beneficiary written notice of removal, effective not less than 90 days after receipt by the trustee and beneficiary.

(2) A resignation or removal under this section may not become effective until:

(a) A successor trustee has been appointed and approved by the beneficiary and the grantor; and

(b) All assets in the trust have been transferred to the new trustee.

C. Shares of Stock—Voting Rights and Dividends.

(1) A trust agreement may give the grantor the full and unqualified right to:

(a) Vote any shares of stock in the trust account; and

(b) Receive from time to time payments of any dividends or interest on any shares of stock or obligations included in the trust account.

(2) Any interest or dividends shall be:

(a) Forwarded promptly on receipt to the grantor; or

(b) Deposited in a separate account established in the grantor's name.

D. Investment and Substitution.

(1) Subject to §D(2) of this regulation, a trust agreement may authorize the trustee to invest, and accept substitutions of, any funds in the account.

(2) The trustee may not make an investment or substitution without prior approval of the beneficiary unless the trust agreement:

(a) Specifies categories of investments acceptable to the beneficiary; and

(b) Authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn, and that are consistent with the restrictions in Regulation .15 of this chapter.

E. Transfer of Assets.

(1) A trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets shall be transferred.

(2) Transfer may be conditioned on the trustee receiving other specified assets before or simultaneously with the transfer.

F. Delivery of Assets to Grantor on Termination of Account. A trust agreement may provide that, on termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval of the beneficiary, be delivered to the grantor.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.17 Trust Agreement Established in Conjunction with Reinsurance Contracts Covering Risks Other than Life, Annuities, and Accident and Health.

A. Use of Amounts Drawn on Trust Account. Notwithstanding any provision of Regulation .15 of this chapter, when a trust agreement is established to meet the requirements of Regulation .14 of this chapter in conjunction with a reinsurance contract covering risks other than life, annuities, or accident and health, where it is customary practice to provide a trust agreement for a specific purpose, the trust agreement may allow the ceding insurer to use amounts drawn on the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, for the purposes listed in this regulation.

B. To Pay or Reimburse Ceding Insurer. A trust agreement may allow the ceding insurer to use amounts drawn on the trust account to pay or reimburse the ceding insurer for:

(1) The assuming insurer's share under the specific reinsurance contract regarding any losses and loss adjustment expenses paid by the ceding insurer but not recovered from the assuming insurer; and

(2) Unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer.

C. Payment to Assuming Insurer. A trust agreement may allow the ceding insurer to use amounts drawn on the trust account to make payment to the assuming insurer of any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the assuming insurer's obligations under the specific reinsurance contract.

D. On Termination of Trust Account.

(1) A trust agreement may allow the ceding insurer to withdraw amounts equal to the assuming insurer's entire obligations under the reinsurance contract and deposit those amounts in a separate account in accordance with §D(2) of this regulation in trust for the uses specified in §§B and C of this regulation if the:

(a) Ceding insurer has received notification of termination of the trust account; and

(b) Assuming insurer's entire obligations under the reinsurance contract remain unliquidated and undischarged 10 days before the termination date.

(2) Amounts withdrawn from the trust account and deposited under §D(1) of this regulation shall be deposited:

(a) In a separate account, in the name of the ceding insurer, in a qualified U.S. financial institution, apart from the general assets of the ceding insurer; and

(b) In trust for the uses specified in §§B and C of this regulation as may remain executory after the withdrawal and for any period after the termination date.

Cross References

31.05.08.02B(11)

31.05.08.15E(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.18 Trust Agreement Established in Conjunction with Reinsurance Contracts Covering Life, Annuities, or Accident and Health Risks.

A. Use of Amounts Drawn on Trust Account. Notwithstanding any provision of Regulation .15 of this chapter, when a trust agreement is established to meet the requirements of Regulation .14 of this chapter in conjunction with a reinsurance contract covering life, annuities, or accident and health risks, where it is customary to provide a trust agreement for a specific purpose, the trust agreement may allow the ceding insurer to use amounts drawn on the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, for the purposes listed in this regulation.

B. To Pay or Reimburse Ceding Insurer. A trust agreement may allow the ceding insurer to use amounts drawn on the trust account to pay or reimburse the ceding insurer for the assuming insurer's share under the:

(1) Reinsurance contract of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the insurance contract on account of cancellations of the policies; and

(2) Specific reinsurance contract of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance contract.

C. Payment to Assuming Insurer. A trust agreement may allow the ceding insurer to use amounts drawn on the trust account to pay to the assuming insurer amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

D. On Termination of Trust Account.

(1) A trust agreement may allow the ceding insurer to withdraw amounts equal to the assuming insurer's share of liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer, and deposit those amounts in a separate account in accordance with §D(2) of this regulation in trust for the uses and purposes specified in §§B and C of this regulation if the:

(a) Ceding insurer has received notification of termination of the trust account; and

(b) Assuming insurer's entire obligations under the specific reinsurance contract remain unliquidated and undischarged 10 days before the termination date.

(2) Amounts withdrawn from the trust account and deposited under §D(1) of this regulation shall be deposited:

(a) In a separate account, in the name of the ceding insurer, in a qualified U.S. financial institution, apart from the general assets of the ceding insurer; and

(b) In trust for the uses specified in §§A and B of this regulation as may remain executory after the withdrawal and for any period after the termination date.

Cross References

31.05.08.27

31.05.08.28C(4)(e)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.19 Permitted Conditions Applicable to Reinsurance Contracts.

A. Trust Agreement. A reinsurance contract may:

(1) Require the assuming insurer to enter into a trust agreement;

(2) Establish a trust account for the benefit of the ceding insurer; and

(3) Specify what the agreement is to cover.

B. Execution of Assignments or Endorsements. To allow the ceding insurer, or the trustee on the direction of the ceding insurer, to negotiate assets whenever necessary without consent or signature from the assuming insurer or any other entity, a reinsurance agreement may require the assuming insurer, before depositing assets with the trustee, to:

(1) Execute assignments or endorsements in blank; or

(2) Transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments.

C. Settlements of Account in Cash or Equivalent. A reinsurance contract may require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent.

D. Withdrawal of Assets. A reinsurance contract may stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established under the provisions of the reinsurance contract, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the reinsurance contract, and may be used by the ceding insurer or its successors in interest by operation of law, including any liquidator, rehabilitator, receiver, or conservator of the company, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, for the following purposes:

(1) To pay or reimburse the ceding insurer for:

(a) The assuming insurer's share under the specific reinsurance contract of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance contract because of cancellations of the policies;

(b) The assuming insurer's share of surrenders and benefits or losses paid by the ceding insurer under the provisions of the policies reinsured under the reinsurance contract; or

(c) Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or

(2) To make payment to the assuming insurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.

E. Transfer of Assets to Assuming Insurer. A reinsurance contract may allow the assuming insurer to seek approval from the ceding insurer, which may not be unreasonably or arbitrarily withheld, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the assuming insurer, if:

(1) At the time of withdrawal, the assuming insurer replaces the withdrawn assets with other qualified assets that have a current fair market value equal to the market value of the withdrawn assets to maintain at all times the deposit in the required amount; or

(2) After withdrawal and transfer, the current fair market value of the trust account is not less than 102 percent of the required amount.

F. Return of Amount Withdrawn; Interest. A reinsurance contract may provide for:

(1) The return of any amount withdrawn in excess of the actual amounts required for §D of this regulation; and

(2) Interest payments at a rate not in excess of the prime rate of interest on such amounts held pursuant to §D of this regulation.

G. Arbitration Panel or Court-Award of Expenses. A reinsurance contract may allow the award by an arbitration panel or court of competent jurisdiction of:

(1) Interest at a rate different from that provided in §F of this regulation;

(2) Court or arbitration costs;

(3) Attorney's fees; and

(4) Any other reasonable expenses.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.20 Financial Reporting.

A. Reduction of Liability. A ceding insurer may use a trust agreement to reduce any liability for reinsurance ceded to an unauthorized assuming insurer in financial statements required to be filed with the Commissioner in compliance with this chapter when the trust agreement is established on or before the date of filing of the financial statement of the ceding insurer.

B. Amount of Reduction. A reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but the reduction may not exceed the specific obligations under the reinsurance contract that the trust account was established to secure.

Cross References

31.05.08.29D(1)(e)(iv)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.21 Existing Agreements — Repealed.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.22 Other Security.

A ceding insurer may take credit for unencumbered funds that are:

A. Withheld by the ceding insurer in the United States;

B. Subject to withdrawal solely by the ceding insurer; and

C. Under the exclusive control of the ceding insurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.23 Reinsurance Contract.

Credit for reinsurance may not be allowed by the Commissioner as an admitted asset or deduction from liability to any ceding insurer for a reinsurance contract entered into with a reinsurer under this chapter after the adoption of this regulation unless the reinsurance contract includes:

A. An insolvency clause, in accordance with Insurance Article, §5-905(a), Annotated Code of Maryland; and

B. A provision under which the reinsurer, if an unauthorized reinsurer, has:

(1) Submitted to the jurisdiction of an alternative dispute resolution panel or court of competent jurisdiction within the United States;

(2) Agreed to comply with all requirements necessary to give the court or panel jurisdiction;

(3) Designated an agent to receive service of process; and

(4) Agreed to abide by the final decision of the court or panel.

C. Includes a proper reinsurance intermediary clause, if applicable, which stipulates that the credit risk for the intermediary is carried by the assuming insurer.

Cross References

31.05.08.03E

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.24 Credit for Reinsurance — Certified Reinsurers.

A. The Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in this State at all times for which statutory financial statement credit for reinsurance is claimed under this regulation.

B. The credit allowed shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by the Commissioner.

C. The security shall be in a form consistent with Insurance Article, §§5-911 and 5-914, Annotated Code of Maryland, and this chapter.

D. The amount of security required in order for full credit to be allowed shall correspond with the following requirements:

(1) Certification Ratings.

| Certification Ratings | Security Required | | --- | --- | | Secure -1 | 0% | | Secure - 2 | 10% | | Secure - 3 | 20% | | Secure - 4 | 50% | | Secure - 5 | 75% | | Vulnerable - 6 | 100% |

(2) Affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions.

(3) The Commissioner shall require the certified reinsurer to post 100 percent security, for the benefit of the ceding insurer or its estate, upon the entry of an order of rehabilitation, liquidation, or conservation against the ceding insurer.

(4) Catastrophic Occurrence.

(a) A certified reinsurer may defer posting security for catastrophe recoverables for a period of up to 1 year from the date of the first instance of a liability reserve entry by the ceding company as a result of a catastrophic occurrence that is likely to result in significant insured losses as recognized by the Commissioner.

(b) The deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner as determined by the Commissioner.

(c) Reinsurance recoverables for only the following lines of business as reported on the NAIC annual financial statement related specifically to the catastrophic occurrence will be included in the deferral:

| Line 1 | Fire | | --- | --- | | Line 2 | Allied Lines | | Line 3 | Farmowners multiple peril | | Line 4 | Homeowners multiple peril | | Line 5 | Commercial multiple peril | | Line 9 | Inland Marine | | Line 12 | Earthquake | | Line 21 | Auto physical damage |

(5) Credit for reinsurance under this regulation shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer. Any reinsurance contract entered into prior to the effective date of the certification of the assuming insurer that is subsequently amended after the effective date of the certification of the assuming insurer or a new reinsurance contract, covering any risk for which collateral was provided previously, shall only be subject to this regulation with respect to losses incurred and reserves reported on or after the effective date of the amendment or new contract.

(6) Nothing in this section shall prohibit the parties to a reinsurance contract from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under this section.

E. Certification Procedure.

(1) The Commissioner shall post notice on the Administration’s website promptly upon receipt of any application for certification, including instructions on how members of the public may respond to the application. The Commissioner may not take final action on the application until at least 30 days after posting the notice required by this subsection.

(2) The Commissioner shall issue written notice to an assuming insurer that has been approved as a certified reinsurer. Including in such notice shall be the certification rating assigned to the certified reinsurer in accordance with §G(2) of this regulation.

(3) The Commissioner shall publish a list of all certified reinsurers and their ratings.

(4) The Commissioner shall comply with all reporting and notification requirements that may be established by the NAIC with respect to certified reinsurers and qualified jurisdictions.

F. Certification Eligibility Requirements. In order to be eligible for certification, the assuming insurer shall meet the following requirements:

(1) The assuming insurer shall be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to Regulation .26 of this chapter.

(2) The assuming insurer shall maintain capital and surplus, or its equivalent, of no less than $250,000,000, calculated in accordance with §G(2)(h) of this regulation. This requirement may also be satisfied by a group including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents (net of liabilities) of at least $250,000,000 and a central fund containing a balance of at least $250,000,000.

(3) The assuming insurer shall have financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner. These ratings shall be based on interactive communication between the rating agency and the assuming insurer and may not be based solely on publicly available information. These financial strength ratings shall be one factor used by the Commissioner in determining the rating that is assigned to the assuming insurer. Failure to obtain or maintain at least two financial strength ratings from acceptable rating agencies shall result in the loss of eligibility for certification. Acceptable rating agencies include the following:

(a) Standard & Poor’s;

(b) Moody’s Investors Service;

(d) A.M. Best Company; or

(e) A nationally recognized statistical rating organization deemed acceptable by the Commissioner.

(4) Any other requirements imposed by the Commissioner.

(5) If an applicant for certification has been certified as a reinsurer by the insurance regulatory agency of a state accredited by the NAIC, the Commissioner has the discretion to defer to that insurance regulatory agency to designate the assuming insurer as a certified reinsurer in this State.

G. Certification Rating.

(1) The Commissioner shall rate each certified reinsurer on a legal entity basis and with due consideration being given to a group rating where appropriate, except that a group including incorporated and individual unincorporated underwriters that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating.

(2) Factors that may be considered as part of the certification rating process include, but are not limited to:

(a) The certified reinsurer’s financial strength rating from an acceptable rating agency pursuant to §F(3) of this regulation, as follows:

(i) A certified reinsurer may not be eligible for a certification rating higher than the rating corresponding with the financial strength ratings set forth in §G(2)(a)(iii) of this regulation.

(ii) The Commissioner shall use the lowest financial strength rating received from an acceptable rating agency in establishing the maximum certification rating of a certified reinsurer.

(iii) Financial Strength Rating Chart.

| Ratings | Best | S&P | Moody’s | Fitch | | --- | --- | --- | --- | --- | | Secure - 1 | A++ | AAA | Aaa | AAA | | Secure - 2 | A+ | AA+, AA, AA- | Aa1, Aa2, Aa3 | AA+, AA, AA- | | Secure - 3 | A | A+, A | A1, A2 | A+, A | | Secure - 4 | A- | A- | A3 | A- | | Secure - 5 | B++, B+ | BBB+, BBB, BBB- | Baa1, Baa2, Baa3 | BBB+, BBB, BBB- | | Vulnerable - 6 | B, B-C++, C+, C, C-, D, E, F | BB+, BB, BB-, B+, B, B-, CCC, CC, C, D, R | Ba1, Ba2, Ba3, B1, B2, B3, Caa, Ca, C | BB+, BB, BB-, B+, B, B-, CCC+, CC, CCC-, DD |

(b) The business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations;

(c) For certified reinsurers domiciled in the U.S., a review of the most recent applicable NAIC Annual Statement Blank, either Schedule F (for property/casualty reinsurers) or Schedule S (for life and health reinsurers);

(d) For certified reinsurers not domiciled in the U.S., a review annually of the Maryland Insurance Administration Reinsurance Application and NAIC Form CR-F Assumed Reinsurance (for Property/Casualty Reinsurers) or NAIC Form CR-S Reinsurance Assumed (for Life and Health Reinsurers);

(e) The history of the certified reinsurer for prompt payment of claims under reinsurance contracts, based on an analysis of ceding insurers’ Schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than 90 days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership;

(f) Regulatory actions against the certified reinsurer;

(g) The report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in §G(2)(h) of this regulation;

(h) For certified reinsurers not domiciled in the U.S., audited financial statements, regulatory filings and actuarial opinions (as filed with the non-U.S. jurisdiction supervisor, with a translation into English). Upon the initial application for certification, the Commissioner shall consider audited financial statements for the last 2 years filed with its non-U.S. jurisdiction supervisor;

(i) The liquidation priority of obligations to a ceding insurer in the certified reinsurer’s domiciliary jurisdiction in the context of an insolvency proceeding;

(j) A certified reinsurer’s participation in any solvent scheme of arrangement, or similar procedure, which involves U.S. ceding insurers. The Commissioner shall receive prior notice from a certified reinsurer that proposes participation by the certified reinsurer in a solvent scheme of arrangement; and

(k) Any other information deemed relevant by the Commissioner.

H. Certification Rating and Security Adjustment. Based on the analysis conducted under §G(2) of this regulation of a certified reinsurer’s history of prompt payment of claims, the Commissioner may adjust the security the certified reinsurer is required to post to protect its liabilities to U.S. ceding insurers provided that the Commissioner shall, at a minimum, increase the security the certified reinsurer is required to post by one certification rating level pursuant to §G(2)(a)(iii) of this regulation if the Commissioner finds that:

(1) More than 15 percent of the certified reinsurer’s ceding insurers have overdue reinsurance recoverables on paid losses of 90 calendar days or more which are not in dispute and which exceed $100,000 for each cedent; or

(2) The aggregate amount of reinsurance recoverables on paid losses which are not in dispute that are overdue by 90 calendar days or more exceeds $50,000,000.

I. The Commissioner may not certify any assuming insurer that is domiciled in a jurisdiction that the Commissioner has determined does not adequately and promptly enforce final U.S. judgments or arbitration awards.

J. For initial eligibility as a certified reinsurer, an applicant shall agree to meet applicable information filing requirements as determined by the Commissioner. All information submitted by applicants, which is not otherwise public information subject to disclosure, shall be exempt from disclosure under General Provisions Article, Title 4, Annotated Code of Maryland, and shall be withheld from public disclosure. The applicant shall file with the Commissioner:

(1) A properly executed NAIC Form CR-F Assumed Reinsurance (for Property/Casualty Reinsurers) or NAIC Form CR-S Reinsurance Assumed (for Life and Health Reinsurers);

(2) A Maryland Insurance Administration Reinsurance Application;

(3) An updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from U.S. domestic ceding insurers;

(4) The report of the independent auditor on the financial statements of the insurance enterprise and the audited financial statements, regulatory filings and actuarial opinions (as filed with the non-U.S. jurisdiction supervisor, with a translation into English). Upon the initial application for certification, the Commissioner may consider audited financial statements for the last 2 years filed with its non-U.S. jurisdiction supervisor;

(5) A certification from the certified reinsurer’s domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction’s highest regulatory action level;

(6) Any other document or information that the Commissioner considers necessary to determine eligibility to act as a certified reinsurer; and

(7) A properly executed NAIC Form CR-1 Certificate of Certified Reinsurer as evidence that the applicant agrees to:

(a) Submit to the jurisdiction of the State;

(b) The Appointment of the Commissioner as an agent for service of process in this State; and

(c) Provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment.

K. If an applicant for certification has been certified as a reinsurer in a NAIC accredited jurisdiction, the Commissioner shall have the discretion to defer to that jurisdiction’s certification, and to defer to the rating assigned by that jurisdiction, if the assuming insurer submits a properly executed NAIC Form CR-1 and any additional information the Commissioner requires. The assuming insurer shall be considered to be a certified reinsurer in this State based on the following limitations:

(1) Any change in the certified reinsurer’s status or rating in the other jurisdiction shall apply automatically in this State as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the Commissioner of any change in its status or rating within 10 days after receiving notice of the change.

(2) The Commissioner may withdraw recognition of the other jurisdiction’s rating at any time and assign a new rating in accordance with Regulation .25 of this chapter.

(3) The Commissioner may withdraw recognition of the other jurisdiction’s certification at any time, with written notice to the certified reinsurer. Unless the Commissioner suspends or revokes the certified reinsurer’s certification in accordance with Regulation .25 of this chapter, the certified reinsurer’s certification shall remain in good standing in this State for a period of 3 months, which shall be extended if additional time is necessary to consider the assuming insurer’s application for certification in this State.

L. For continued eligibility as a certified reinsurer, a certified reinsurer shall agree to meet applicable information filing requirements as determined by the Commissioner. All information submitted by certified reinsurers which is not otherwise public information subject to disclosure shall be exempted from disclosure under General Provisions Article, Title 4, Annotated Code of Maryland, and shall be withheld from public disclosure. The certified reinsurer shall by May 30 of each year, file with the Commissioner:

(1) A properly executed NAIC Form CR-F Assumed Reinsurance (for Property/Casualty Reinsurers) or NAIC Form CR-S Reinsurance Assumed (for Life and Health Reinsurers);

(2) A Maryland Insurance Administration Reinsurance Application;

(3) An updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from U.S. domestic ceding insurers;

(6) Any other document or information that the Commissioner considers necessary to determine continued eligibility to act as a certified reinsurer; and

(7) A properly executed NAIC Form CR-1 Certificate of Certified Reinsurer as evidence that the applicant agrees to:

(a) Submit to the jurisdiction of the State;

(b) The Appointment of the Commissioner as an agent for service of process in this State; and

(c) Provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment.

M. Notification of the Commissioner by the Certified Reinsurer. In order to obtain or maintain a certification, a certified reinsurer shall agree to notify and provide a written statement describing the changes and the reasons therefore in writing to the Commissioner within 10 business days of:

(1) Any regulatory actions taken against the certified reinsurer;

(2) Any change in the provisions of its domiciliary license; or

(3) Any change in rating by an acceptable rating agency pursuant to §F(3) of this regulation.

Cross References

31.05.08.25A(1)

31.05.08.27

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.25 Change in Certification Rating or Suspension or Revocation of Certification.

A. Change in Certification Rating.

(1) In the case of a downgrade of a financial strength rating by a rating agency, or other change in circumstance, the Commissioner shall upon written notice to the certified reinsurer assign a new certification rating to the certified reinsurer in accordance with the requirements of Regulation .24 of this chapter. If the Commissioner downgrades the certified reinsurer’s certification rating, the certified reinsurer shall meet the security requirements applicable to its new certification rating for all business it has assumed as a certified reinsurer.

(2) If the Commissioner upgrades a certified reinsurer’s certification rating, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the Commissioner shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating.

B. Authority to Suspend or Revoke. The Commissioner may upon written notice and opportunity for a hearing pursuant to Insurance Article, §2-210, Annotated Code of Maryland, suspend or revoke a certified reinsurer’s certification at any time if:

(1) The certified reinsurer fails to meet its obligations or security requirements under this chapter;

(2) Other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the Commissioner to reconsider the certified reinsurer’s ability or willingness to meet its contractual obligations; or

(3) The certified reinsurer ceases to meet other requirements for certification.

C. Suspension or Revocation of the Certification of a Certified Reinsurer.

(1) While a reinsurer’s certification is suspended, a reinsurance contract issued or renewed after the effective date of the suspension does not qualify for credit except to the extent the reinsurer’s obligations under the contract are secured in accordance with Insurance Article, §5-914, Annotated Code of Maryland.

(2) If a reinsurer’s certification is revoked, credit for reinsurance may not be granted after the effective date of the revocation except to the extent that the reinsurer’s obligations under the contract are secured in accordance with Insurance Article, §5-911, Annotated Code of Maryland, or Insurance Article, §5-914, Annotated Code of Maryland.

D. Notwithstanding the change of a certified reinsurer’s certification rating or suspension or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of 3 months for all reinsurance ceded to that certified reinsurer, unless the Commissioner finds that the reinsurance is found to be at high risk of uncollectibility.

Cross References

31.05.08.24K(2)

31.05.08.24K(3)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.26 Qualified Jurisdictions.

A. Eligibility.

(1) The Commissioner shall maintain and publish a list of qualified jurisdictions under which an assuming insurer, licensed and domiciled in that jurisdiction, is eligible to be considered for certification by the Commissioner as a certified reinsurer.

(2) In order to determine whether the domiciliary jurisdiction of a non-U.S. assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall:

(a) Evaluate the reinsurance supervisory system of the non-U.S. jurisdiction, both initially and on an ongoing basis;

(b) Consider the rights, benefits and extent of reciprocal recognition afforded by a non-U.S. jurisdiction to reinsurers licensed and domiciled in the U.S.; and

(i) The framework under which the assuming insurer is regulated;

(ii) The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance;

(iii) The substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction;

(iv) The form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used for purposes of those reports;

(v) The domiciliary regulator’s cooperation with U.S. regulators, including the Commissioner;

(vi) The history of performance by assuming insurers in the domiciliary jurisdiction;

(vii) Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors or successor organization; and

(viii) Any other matters deemed relevant by the Commissioner.

(3) The Commissioner may not recognize a jurisdiction as a qualified jurisdiction unless the Commissioner has determined that the jurisdiction adequately and promptly enforces final U.S. judgments or arbitration awards.

(4) A qualified jurisdiction shall agree in writing to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction.

B. Additional Considerations.

(1) The Commissioner shall consider the list of qualified jurisdictions published through the NAIC Committee Process in determining qualified jurisdictions in this State.

(2) In determining whether a jurisdiction is a qualified jurisdiction, the Commissioner shall consider the NAIC’s list:

(a) when the jurisdiction has been evaluated for inclusion on the list; and

(b) whenever the list is amended.

(3) If the Commissioner approves a jurisdiction as qualified that does not appear on the NAIC’s list of qualified jurisdictions, the Commissioner shall provide to the NAIC, upon written request, information relating to such determination pursuant to the requirements in Section A of this regulation.

(4) The Commissioner shall recognize as a qualified jurisdiction in this State any state that meets the requirements for accreditation under the NAIC’s financial standards and accreditation program.

(5) The Commissioner shall withdraw recognition of those jurisdictions that are no longer qualified.

(6) The Commissioner shall publish notice of jurisdictions that have qualified or are no longer qualified to be recognized as a qualified jurisdiction.

Cross References

31.05.08.24F(1)

31.05.08.27

31.05.08.28B(3)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.27 Mandatory Funding Clause.

In addition to the requirements of Regulations .14—.18 of this chapter, reinsurance contracts entered into or renewed under Regulations .24—.26 of this chapter shall include a funding clause, which requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any unfavorable financial statement accounting treatment on the ceding insurer under this chapter for reinsurance ceded to the certified reinsurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.28 Credit for Reinsurance — Reciprocal Jurisdictions

A. Pursuant to Insurance Article, §5-917, Annotated Code of Maryland, the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a reciprocal jurisdiction, and which meets the other requirements of this regulation.

B. A “reciprocal jurisdiction” means a jurisdiction, as designated by the Commissioner pursuant to §D of this regulation that is:

(1) A non-U.S. jurisdiction that is subject to an in-force covered agreement with the U.S., each within its legal authority, or, in the case of a covered agreement between the U.S. and the European Union, is a member state of the European Union. For purposes of this section, a “covered agreement” is an agreement:

(a) Entered into pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. §§313 and 314; and

(b) Currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this State or for allowing the ceding insurer to recognize credit for reinsurance;

(2) A U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standard and accreditation program; or

(3) A qualified jurisdiction as determined by the Commissioner pursuant to Insurance Article, §5-909, Annotated Code of Maryland, and Regulation .26 of this chapter which is not otherwise described in §B(1) or (2) of this regulation and the Commissioner:

(a) Provides that an insurer which has its head office or is domiciled in such qualified jurisdiction shall receive credit for reinsurance ceded to a U.S.-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in such qualified jurisdictions;

(b) Does not require a U.S.-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer subject to regulation by the non-U.S. jurisdiction or as a condition to allow the ceding insurer to recognize credit for such reinsurance;

(c) Recognizes the U.S.’s state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in such qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this State or another jurisdiction accredited by the NAIC shall be subject to:

(i) Worldwide prudential insurance group supervision including worldwide group governance, solvency, and capital; and

(ii) Reporting, as applicable, by the Commissioner or the commissioner of the domiciliary state. Insurers and insurance groups will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and

(d) Provides written confirmation by a competent regulatory authority in such qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the Commissioner in accordance with a memorandum of understanding or similar document between the Commissioner and such qualified jurisdiction, including, but not limited to:

(i) The International Association of Insurance Supervisors Multilateral Memorandum of Understanding; or

(ii) Other multilateral memoranda of understanding coordinated by the NAIC.

C. Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this State to an assuming insurer meeting each of the conditions set forth below:

(1) The assuming insurer shall be licensed to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction;

(2) The assuming insurer shall have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set forth in §C(7) of this regulation according to the methodology of its domiciliary jurisdiction, in the following amounts:

(a) No less than $250,000,000; or

(b) If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, then the association shall have:

(i) Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least $250,000,000; and

(ii) A central fund containing a balance of the equivalent of at least $250,000,000;

(3) The assuming insurer shall have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:

(a) If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction as defined in §B of this regulation, the ratio specified in the applicable covered agreement;

(b) If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in §B of this regulation, a risk-based capital ratio of 300 percent of the authorized control level, calculated in accordance with the formula developed by the NAIC; or

(c) If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in §B of this regulation, after consultation with the reciprocal jurisdiction and considering any recommendations published through the NAIC Committee Process, such as solvency or capital ratio as the Commissioner determines to be an effective measure of solvency;

(4) The assuming insurer shall agree to and provide adequate assurance, in the form of a properly executed Form RJ-1 Certificate of Reinsurer Domiciled in Reciprocal Jurisdiction, of its agreement to:

(a) Provide prompt written notice and explanation to the Commissioner if it falls below the minimum requirements set forth in §C(2) or (3) of this regulation, or if any regulatory action is taken against it for serious noncompliance with applicable law;

(b) Consent in writing to the jurisdiction of the courts of this State and to the appointment of the Commissioner as agent for service of process. In addition:

(i) The Commissioner may require that such consent be provided and included in each reinsurance agreement under the Commissioner’s jurisdiction; and

(ii) Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency of delinquency laws;

(c) Consent in writing to pay all final judgements, wherever enforcement is sought, obtained by a ceding insurer, that have been declared enforceable in the territory where the judgement was obtained;

(d) Include a provision in each reinsurance agreement requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgement that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable;

(e) Confirm that it is not presently participating in any solvent scheme of arrangement, which involves this State’s ceding insurers, and agrees to notify the ceding insurer and the Commissioner of such solvent scheme arrangement; and to provide 100 percent security to the ceding insurer consistent with the terms of the scheme should the assuming insurer enter into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provision of Insurance Article, §§5-908 and 5-914, Annotated Code of Maryland, and Regulations .14—.18 and .22 of this chapter. For purposes of this regulation, the term “solvent scheme of arrangement” means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer’s home jurisdiction either to:

(i) Finally commute liabilities of duly noticed class members or creditors of a solvent debtor; or

(ii) To reorganize or restructure the debts and obligations of a solvent debtor on a final basis and which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer’s home jurisdiction; and

(f) Meet the applicable information filing requirements as set forth in §C(5) of this regulation;

(5) The assuming insurer or its legal successor shall provide, if requested by the Commissioner, on behalf of itself and any legal predecessors, the following documentation:

(a) For the 2 years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer’s annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report;

(b) For the 2 years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer’s supervisor;

(c) An updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the U.S. shall be submitted prior to entry into the reinsurance agreement and on a semi-annual basis thereafter; and

(d) Information regarding the assuming insurer’s assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in §C(6) of the regulation, shall be provided prior to entry into the reinsurance agreement and on a semi-annual basis thereafter;

(6) The assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment will be evidenced if any of the following criteria is met:

(a) More than 15 percent of the reinsurance recoverable from the assuming insurer are overdue and in dispute as reported to the Commissioner;

(b) More than 15 percent of the assuming insurer’s ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of 90 days or more which are not in dispute and which exceed for each ceding insurer $100,000, or as otherwise specified in a covered agreement; or

(c) The aggregate amount of reinsurance recoverable on paid losses which are not in dispute, but are overdue by 90 days or more, exceeds $50,000,000, or as otherwise specified in a covered agreement;

(7) The assuming insurer’s supervisory authority shall confirm to the Commissioner on an annual basis that the assuming insurer complies with the requirements set forth in §C(2) and (3) of this regulation; and

(8) The assuming insurer may provide the Commissioner with information on a voluntary basis.

D. List of Reciprocal Jurisdictions.

(1) The Commissioner shall create and publish a list of reciprocal jurisdictions.

(2) A list of reciprocal jurisdictions is published through the NAIC Committee Process. The Commissioner’s list shall include any reciprocal jurisdiction as defined under §B of this regulation and shall consider any other reciprocal jurisdiction included on the NAIC list. The Commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions as provided by applicable law, regulation, or in accordance with criteria published through the NAIC Committee process.

(3) The Commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a reciprocal jurisdiction, as provided by applicable law, regulation, or in accordance with a process published through the NAIC Committee process, except that the Commissioner may not remove from the list a reciprocal jurisdiction as defined under §B(1) and (2) of this regulation. Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to Insurance Article, Title 5, Subtitle 9, Annotated Code of Maryland.

E. List of Assuming Insurers.

(1) The Commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this regulation and to which cessions shall be granted credit in accordance with this regulation.

(2) If an NAIC accredited jurisdiction has determined that the conditions set forth in §C of this regulation have been met, the Commissioner may defer to that jurisdiction’s determination, and add such assuming insurer to the list of assuming insurers to which cessions shall be granted credit in accordance with this section.

(3) The Commissioner may accept financial documentation filed with another NAIC accredited jurisdiction or with the NAIC in satisfaction of the requirements of §C of this regulation.

(4) When requesting that the Commissioner defer to another NAIC accredited jurisdiction’s determination, an assuming insurer shall submit a properly executed NAIC Form RJ-1 and additional information as the Commissioner may require. A state that has received such a request shall notify other states through the NAIC Committee process and provide relevant information with respect to the determination of eligibility.

F. Suspension of Assuming Insurers.

(1) If the Commissioner determines that an assuming insurer no longer meets one or more of the requirements under this regulation, the Commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this section.

(2) While an assuming insurer’s eligibility is suspended, no reinsurance agreement issued, amended or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer’s obligations under the contract are secured in accordance with Insurance Article, §5-914, Annotated Code of Maryland.

(3) If an assuming insurer’s eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer’s obligations under the contract are secured in a form acceptable to the Commissioner and consistent with the provisions of Insurance Article, §5-914, Annotated Code of Maryland.

G. Security.

(1) Before denying statement credit or imposing a requirement to post security with respect to §F of this regulation or adopting any similar requirement that will have substantially the same regulatory impact as security, the Commissioner shall:

(a) Communicate with the ceding insurer, the assuming insurer, and the assuming insurer’s supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in §C of this regulation;

(b) Provide the assuming insurer with 30 days from the initial communication to submit a plan to remedy the defect, and 90 days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection; and

(2) After the expiration of 90 days or less, as set out in §G(1)(b) of this regulation, if the Commissioner determines that no or insufficient action was taken by the assuming insurer, the Commissioner may impose any of the requirements as set out in this section.

H. If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.

Cross References

31.05.08.29B(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

COMAR 31.05.08.29 Term and Universal Life Insurance Reserve Financing.

A. The purpose and intent of this regulation is to establish uniform, national standards governing reserve financing arrangements pertaining to life insurance policies containing guaranteed nonlevel gross premiums, guaranteed nonlevel benefits, and universal life insurance policies with secondary guarantees; and to ensure that, with respect to each such financing arrangement, funds consisting of primary security and other security, as defined in Regulation .02 of this chapter, are held by or on behalf of ceding insurers in the forms and amounts required herein.

B. Applicability of this Regulation.

(1) This regulation shall apply to reinsurance treaties that cede liabilities pertaining to covered policies, as that term is defined in Regulation .02B(4) of this chapter, issued by a life insurance company domiciled in this State.

(2) This regulation and Regulations .03—.28 of this chapter shall both apply to such reinsurance treaties; provided that, in the event of a direct conflict between the provisions of this regulation and Regulations .03—.28 of this chapter, the provisions of this regulations shall apply, but only to the extent of the conflict.

(3) This regulation does not apply to:

(a) Reinsurance of:

(i) Policies that satisfy the criteria for exemption set forth in COMAR 31.05.03.11F or G and which are issued before the effective date of this regulation;

(ii) Portions of policies that satisfy the criteria for exemption set forth in COMAR 31.05.03.11E and which are issued before the effective date of this regulation;

(iii) Any universal life insurance policy that has a secondary guarantee period, if any, of 5 years or less, has specified premium for the secondary guarantee period that is not less than the net level reserve premium for the secondary guarantee period based on the Commissioners Standard Ordinary valuation tables and valuation interest rate applicable to the issue year of the policy, and has an initial surrender charge that is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period;

(iv) Credit life insurance;

(v) Any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts; or

(vi) Any group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of 1 year;

(b) Reinsurance ceded to an assuming insurer that meets the applicable requirements of Insurance Article, §§5-904(e) and 5-907, Annotated Code of Maryland;

(c) Reinsurance ceded to an assuming insurer that meets the applicable requirements of Insurance Article, §5-904(c) or (d) or §5-906, Annotated Code of Maryland, and that:

(i) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual, without any departure from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer’s reported surplus and are material enough that they need to be disclosed in the financial statement of the assuming insurer pursuant to Statement of Statutory Accounting Principles No. 1; and

(ii) Is not in a company action level event, regulatory action level event, authorized control level event, or mandatory control level event as those terms are defined in Insurance Article, §§4-305—4-308, Annotated Code of Maryland, when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies, as the same may be amended by the NAIC from time to time, without deviation;

(d) Reinsurance ceded to an assuming insurer that meets the applicable requirements of Insurance Article, §5-904(c) or (d) or §5-906, Annotated Code of Maryland, and that:

(i) Is not an affiliate, as that term is defined in Insurance Article, §7-101, Annotated Code Maryland, of the insurer ceding the business to the assuming insurer or any insurer that directly or indirectly ceded the business to that ceding insurer;

(ii) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual;

(iii) Is both licensed or accredited in at least ten states including its state of domicile and not licensed in any state as a captive, special purpose vehicle, special purpose financial captive, special purpose life reinsurance company, limited purpose subsidiary, or any other similar licensing regime; and

(iv) Is not, or would not be below 500 percent of the authorized control level RBC as that term is defined in Insurance Article, §4-301, Annotated Code of Maryland, when its risk-based capital is calculated in accordance with the life risk-based capital reporting including overview and instructions for companies, as the same may be amended by the NAIC from time to time, without deviation, and without recognition of any departures from NAIC statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer’s reported surplus;

(e) Reinsurance ceded to an assuming insurer that meets the requirements of Insurance Article, §5-916(b)(4), Annotated Code of Maryland; or

(f) Reinsurance not otherwise exempt under §B(3)(a)—(e) of this regulation if the Commissioner, after consulting with the NAIC Financial Analysis Working Group or other group of regulators designated by the NAIC, as applicable, determines under all the facts and circumstances that all of the following apply:

(i) The risks are clearly outside of the intent and purpose of this regulation;

(ii) The risks are included within the scope of this regulation only as a technicality; and

(iii) The application of this regulation to those risks is not necessary to provide appropriate protection to policyholders.

(4) The Commissioner shall publicly disclose any decision made pursuant to §B(3)(f) of this regulation to exempt a reinsurance treaty from this regulation, as well as the general basis for the decision, including a summary description of the treaty.

C. The actuarial method to establish the required level of primary security for each reinsurance treaty subject to this regulation shall be VM-20, applied on a treaty-by-treaty basis, including all relevant definitions, from the Valuation Manual as then in effect. This method shall be applied as follows:

(1) For covered policies described in Regulation .02B(4)(a) of this chapter, the actuarial method is the greater of the deterministic reserve or the net premium reserve regardless of whether the criteria for exemption testing can be met;

(2) If, for covered policies described in Regulation .02B(4)(a) of this chapter, the covered policies do not meet the requirements of the stochastic reserve exclusion test in the Valuation Manual, then the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the net premium reserve;

(3) If, for covered policies described in Regulation .02B(4)(a) of this chapter, the covered policies are reinsured in a reinsurance treaty that also contains covered policies described in Regulation .02B(4)(b) of this chapter, the ceding insurer may elect to instead use §C(5) of this regulation as the actuarial method for the entire reinsurance agreement;

(4) Regardless of whether §C(1), (2), (3), or (5) of this regulation is used, the actuarial method shall comply with any requirements or restrictions that the Valuation Manual imposes when aggregating these policy types for purposes of principle-based reserve calculations;

(5) For covered policies described in Regulation .02B(4)(b) of this chapter, the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the net premium reserve regardless of whether the criteria for exemption testing can be met;

(6) Except as provided in §C(7) of this regulation, the actuarial method shall be applied on a gross basis to all risks with respect to the covered policies as originally issued or assumed by the ceding insurer;

(7) If the reinsurance treaty cedes less than 100 percent of the risk with respect to the covered policies, then the required level of primary security may be reduced as follows:

(a) If a reinsurance treaty cedes only a quota share of some or all of the risks pertaining to the covered policies, the required level of primary security, as well as any adjustment under §C(7)(c) of this regulation, may be reduced to a pro rata portion in accordance with the percentage of the risk ceded;

(b) If the reinsurance treaty in a non-exempt arrangement cedes only the risks pertaining to a secondary guarantee, the required level of primary security may be reduced by an amount determined by applying the actuarial method on a gross basis to all risks, other than risk relating to the secondary guarantee, pertaining to the covered policies, except that for covered policies for which the ceding insurer did not elect to apply the provisions of VM-20 to establish statutory reserves, the required level of primary security may be reduced by the statutory reserve retained by the ceding insurer on those covered policies, where the retained reserve of those covered policies shall be reflective of any reduction pursuant to the cession of mortality risk on a yearly renewable term basis in an exempt arrangement;

(c) If a portion of the covered policy risk is ceded to another reinsurer on a yearly renewable term basis in an exempt arrangement, the required level of primary security may be reduced by the amount resulting by applying the actuarial method including the reinsurance section of VM-20 to the portion of the covered policy risks ceded in the exempt arrangement, except that for covered policies issued prior to January 1, 2017, this adjustment, is not to exceed [cx/ (2 * number of reinsurance premiums per year)] where cx is calculated using the same mortality table used in calculating the net premium reserve;

(d) For any other treaty ceding a portion of risk to a different reinsurer, including, but not limited to stop loss, excess of loss and other non-proportional reinsurance treaties, there will be no reduction in the required level of primary security;

(e) It is possible for any combination of §C(7)(a)—(d) of this regulation to apply. Such adjustments to the required level of primary security will be done in the sequence that accurately reflects the portion of the risk ceded via the treaty. The ceding insurer shall document the rationale and steps taken to accomplish the adjustments to the required level of primary security due to the cession of less than 100 percent of the risk; and

(f) The adjustments for other reinsurance will be made only with respect to reinsurance treaties entered into directly by the ceding insurer. The ceding insurer shall make no adjustment as a result of a retrocession treaty entered into by the assuming insurers;

(8) In no event shall the required level of primary security resulting from application of the actuarial method exceed the amount of statutory reserves ceded;

(9) If the ceding insurer cedes risks with respect to covered policies, including any riders, in more than one reinsurance treaty subject to this regulation, in no event shall the aggregate required level of primary security for those reinsurance treaties be less than the required level of primary security calculated using the actuarial method as if all risks ceded in those treaties were ceded in a single treaty subject to this regulation;

(10) If a reinsurance treaty subject to this regulation ceded risk on both covered and non-covered policies, credit for the ceded reserves shall be determined as follows:

(a) The actuarial method shall be used to determine the required level of primary security for the covered policies, and §D of this regulation shall be used to determine the reinsurance credit for the covered policy reserves; and

(b) Credit for the non-covered policy reserves shall be granted only to the extent that security, in addition to the security held to satisfy the requirements of §C(10)(a) of this regulation, is held by or on behalf of the ceding insurer in accordance with Insurance Article, Title 5, Subtitle 9, Annotated Code of Maryland. Any primary security used to meet the requirements of this subparagraph may not be used to satisfy the required level of primary security for the covered policies; and

(11) For the purposes of both calculating the required level of primary security pursuant to the actuarial method and determining the amount of primary security and other security, as applicable, held by or on behalf of the ceding insurer, the following shall apply:

(a) For assets, including any such assets held in trust, that would be admitted under the NAIC Accounting Practices and Procedures Manual if they were held by the ceding insurer, the valuations are to be determined according to statutory accounting procedures as if such assets were held in the ceding insurer’s general account and without taking into consideration the effect of any prescribed or permitted practices; and

(b) For all other assets:

(i) The valuations are to be those that were assigned to the assets for the purpose of determining the amount of reserve credit taken;

(ii) The asset spread tables and asset default cost tables required by VM-20 shall be included in the actuarial method if adopted by the NAIC’s Life Actuarial(a) Task Force no later than the December 31 on or immediately preceding the valuation date for which the required level of primary security is being calculated; and

(iii) The tables of asset spreads and asset default costs shall be incorporated into the actuarial method in the manner specified in VM-20.

D. Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation.

(1) Subject to the exemptions described in §B(3) of this regulation and the provisions of §D(2) of this regulation, credit for reinsurance shall be allowed with respect to ceded liabilities pertaining to covered policies pursuant to Insurance Article, §5-904, 5-914, or 5-917, Annotated Code of Maryland, if, in additional to all other requirements imposed by law or regulation, the following requirements are met on a treaty-by-treaty basis:

(a) The ceding insurer’s statutory policy reserves with respect to the covered policies are established in full and in accordance with the applicable requirements of Insurance Article, Title 5, Subtitle 3, Annotated Code of Maryland, and related regulations and actuarial guidelines, and credit claimed for any reinsurance treaty subject to this regulation does not exceed the proportionate share of those reserves ceded under the contract;

(b) The ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to this regulation and provides support for its calculation as determined to be acceptable to the Commissioner;

(c) Funds consisting of primary security, in an amount at least equal to the required level of primary security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty within the meaning of Insurance Article, §5-914, Annotated Code of Maryland, on a funds withheld, trust, or modified coinsurance basis;

(d) Funds consisting of other security, in an amount at least equal to any portion of the statutory reserves as to which primary security is not held pursuant to §D(1)(c) of this regulation, are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of Insurance Article, §5-914, Annotated Code of Maryland;

(e) Any trust used to satisfy the requirements of this §D of this regulation shall comply with all of the conditions and qualifications of Regulation .15 of this chapter, except that:

(i) Funds consisting of primary security or other security held in trust, shall for the purposes identified in §C(11) of this regulation, be valued according to the valuation rules set forth in §C(11) of this regulation, as applicable;

(ii) There are no affiliate investment limitations with respect to any security held in such trust if such security is not needed to satisfy the requirements of §D(1)(c) of this regulation;

(iii) The reinsurance treaty shall prohibit withdrawals or substitutions of trust assets that would leave the fair market value of the primary security within the trust (when aggregated with primary security outside the trust that is held by or on behalf of the ceding insurer in the manner required by §D(1)(c) of this regulation) below 102 percent of the level required by §D(1)(c) of this regulation at the time of the withdrawal or substitution; and

(iv) The determination of reserve credit under Regulation .20 of this chapter shall be determined according to the valuation rules set forth in §C(11) of this regulation, as applicable; and

(f) The reinsurance treaty has been approved by the Commissioner.

(2) Requirements at Inception Date and on an Ongoing Basis; Remediation.

(a) The requirements of §D(1) of this regulation, shall be satisfied as of the date that risks under covered policies are ceded, if such date is on or after the effective date of this regulation, and on an ongoing basis thereafter.

(b) Under no circumstances shall a ceding insurer take or consent to any action or series of actions that would result in a deficiency under §D(1)(c) or (d) of this regulation with respect to any reinsurance treaty under which covered policies have been ceded, and in the event that a ceding insurer becomes aware at any time that such a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as quickly as possible.

(c) Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of §B of this regulation shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which covered policies have been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of §D(1)(c) and (d) of this regulation were satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held pursuant to §D(1)(c) of this regulation, unless either:

(i) The requirements of §D(1)(c) and (d) of this regulation were fully satisfied as of the valuation date as to such reinsurance treaty; or

(ii) Any deficiency has been eliminated before the due date of the quarterly or annual statement to which the valuation date relates through the addition of primary security or other security, as the case may be, in such amount and in such form as would have caused the requirements of §D(1)(c) and (d) of this regulation to be fully satisfied as of the valuation date.

(d) Nothing in §D(2)(c) of this regulation shall be construed to allow a ceding company to maintain any deficiency under §D(1)(c) or (d) of this regulation for any period of time longer than is reasonably necessary to eliminate it.

E. No insurer that has covered policies to which this regulation applies shall take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangements if the purpose of such action, transaction, or arrangement or series thereof is to avoid the requirements of this regulation, or to circumvent its purpose and intent.

Cross References

31.05.08.02B(2)

31.05.08.02B(4)

31.05.08.02B(5)(b)

31.05.08.02B(10)

31.05.08.02B(12)

31.05.08.02B(13)

31.05.08.02B(18)

31.05.08.02B(20)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective June 17, 1993 (20:14 Md. R. 1164); adopted permanently effective October 11, 1993 (20:20 Md. R. 1571)
Administrative History: Regulations .02B and .08F amended, and Regulations .09—.17 adopted, as an emergency provision effective December 19, 1997 (25:2 Md. R. 73); adopted permanently effective June 15, 1998 (25:12 Md. R. 947)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.97 to COMAR 31.05.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.17 repealed and new Regulations .01—.24 adopted effective June 5, 2006 (33:11 Md. R. 953)
Administrative History: ——————
Administrative History: Chapter revised effective August 18, 2014 (41:16 Md. R. 947)
Administrative History: Regulation .02B amended effective October 1, 2022 (49:19 Md. R. 868)
Administrative History: Regulation .24 amended effective July 1, 2021 (48:13 Md. R. 510)
Administrative History: Regulation .28D amended effective December 11, 2023 (50:24 Md. R. 1043)
Administrative History: Regulation .29 adopted effective October 1, 2022 (49:19 Md. R. 868)
Authority: Insurance Article, §§1-101(jj), 2-109, 2-205, 2-209, and 5-901—5-917, Annotated Code of Maryland

31.05.09 Mortgage Loans

COMAR 31.05.09.01 Information To Be Filed.

All companies shall have the following information filed with each mortgage, and kept ready for convenient inspection by examiners from this Administration:

A. The mortgage note and deed, and all assignments of them, properly recorded;

B. A detailed appraisal of the property securing the mortgage, made by a disinterested, unaffiliated appraiser, with the appraiser's qualifications attached; an appraisal made by any competent licensed real estate operator with a short statement of the licensed real estate operator's experience is sufficient; and

C. One of the following:

(1) A title insurance policy,

(2) An abstract of title to the property made by a qualified attorney and certified by him,

(3) A certificate of title from the attorney making the title examination;

D. Fire insurance policies upon all improvements, with standard mortgagee clause attached; and

E. A record of the amount at which the property is appraised for taxation at the date of the loan and the date to which all State, county, and municipal taxes on the property have been paid.

History

Administrative History: Effective date: February 11, 1941
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: Regulation .02 adopted effective June 7, 1982 (9:11 Md. R. 1126)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.15 to COMAR 31.05.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 5-511(g), Annotated Code of Maryland

COMAR 31.05.09.02 Required Procedure.

An insurance company that is a party to a mortgage loan participation agreement shall have the items listed in Regulation .01A and B of this chapter in its possession. The insurer may have the lending institution certify annually that the items listed in Regulation .01C, D, and E of this chapter are in force or have been paid.

History

Administrative History: Effective date: February 11, 1941
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: Regulation .02 adopted effective June 7, 1982 (9:11 Md. R. 1126)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.15 to COMAR 31.05.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 5-511(g), Annotated Code of Maryland

31.05.10 Financial Guaranty Insurance

COMAR 31.05.10.01 Definitions

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Asset-Backed Security.

(a) “Asset-backed security” has the meaning stated in Insurance Article, §5-511(a)(3), Annotated Code of Maryland.

(b) “Asset-backed security” includes a pool of credit default swaps or credit default swaps referencing a pool of obligations if:

(i) The swap counterparty whose obligations are insured under the credit default swap is a special purpose corporation, special purpose trust, or other special purpose legal entity;

(ii) No reference obligation in the pool, other than an obligation directly payable by, guaranteed by, or backed by the full faith and credit of the United States government or that otherwise qualifies as collateral under regulations adopted by the Commissioner under this chapter, has a notional amount exceeding 10 percent of the pool's aggregate notional amount; and

(iii) The insurer has the benefit of a deductible or other first credit protection against claims under its insurance policy.

(2) Average Annual Debt Service.

(a) “Average annual debt service” means the amount of insured unpaid principal and interest on an obligation multiplied by the number of insured obligations, assuming that each obligation represents a $1,000 par value, divided by the amount equal to the aggregate life of all the obligations.

(b) “Average annual debt service” expressed as a formula in regard to bonds, is as follows:

Average Annual Debt Service = (Total Debt Service × No. of Bonds)/Bond Years

where:

Total Debt Service = Insured Unpaid Principal + Interest

Number of Bonds = Total Insured Principal/1,000

Bond Years = Number of Bonds × Term in Years

(3) “Collateral” has the meaning stated in §C of this regulation.

(4) “Contingency reserve” means an additional liability reserve established by a financial guaranty insurer to protect policyholders against the effects of adverse economic cycles or other unforeseen circumstances.

(5) Credit Default Swap.

(a) “Credit default swap” means an agreement that references the credit derivative definitions published from time to time by the International Swap and Derivatives Association, Inc. or otherwise acceptable to the Commissioner under which a party agrees to compensate another party in the event of a payment default by insolvency of, or other adverse credit event with respect to, an issuer of a specified security or other obligation.

(b) A “credit default swap” is not an insurance contract and the making of a credit default swap is not doing insurance business.

(6) “Excess proceeds” means proceeds in excess of the proceeds necessary to pay an insured obligation.

(7) “Excess spread” means, with respect to any insured issue of asset-backed securities, the excess of:

(a) The scheduled cash flow on the underlying assets that is reasonably projected to be available, over the term of the insured securities after payment of the expenses associated with the insured issue, to make debt service payments on the insured securities; over

(b) The scheduled debt service requirements on the insured securities, if the excess is held in the same manner as collateral is required to be held under Regulation .06 of this chapter.

(8) “Financial guaranty insurance” has the meaning stated in §D of this regulation.

(9) “Financial guaranty insurer” means a domestic insurer that holds a certificate of authority for the purpose of transacting financial guaranty insurance in the State.

(10) “Governmental unit” means:

(a) The United States of America,

(b) Canada;

(c) A member country of the Organization of Economic Cooperation and Development having a sovereign rating in one of the top two generic rating classifications by a securities rating agency acceptable to the Commissioner;

(d) A state, territory, or possession of the United States of America;

(e) The District of Columbia;

(f) A province of Canada;

(g) A municipality or a political subdivision of any of the entities listed in §B(9)(a)—(f) of this regulation; or

(h) Any public agency or instrumentality of any of the entities listed in paragraphs §B(9)(a)—(g) of this regulation.

(11) “Guaranty of consumer debt obligation” means an insurance policy indemnifying a regulated financial institution or other purchaser or lender against loss or damage resulting from nonpayment of debts owed to the financial institution or other purchaser or lender for extensions of credit, including installment purchase agreements and leases, to individuals, provided in the normal course of the financial institution's, purchaser's, or lender's business.

(12) “Industrial development bond” means any security, or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project serving a private industrial, commercial, or manufacturing purpose and not payable or guaranteed by a governmental unit.

(13) “Investment grade” means that either the obligation or parity obligation of the same issuer has been:

(a) Determined to be in one of the top four generic lettered rating classifications by a securities rating agency acceptable to the Commissioner;

(b) Identified in writing by the rating agency as an insurable risk, deemed to be of investment grade quality for purposes of insurance; or

(c) Determined to be investment grade, as indicated by a rating in category 1 or 2, by the Securities Valuation Office of the National Association of Insurance Commissioners.

(14) Municipal Obligation Bond.

(a) “Municipal obligation bond” means any security or other instrument under which a payment obligation is created or issued by or on behalf of a governmental unit to finance a project serving a substantial public purpose, and that is:

(i) Payable from tax revenues, but not tax allocations, within the jurisdiction of the governmental unit;

(ii) Payable or guaranteed by the United States of America or any agency, department, or instrumentality of the United States of America, or by a state housing agency;

(iii) Payable from rates or charges, excluding tolls, levied or collected in respect of a non-nuclear utility project, public transportation facility, other than an airport facility, or public higher education facility; or

(iv) With respect to lease obligations, payable from future appropriations.

(b) “Municipal obligation bond” includes a lease payable or guaranteed by a unit of the United States government or a state.

(c) “Municipal obligation bond” does not include a lease of any governmental unit other than a unit of the United States government or a state.

(15) “Special revenue bond” means any security or other instrument under which a payment obligation is created that is:

(a) Issued by or on behalf of a governmental unit to finance a project serving a substantial public purpose; and

(b) Not payable from the sources enumerated in §B(13) of this regulation in connection with the payment of municipal obligation bonds.

(16) “Total liability” of a financial guaranty insurer means the aggregate amount of insured unpaid principal, interest, and other monetary payments, if any, of guaranteed obligations insured or assumed, less reinsurance ceded and less collateral.

C. “Collateral” means:

(1) Cash;

(2) The cash flow from obligations that are not callable and are scheduled to be received, based on expected prepayment speed, on or before the date of scheduled debt service, including scheduled redemptions or prepayments, on the insured obligation, if:

(a) The obligations are directly payable by, guaranteed by, or backed by the full faith and credit of the United States government; or

(b) In the case of insured obligations denominated or payable in foreign currency as permitted under Regulation .03B of this chapter, the obligations are directly payable by, guaranteed by, or backed by the full faith and credit of a foreign government or the central bank of the foreign government;

(3) The market value of investment grade securities in an amount not to exceed the total debt service on the insured obligation, other than securities evidencing an interest in the project financed with the proceeds of the insured obligations; or

(4) The face amount of each letter of credit that:

(a) Is irrevocable;

(b) Provides for payment under the letter of credit in all instances in which payment under a financial guaranty insurance policy is required;

(i) At an office of the letter of credit issuer in the United States; or

(ii) At an office of the letter of credit issuer located in the jurisdiction in which the trustee or paying agent for the insured obligation is located;

(d) Contains a statement that either:

(i) Identifies the insurer and any successor by operation of law, including any liquidator, rehabilitator, receiver, or conservator, as the beneficiary; or

(ii) Identifies the trustee or the paying agent for the insured obligation as the beneficiary;

(e) Contains a statement to the effect that the obligation of the letter of credit issuer under the letter of credit is an individual obligation of the issuer and is in no way contingent on reimbursement with respect to the letter of credit;

(f) Contains an issue date and a date of expiration;

(g) Either:

(i) Has a term at least as long as the shorter of the term of the insured obligation or the term of the financial guaranty policy; or

(ii) Provides that the letter of credit may not expire without 30 days prior written notice to the beneficiary and allows for drawing under the letter of credit if, before expiration, the letter of credit is not renewed or extended or a substitute letter of credit or alternate collateral meeting the requirements of this §C(4)(g) of this regulation is not provided;

(h) States that it is governed by the laws of a state of the United States or by the 1983 or 1993 Revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce, Publication 400 or 500, or any successor Revision if approved by the Commissioner, and contains a provision for an extension of time, of not less than 30 days after resumption of business, to draw against the letter of credit if one or more of the occurrences described in Article 19 of Publication 400 or 500 occurs; and

(i) Is issued by a bank, trust company, or savings and loan association that:

(i) Is organized and existing under the laws of the United States or any state of the United States or, in the case of a non-domestic banking organization, has a branch or agency office licensed under the laws of the United States or any state of the United States and is domiciled in a member country of the Organization of Economic Cooperation and Development having a sovereign rating in one of the top two generic lettered rating classifications by a securities rating agency acceptable to the Commissioner;

(ii) Has a long-term debt rating of at least investment grade, or is the principal operating subsidiary of a bank holding company that has a long-term debt rating of at least investment grade; and

(iii) Is not a parent, subsidiary, or affiliate of the trustee or paying agent, if any, with respect to the insured obligation if the trustee or paying agent is the named beneficiary of the letter of credit.

D. Financial Guaranty Insurance.

(1) “Financial guaranty insurance” means a surety bond, insurance policy, or, when issued by an insurer, an indemnity contract, and any guaranty similar to a surety bond, insurance policy, or indemnity contract, under which loss is payable on proof of occurrence of financial loss to an insured claimant, obligee, or indemnity as a result of any of the following events:

(a) Failure of any obligor on or issuer of any debt instrument or other monetary obligation, including equity securities guaranteed under a surety bond, insurance policy, or indemnity contract, to pay when due to be paid by the obligor or scheduled at the time to be received by the holder of the instrument or obligation principal, interest, premium, dividend, or purchase price of or on, or other amounts due or payable with respect to, such instrument or obligation, when the failure is the result of a financial default or insolvency or, if the payment source is investment grade, any other failure to make payment, regardless of whether the obligation is incurred directly or as guarantor by or on behalf of another obligor that also has defaulted;

(b) Changes in the levels of interest rates, whether short or long term, or the differential in interest rates between various markets or products;

(d) Inconvertibility of one currency into another for any reason, or inability to withdraw funds held in a foreign country resulting from restrictions imposed by a governmental authority;

(e) Changes in the value of specific assets or commodities, financial or commodity indices, or price levels in general; or

(f) Other events that the Commissioner determines are substantially similar to any of the events listed in §D(1)(a)—(e) of this regulation.

(2) “Financial guaranty insurance” does not include:

(a) Insurance of any loss resulting from any event described in §D(1) of this regulation, if the loss is payable only on the occurrence of any of the following, as specified in a surety bond, insurance policy, or indemnity contract:

(i) A fortuitous physical event;

(ii) A failure of or deficiency in the operation of equipment; or

(iii) An inability to extract or recover a natural resource;

(b) An individual or schedule public official bond;

(c) A contract bond, including bid, payment, or maintenance bond, or a performance bond where the bond is guaranteeing the performance of services pursuant to a contract other than a contract of indebtedness or other monetary obligation;

(d) A court bond required in connection with judicial, probate, bankruptcy, or equity proceedings, including waiver, probate, open estate, and life tenant bond;

(e) A bond running to federal, state, county, or municipal government, or other political subdivision, as a condition precedent to granting of a license to engage in a particular business or a permit to exercise a particular privilege;

(f) A loss security bond or utility payment indemnity bond, other than a bond guaranteeing a contract of indebtedness or other monetary obligation, running to a governmental unit, railroad, or charitable organization;

(g) A lease, purchase and sale, or concessionaire surety bond, other than a bond guaranteeing a contract of indebtedness or other monetary obligation;

(h) Guaranteed investment contracts issued by a life insurer that provide that the life insurer will make specified payments in exchange for specific premiums or contributions;

(i) Residual value insurance;

(j) Mortgage guaranty insurance;

(k) Indemnity contracts or similar guaranties, to the extent that they are not otherwise limited or proscribed by this chapter, in which a life insurer:

(i) Guarantees its obligations or indebtedness or the obligations or indebtedness of a subsidiary, as defined in Insurance Article, §7-101(f), Annotated Code of Maryland, other than a financial guaranty insurer, if, to the extent that any of the obligations or indebtedness are backed by specific assets, the assets must at all times be owned by the life insurer or the subsidiary, and, in the case of the guaranty of the obligations or indebtedness of the subsidiary that are not backed by specific assets of the life insurer, the guaranty terminates once the subsidiary ceases to be a subsidiary;

(ii) Guarantees obligations or indebtedness, including the obligation to substitute assets where appropriate, with respect to specific assets acquired by a life insurer in the course of normal investment activities and not for the purpose of resale with credit enhancement, or guarantees obligations or indebtedness acquired by its subsidiary, if the assets acquired pursuant to this item have been acquired by a special purpose entity whose sole purpose is to acquire specific assets of the life insurer or the subsidiary and issue securities or participation certificates backed by the assets, or sold to an independent third party; or

(iii) Guarantees obligations or indebtedness of an employee or agent of the life insurer; or

(l) Any other form of insurance covering risks that the Commissioner determines are substantially similar to any of the risks listed in §D(2)(a)—(k) of this regulation.

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.02 Contingency Reserve Requirements.

A. In General.

(1) In addition to the unearned premium reserve and the liability established for unpaid losses and loss adjustment expenses, a financial guaranty insurer shall maintain a contingency reserve.

(2) The purpose of the contingency reserve is to protect policyholders against loss during periods of extreme economic contraction.

B. Amount of Contingency Reserve. The contingency reserve shall be computed in accordance with COMAR 31.04.01.04.

Cross References

31.05.10.03B(2)

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.03 Scope of Certificate of Authority.

A. In General.

(1) A financial guaranty insurer that holds a certificate of authority for the purpose of transacting financial guaranty insurance may write financial guaranty insurance to insure debt instruments and other monetary obligations only in the following categories:

(a) Municipal obligation bonds;

(b) Special revenue bonds;

(d) Corporate obligations;

(e) Limited partnership obligations;

(f) Asset-backed securities, trust certificates, and trust obligations other than mortgage-backed securities secured by first mortgages on real property that are insurable by a mortgage guaranty insurer, unless:

(i) The mortgages with loan-to-value ratios in excess of 80 percent are insured by mortgage guaranty insurers; or

(ii) Additional mortgages with principal balances, other collateral with a market value, or, if the insured risk is investment grade, excess spread in an amount, in each instance at least equal to the coverage that would otherwise be provided by the mortgage guaranty insurers in accordance with this subsection, are pledged as additional security for the asset-backed securities;

(g) Installment purchase agreements executed as a condition of sale;

(h) Subject to §A(2) of this regulation, consumer debt obligations;

(i) Utility first mortgage obligations; and

(j) Any other debt instrument or monetary obligation that the Commissioner determines to be substantially similar to any of the items listed in §A(1)(a)—(i) of this regulation.

(2) Any guaranties of consumer debt obligations shall contain a provision that all liability terminates on the sale or transfer of the underlying consumer debt obligation to any transferee that is not an insured of the financial guaranty insurer under a similar policy.

B. Foreign Instruments and Obligations. A financial guaranty insurer that holds a certificate of authority for the purpose of transacting financial guaranty insurance may write financial guaranty insurance to insure non-United States dollar debt instruments or other monetary obligations denominated or payable in foreign currency, only for the categories listed in §A of this regulation, if:

(1) The currency is that of an Organization of Economic Cooperation and Development country or another country:

(a) Whose sovereign rating is investment grade; or

(b) Which is not disapproved by the Commissioner, in accordance with the standards of §C of this regulation, within 30 days after receipt of written notification;

(2) Reserves required pursuant to Regulation .02 of this chapter in regard to these obligations are established and adjusted quarterly based on the then-current foreign exchange rates;

(3) The obligations do not exceed 25 percent of an insurer's aggregate net liability; and

(4) The aggregate and single risk limitations prescribed by Regulation .04B and C of this chapter are determined by applying the then-current foreign exchange rates.

C. Approval or Disapproval by Commissioner.

(1) The Commissioner may not disapprove the currency of a country under §B(1)(b) of this regulation if the financial guaranty insurer demonstrates that there is no undue risk associated with insuring the timely payment of the instruments or obligations.

(2) In making a determination, the Commissioner shall consider the financial guaranty insurer's outstanding liabilities on non-investment grade instruments and obligations in relation to:

(a) Its outstanding liabilities on all instruments and obligations; and

(b) The amount of its surplus to policyholders.

D. Disclosure Requirement. A financial guaranty insurer may issue a financial guaranty insurance policy only if any prospectus that makes mention of the insurance policy discloses that the insurance is not covered by the Property and Casualty Insurance Guaranty Corporation pursuant to Insurance Article, Title 9, Subtitle 3, Annotated Code of Maryland.

Cross References

31.05.10.01C(2)(b)

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.04 Credit Risk Exposure Limits.

A. A financial guaranty insurer's outstanding total liability for municipal obligation bonds, special revenue bonds, and industrial development bonds shall be investment grade to the following extent:

(1) For financial guaranty insurers rated AAA by a nationally recognized statistical rating organization, at least 95 percent;

(2) For financial guaranty insurers rated AA by a nationally recognized statistical rating organization, at least 85 percent; and

(3) For financial guaranty insurers rated A by a nationally recognized statistical rating organization, at least 70 percent.

B. By written request of a financial guaranty insurer, the Commissioner may approve any other level considered appropriate.

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.05 Aggregate Risk Limits.

A. A financial guaranty insurer shall at all times maintain capital, surplus, and contingency reserve in the aggregate not less than the sum of:

(1) 0.3333 percent or 1/300th of the total liability under guaranties of municipal obligation bonds and special revenue bonds, including obligations demonstrated to the satisfaction of the Commissioner to be the functional equivalent of municipal obligation bonds or special revenue bonds, and investment grade utility first mortgage obligations; plus

(2) 0.6666 percent or 1/150th of the total liability under guaranties of investment grade asset-backed securities; plus

(3) 1.0 percent or 1/100th of the total liability under guaranties, to the extent secured by collateral or having a term of 7 years or less, of:

(a) Investment grade industrial development bonds; or

(b) Other investment grade obligations; plus

(4) 1.5 percent or 1/66.67th of the total liability under guaranties of other investment grade obligations; plus

(5) 2.0 percent or 1/50th of the total liability under guaranties of:

(a) Non-investment grade consumer debt obligations; and

(b) Non-investment grade asset-backed securities; plus

(6) 2.5 percent or 1/40th of the total liability under guaranties of non-investment grade obligations to the extent secured by first mortgages on commercial real estate and having loan-to-value ratios of 80 percent or less; plus

(7) 4.0 percent or 1/25th of the total liability under guaranties of other non-investment grade obligations.

B. If the amount of collateral required by §A(1) of this regulation is no longer maintained, that proportion of the obligation insured that is not collateralized shall be subject to the aggregate limits specified in §A(2) of this regulation.

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.06 Single Risk Limits.

A financial guaranty insurer doing business in this State shall limit its exposure to loss, net of collateral and reinsurance, as follows:

A. For municipal obligation bonds, special revenue bonds, and obligations demonstrated to the satisfaction of the Commissioner to be the functional equivalent of municipal obligation bonds or special revenue bonds:

(1) The insured average annual debt service with respect to any one entity and backed by a single revenue source may not exceed 10 percent of the aggregate of the corporation's capital, surplus, and contingency reserve; and

(2) The insured unpaid principal issued by a single entity and backed by a single revenue source may not exceed 75 percent of the aggregate of the corporation's capital, surplus, and contingency reserve;

B. For each issue of asset-backed securities issued by a single entity and for each pool of consumer debt obligations, the lesser of:

(1) Insured average annual debt service; or

(2) Insured unpaid principal, reduced by the extent to which the unpaid principal of the supporting assets exceeds the insured unpaid principal, divided by nine, provided that:

(a) The insured unpaid principal, reduced by the extent to which the unpaid principal of the supporting assets exceeds the insured unpaid principal, divided by nine, does not exceed 10 percent of the aggregate of the corporation's capital, surplus, and contingency reserve;

(b) No asset in the pool supporting the asset-backed securities exceeds the single risk limits prescribed in §E of this regulation, if directly guaranteed; and

(c) If the issuer of the insured asset-backed securities is a special purpose corporation, trust, or other entity and the issuer has indebtedness outstanding with respect to any other pool of assets, either the other indebtedness shall be entitled to the benefits of a financial guaranty policy of the same insurer, or the other indebtedness:

(i) Shall be fully subordinated to the insured obligation, with respect to, or be non-recourse with respect to, the pool of assets that supports the insured obligation;

(ii) Shall be non-recourse to the issuer other than with respect to the asset pool securing the other indebtedness and excess proceeds; and

(iii) May not constitute a claim against the issuer to the extent that the asset pool securing the other indebtedness or excess proceeds is insufficient to pay the other indebtedness;

C. For obligations issued by a single entity and secured by commercial real estate, and not meeting the definition of asset-backed securities, the insured unpaid principal less 50 percent of the appraised value of the underlying real estate may not exceed 10 percent of the aggregate of the insurer's surplus to policyholders and contingency reserve;

D. For utility first mortgage obligations, the insured average annual debt service may not exceed 10 percent of the aggregate of the corporation's capital, surplus, and contingency reserve; and

E. For all other policies providing financial guaranty insurance with respect to obligations issued by a single entity and backed by a single revenue source, the insured unpaid principal may not exceed 10 percent of the aggregate of the financial guaranty insurer's capital, surplus, and contingency reserve.

Cross References

31.05.10.01B(7)(b)

31.05.10.07C(2)

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.07 Insurers That Exceed Limitations.

A. Submission of Written Plan. Except as provided in §C of this regulation, if a financial guaranty insurer at any time exceeds any limitation prescribed by Regulation .03 or .04—.06 of this chapter, the financial guaranty insurer shall, within 30 days after the limitation is exceeded, submit a written plan to the Commissioner detailing the steps that the financial guaranty insurer will take or has taken to reduce its exposure to loss to not more than the permitted amounts.

B. Notice and Hearing; Order. If, after notice and hearing, the Commissioner determines that a financial guaranty insurer has exceeded any limitation prescribed by Regulation .03 or .04—.06 of this chapter, the Commissioner may order the financial guaranty insurer to:

(1) Cease transacting any new financial guaranty insurance business until the financial guaranty insurer's exposure to loss no longer exceeds the limitations; or

(2) Limit its writing to investment grade obligations until such time as it is in compliance with the limitations.

C. Financial Guaranty Insurance Outstanding Before Effective Date of Chapter.

(1) Except as provided in §C(2) of this regulation, a financial guaranty insurer shall be in compliance with Regulations .03 and .04—.06 of this chapter by December 31, 2006.

(2) A financial guaranty insurer may not be deemed in violation of any limitation prescribed by Regulation .06 of this chapter with respect to a financial guaranty insurance policy that was outstanding before the effective date of this chapter, if the financial guaranty insurer was in compliance with the applicable single risk limit in effect in this State at the time that the financial guaranty insurance policy was issued.

(3) Failure to comply with Regulations .03 or .04—.06 of this chapter by the date established in §C(1) of this regulation shall result in a financial guaranty insurer being subject to the actions prescribed in §B of this regulation.

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

COMAR 31.05.10.08 Collateral.

Collateral shall be:

A. Deposited with the financial guaranty insurer;

B. Held in trust by a trustee or custodian acceptable to the Commissioner for the benefit of the financial guaranty insurer; or

C. Held in trust pursuant to the bond indenture or other trust arrangement for the benefit of security holders in the form of funds for the payment of insured obligations, sinking funds, or other reserves that may be used to pay the insured obligations and trustee and other administrative fees on a first priority basis established and continually maintained pursuant to the bond indenture or other trust arrangement by a trustee acceptable to the Commissioner.

History

Administrative History: Effective date: September 15, 2003 (30:18 Md. R. 1260)
Administrative History: Regulation .01B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); adopted permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .06B amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Administrative History: Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)
Authority: Insurance Article, §5-1005, Annotated Code of Maryland

31.05.11 Annual Financial Reporting

COMAR 31.05.11.01 Purpose and Scope.

A. Purpose. The purpose of this chapter is to improve the Maryland Insurance Administration's surveillance of the financial condition of insurers by requiring:

(1) An annual audit of financial statements reporting the financial position and the results of operations of insurers by independent certified public accountants;

(2) Communication of Internal Control Related Matters Noted in an Audit; and

(3) Management's Report on Internal Control over Financial Reporting.

B. Scope. Except as provided in §C of this regulation, an insurer is subject to this chapter.

C. Exemptions.

(1) Insurers having direct premiums written in this State of less than $1,000,000 in any calendar year and less than 1,000 policyholders or certificate holders of direct written policies nationwide at the end of the calendar year are exempt from this chapter for the year, unless the Commissioner makes a specific finding that compliance is necessary for the Commissioner to carry out statutory responsibilities. Insurers having assumed premiums pursuant to contracts or treaties of reinsurance of $1,000,000 or more are not exempt.

(2) Foreign or alien insurers filing the audited financial report in another state, pursuant to that state's requirement for filing of audited financial reports, which has been found by the Commissioner to be substantially similar to the requirements herein, are exempt from Regulations .03—.12 of this chapter if:

(a) A copy of the audited financial report, Communication of Internal Control Related Matters Noted in an Audit, and the Accountant's Letter of Qualifications that are filed with the other state are filed with the Commissioner in accordance with the filing dates specified in Regulations .03, .10, and .11 of this chapter, or Canadian insurers may submit copies of the accountants' reports as filed with the Office of the Superintendent of Financial Institutions, Canada; and

(b) A copy of any Notification of Adverse Financial Condition Report filed with the other state is filed with the Commissioner within the time specified in Regulation .09 of this chapter.

(3) Foreign or alien insurers required to file Management's Report on Internal Control over Financial Reporting in another state are exempt from filing the report in Maryland, provided the other state has substantially similar reporting requirements, and the report is filed with the Commissioner of the other state within the time specified.

D. This chapter does not prohibit, preclude, or in any way limit the Maryland Insurance Commissioner from ordering or conducting or performing examinations of insurers under the rules and regulations of the Maryland Insurance Administration, and the practices and procedures of the Maryland Insurance Administration.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accountant” or “independent certified public accountant” means:

(a) An independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which the accountant is licensed to practice; and

(b) For a Canadian or a British company, a Canadian-chartered or British-chartered accountant.

(2) “Affiliate of”, or person “affiliated with”, a specific person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(3) Audit Committee.

(a) “Audit committee” means a committee, or equivalent body, established by the board of directors of an entity for the purpose of overseeing the:

(i) Accounting and financial reporting processes of an insurer or group of insurers;

(ii) Internal audit function of an insurer or group of insurers; and

(iii) External audits of financial statements of the insurer or group of insurers.

(b) “Audit committee” at the election of the controlling person pursuant to Regulation .13H—J of this chapter, may, for one or more controlled insurers, be deemed to be the audit committee of any entity that controls a group of insurers.

(c) “Audit committee” means the insurer's entire board of directors, if an audit committee is not designated by the insurer.

(4) “Audited financial report” means and includes those items specified in Regulation .04 of this chapter.

(5) “Group of insurers” means those insurers included in the reporting requirements of Insurance Article, §7-601, Annotated Code of Maryland, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting.

(6) “Indemnification” means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives.

(7) “Independent board member” has the same meaning as described in Regulation .13E and F of this chapter.

(8) Insurer.

(a) “Insurer” means an insurer holding a certificate of authority issued by the Commissioner, or authorized to engage in the insurance business in this State, as defined in Insurance Article, §§1-101(v) and 4-101, Annotated Code of Maryland.

(b) “Insurer” includes:

(i) The Maryland Automobile Insurance Fund;

(ii) The Medical Mutual Liability Insurance Society of Maryland;

(iii) Nonprofit health service plans;

(iv) Dental plan organizations;

(v) Health maintenance organizations;

(vi) Managed care organizations; and

(vii) Provider-sponsored organizations.

(9) “Internal audit function” means a person or persons that provide independent, objective, and reasonable assurance designed to add value and improve an organization’s operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management and control and governance processes.

(10) “Internal control over financial reporting” means a process effected by an entity's board of directors, management, and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, that is, those items specified in Regulation .04B(2)—(6) of this chapter, and includes those policies and procedures that:

(a) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

(b) Provide reasonable assurance that:

(i) Transactions are recorded as necessary to permit preparation of the financial statements, that is, those items specified in Regulation .04B(2)—(6) of this chapter; and

(ii) Receipts and expenditures are being made only in accordance with authorizations of management and directors; and

(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements, that is, those items specified in Regulation .04B(2)—(6) of this chapter.

(11) “NAIC” means the National Association of Insurance Commissioners.

(12) “SEC” means the United States Securities and Exchange Commission.

(13) “Section 404” means Section 404 of the Sarbanes-Oxley Act of 2002, and the SEC's rules and regulations promulgated under it.

(14) “Section 404 report” means Management's Report on Internal Control over Financial Reporting as defined by the SEC, and the related attestation report of the independent certified public accountant as described in §B(1) of this regulation.

(15) “SOX compliant entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002:

(a) The preapproval requirements of §201 (§10A(i) of the Securities Exchange Act of 1934);

(b) The audit committee independence requirements of §301 (§10A(m)(3) of the Securities Exchange Act of 1934); and

(16) Workpapers.

(a) “Workpapers” means the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant's audit of the financial statements of an insurer.

(b) “Workpapers” may include the following documents prepared or obtained by the independent certified public accountant in the course of an audit of the financial statements of an insurer and which support the accountant's opinion:

(i) Audit planning documentation;

(ii) Work programs;

(iii) Analyses;

(iv) Memoranda;

(v) Letters of confirmation and representation;

(vi) Abstracts of company documents; and

(vii) Schedules or commentaries.

Cross References

31.05.11.03E

31.05.11.13E

31.05.11.16A

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.03 Filing and Extensions for Filing Audited Financial Reports; Audit Committee Appointment.

A. Insurers shall have an annual audit by an independent certified public accountant, and shall file an audited financial report with the Commissioner for the year ended December 31 immediately preceding, for:

(1) Nonprofit health service plans, on or before March 1 of each year;

(2) Dental plan organizations, on or before April 1 of each year;

(3) Health maintenance organizations, on or before June 1 of each year, or if approved by the Commissioner, within 150 days after the date their fiscal year ends; and

(4) All other insurers, on or before June 1 of each year.

B. Extensions of the filing date may be granted by the Commissioner for up to 30-day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting an extension and determination by the Commissioner of good cause for an extension.

C. The request for extension shall be submitted in writing not less than 10 days prior to the due date in sufficient detail to permit the Commissioner to make an informed decision with respect to the requested extension.

D. If an extension is granted in accordance with the provisions in §§B and C of this regulation, a similar extension of 30 days is granted to the filing of Management's Report on Internal Control over Financial Reporting.

E. An insurer required to file an annual audited financial report pursuant to this chapter shall designate a group of individuals as constituting its audit committee, as defined in Regulation .02B(3) of this chapter.

F. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this chapter at the election of the controlling person.

Cross References

31.05.11.01C(2)

31.05.11.10B

31.05.11.18B

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.04 Contents of Annual Audited Financial Report.

A. The annual audited financial report shall report the financial position of the insurer as of the end of the most recently ended calendar year and the results of its operations, cash flows, and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the department of insurance of the state of domicile.

B. The annual audited financial report shall include the following:

(1) Report of independent certified public accountant;

(2) Balance sheet reporting admitted assets, liabilities, capital, and surplus;

(3) Statement of operations;

(4) Statement of cash flow;

(5) Statement of changes in capital and surplus; and

(6) Notes to financial statements, which shall:

(a) Be those required by the appropriate NAIC Annual Statement Instructions and the NAIC Accounting Practices and Procedures Manual; and

(b) Include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed with the Commissioner, with a written description of the nature of these differences.

C. Form.

(1) Except as provided in §C(2) of this regulation, the financial statements included in the audited financial report shall:

(a) Be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Commissioner; and

(b) Be comparative, presenting the amounts as of December 31 of the most recently ended year, and the amounts as of the immediately preceding December 31.

(2) In the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.

Cross References

31.05.11.02B(4)

31.05.11.08A

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.05 Designation of Independent Certified Public Accountant.

A. An insurer required by this chapter to file an annual audited financial report shall, within 60 days after becoming subject to the requirement:

(1) Register with the Commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this regulation; or

(2) Register the name and address of their retained independent certified public accountant not less than 6 months before the date when the first audited financial report is to be filed if the insurer has not retained an independent certified public accountant on the effective date of this chapter.

B. The insurer shall obtain a letter from the accountant, and file a copy with the Commissioner:

(1) Stating that the accountant is aware of the provisions of the insurance code and the regulations of the insurance department of the state of domicile that relate to accounting and financial matters; and

(2) Affirming that the accountant will express an opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that insurance department, specifying such exceptions as the accountant may believe appropriate.

C. If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall:

(1) Within 5 business days notify the Commissioner of this event;

(2) Furnish the Commissioner with a separate letter within 10 business days of the above notification stating whether in the 24 months preceding the event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him to make reference to the subject matter of the disagreement in connection with his opinion;

(3) In writing, request the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which the accountant does not agree; and

(4) Furnish the responsive letter from the former accountant to the Commissioner together with its own letter.

D. Disagreements.

(1) The disagreements required to be reported under §C(2) of this regulation include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction.

(2) Disagreements contemplated by §C(2) of this regulation are those that occur at the decision-making level, that is, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report.

Cross References

31.05.11.18B

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.06 Qualifications of Independent Certified Public Accountant.

A. The Commissioner may not recognize a person or firm as a qualified independent certified public accountant if the person or firm:

(1) Is not in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or

(2) Has either directly or indirectly entered into an agreement of indemnity or release from liability, collectively referred to as indemnification, with respect to the audit of the insurer.

B. Except as otherwise provided in this chapter, the Commissioner shall recognize an independent certified public accountant as qualified as long as the accountant conforms to the standards of the profession, as contained in:

(1) The Code of Professional Ethics of the AICPA; and

(2) Either:

(a) The rules and regulations, code of ethics, and rules of professional conduct of the Maryland Board of Public Accountancy; or

(b) A similar code.

C. A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under the Insurance Article, Title 9, Annotated Code of Maryland, the mediation or arbitration provisions shall operate at the option of the statutory successor.

D. Lead or Coordinating Audit Partner.

(1) The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than 5 consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of 5 consecutive years.

(2) An insurer may make application to the Commissioner for relief from the rotation requirement in §D(1) of this regulation on the basis of unusual circumstances.

(3) The application for relief from the rotation requirement in §D(1) of this regulation shall be made at least 30 days before the end of the calendar year. The Commissioner may consider the following factors in determining if the relief should be granted:

(a) Number of partners, expertise of the partners, or the number of insurance clients in the currently registered firm;

(b) Premium volume of the insurer; or

(4) The insurer shall file, with its annual statement filing, the approval for relief from §D(1) of this regulation with the states that it is licensed in or doing business in, and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

E. The Commissioner may not recognize as a qualified independent certified public accountant, or accept an annual audited financial report, prepared in whole or in part by, a natural person who:

(1) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§1961—1968, or any dishonest conduct or practices under federal or state law;

(2) Has been found to have violated the insurance laws of Maryland with respect to any previous reports submitted under this regulation;

(3) Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this chapter; or

(4) Has violated any provisions of Business Occupations and Professions Article, Title 2, Annotated Code of Maryland, or any rule of professional conduct established by the State Board of Public Accountancy.

F. Hearing to Determine Qualifications.

(1) The Commissioner may, as provided in Insurance Article, §4-118, Annotated Code of Maryland, hold a hearing to determine whether an independent certified public accountant is qualified.

(2) After considering the evidence presented, the Commissioner may:

(a) Rule that the accountant is not qualified for purposes of expressing an opinion on the financial statements in the annual audited financial report made pursuant to this chapter; and

(b) Require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this chapter.

G. Accountants That Provide Non-Audit Services.

(1) The Commissioner may not recognize as a qualified independent certified public accountant, or accept an annual audited financial report, prepared in whole or in part, by an accountant who provides to an insurer, contemporaneously with the audit, the following non-audit services:

(a) Bookkeeping or other services related to the accounting records or financial statements of the insurer;

(b) Financial information systems design and implementation;

(d) Actuarially oriented advisory services involving the determination of amounts recorded in the financial statements;

(e) Internal audit outsourcing services;

(f) Management functions or human resources;

(g) Broker or dealer, investment adviser, or investment banking services;

(h) Legal services or expert services unrelated to the audit; or

(i) Any other services that the Commissioner determines, by regulation, are impermissible.

(2) The actuarially oriented advisory services under §G(1)(d) of this regulation do not include an accountant assisting an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements.

(3) The actuarially oriented advisory services under §G(1)(d) of this regulation do not include an accountant's actuary issuing an actuarial opinion or certification opinion on an insurer's reserves if the following conditions are met:

(a) Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;

(b) The insurer has competent personnel, or engages a third-party actuary, to estimate the reserves for which management takes responsibility; and

(c) The accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves.

(4) In general, the principles of independence with respect to services provided by the qualified independent certified public accountant are largely predicated on three basic principles, violations of which would impair the accountant's independence. The principles are that accountants cannot function in the role of management, cannot audit their own work, and cannot serve in an advocacy role for the insurer.

H. Exemptions.

(1) Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from §G(1) of this regulation.

(2) The insurer shall file with the Commissioner a written statement discussing the reasons why the insurer should be exempt from these provisions.

(3) If the Commissioner finds, upon review of this statement, that compliance with this chapter would constitute a financial or organizational hardship upon the insurer, an exemption may be granted.

I. A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in §G(1) of this regulation or that do not conflict with §G(2) of this regulation, only if the activity is approved in advance by the audit committee, in accordance with §§J and K of this regulation.

J. All auditing services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee.

K. The preapproval requirement is waived with respect to non-audit services if:

(1) The insurer is a SOX compliant entity, or a direct or indirect wholly owned subsidiary of a SOX compliant entity; or

(2) All of the following conditions are met:

(a) The aggregate amount of all such non-audit services provided to the insurer constitutes not more than 5 percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided;

(b) The services were not recognized by the insurer at the time of the engagement to be non-audit services; and

(c) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.

L. Preapproval.

(1) The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapprovals required by §§J and K of this regulation.

(2) The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.

M. Independent Certified Public Accountant Conflicts.

(1) Section M(2) of this regulation applies only to partners and senior managers involved in the audit.

(2) The Commissioner may not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the 1-year period preceding the date that the most current statutory opinion is due.

(3) An insurer may make application to the Commissioner for relief from the requirement in §M(2) of this regulation, on the basis of unusual circumstances.

(4) The insurer shall file, with its annual statement filing, the approval for relief from §M(2) of this regulation, with the states that it is licensed in, or doing business in, and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

Cross References

31.05.11.11B(6)

31.05.11.17H

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.07 Consolidated or Combined Audits.

A. An insurer may make written application to the Commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies that utilizes a pooling or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves, and the insurer cedes all of its direct and assumed business to the pool.

B. When an insurer makes a written application as allowed by §A of this regulation, a columnar consolidating or combining worksheet shall be filed with the report, as follows:

(1) Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet;

(2) Amounts for each insurer subject to this section shall be stated separately;

(3) Noninsurance operations may be shown on the worksheet on a combined or individual basis;

(4) Explanations of consolidating and eliminating entries shall be included; and

(5) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.08 Scope of Audit and Report of Independent Certified Public Accountant.

A. Financial statements furnished pursuant to Regulation .04 of this chapter shall be examined by the independent certified public accountant. The audit of the insurer's financial statements shall be conducted in accordance with generally accepted auditing standards.

B. The independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit in accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit.

C. To the extent required by AU 319, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to Regulation .16 of this chapter, the independent certified public accountant should consider, as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement, the most recently available report in planning and performing the audit of the statutory financial statements.

D. The independent certified public accountant shall give consideration as he deems necessary to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the NAIC.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.09 Notification of Adverse Financial Condition.

A. The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report, in writing, within 5 business days to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the Commissioner as of the balance sheet date currently under audit, or that the insurer does not meet the minimum capital and surplus requirement of Insurance Article, Annotated Code of Maryland, as of that date.

B. An insurer that has received a report pursuant to §A of this regulation shall forward a copy of the report to the Commissioner within 5 business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the Commissioner.

C. If the independent certified public accountant fails to receive the evidence within the required 5 business day period, the independent certified public accountant shall furnish to the Commissioner a copy of its report within the next 5 business days.

D. An independent certified public accountant is not liable in any manner to any person for any statement made in connection with §A, B, or C of this regulation, if the statement is made in good faith in compliance with those sections.

E. If an accountant, subsequent to the date of the audited financial report filed pursuant to this chapter, becomes aware of facts that might have affected the accountant's report, the Commissioner notes the obligation of the accountant to take such action as prescribed in Volume 1, Section AU 561 of the Professional Standards of the AICPA.

Cross References

31.05.11.01C(2)(b)

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.10 Communication of Internal Control Related Matters Noted in an Audit.

A. In addition to the annual audited financial report, each insurer shall furnish the Commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit.

B. The communication in §A of this regulation, shall be prepared by the accountant within 60 days after the filing of the annual audited financial report, and shall contain a description of any unremediated material weakness, as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement, as of the immediately preceding December 31, so as to coincide with the audited financial report discussed in Regulation .03A of this chapter in the insurer's internal control over financial reporting noted by the accountant during the course of their audit of the financial statements.

C. If no unremediated material weaknesses were noted, the communication from §A shall so state.

D. The insurer shall provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's communication.

Cross References

31.05.11.16B

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.11 Accountant's Letter of Qualifications.

A. The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter as provided in §B of this regulation.

B. The letter shall state:

(1) That the accountant is independent with respect to the insurer, and conforms to the standards of the accountant's profession as contained in:

(a) The Code of Professional Ethics and pronouncements of the AICPA; and

(b) The rules of professional conduct of the Maryland Board of Public Accountancy or similar code;

(2) The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant;

(3) That the accountant understands the annual audited financial report, and the opinion thereon will be filed in compliance with this regulation, and that the Commissioner will be relying on this information in the monitoring and regulation of the financial position of insurers;

(4) That the accountant consents to the requirements of Regulation .12 of this chapter, and that the accountant consents and agrees to make available for review by the Commissioner, or the Commissioner's designee or appointed agent, the workpapers, as defined in Regulation .12 of this chapter;

(5) That the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the AICPA; and

(6) A representation that the accountant is in compliance with the requirements of Regulation .06 of this chapter.

C. Nothing within this chapter may be construed as prohibiting the accountant from utilizing such staff as the accountant deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.12 Definition, Availability, and Maintenance of Independent Certified Public Accountant's Workpapers.

A. An insurer required to file an audited financial report pursuant to this chapter shall require the accountant to make available for review by the Maryland Insurance Administration examiners, all workpapers prepared in the conduct of the accountant's audit, and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the Maryland Insurance Administration, or at any other reasonable place designated by the Commissioner.

B. The insurer shall require that the accountant retain the audit workpapers and communications until the Maryland Insurance Administration has filed a report on examination covering the period of the audit but not longer than 7 years from the date of the audit report.

C. In the conduct of the periodic review described in §A of this regulation, the Maryland Insurance Administration may make and retain photocopies of pertinent audit workpapers.

D. The reviews described in §A of this regulation, shall be considered investigations and all working papers and communications obtained during the course of the investigations shall be afforded the same confidentiality as other examination workpapers generated by the Maryland Insurance Administration.

Cross References

31.05.11.01C(2)

31.05.11.11B(4)

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.13 Requirements for Audit Committees.

A. This regulation does not apply to:

(1) Foreign or alien insurers licensed in Maryland;

(2) An insurer that is a SOX compliant entity; or

(3) A direct or indirect wholly owned subsidiary of a SOX compliant entity.

B. The audit committee shall be directly responsible for the appointment, compensation, and oversight of the work of any accountant, including resolution of disagreements between management and the accountant regarding financial reporting, for the purpose of preparing or issuing the audited financial report or related work pursuant to this regulation.

C. The audit committee of an insurer or group of insurers shall be responsible for:

(1) Overseeing the insurer’s internal audit function; and

(2) Granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by Regulation .14 of this chapter.

D. The accountant shall report directly to the audit committee.

E. A member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to §I of this regulation and Regulation .02B(3) of this chapter.

F. In order to be considered independent for purposes of this regulation, a member of the audit committee may not, other than in the member's capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory, or other compensatory fee from the entity, or be an affiliated person of the entity, or any subsidiary of the entity.

G. If law requires board participation by an otherwise non-independent member, that law shall prevail and the member may participate in the audit committee and be designated as independent for audit committee purposes, unless the member is an officer or employee of the insurer or one of its affiliates.

H. If a member of the audit committee ceases to be independent for reasons outside the member's reasonable control, that person, with notice by the responsible entity to the Commissioner, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or 1 year from the occurrence of the event that caused the member to be no longer independent.

I. To exercise the election of the controlling person to designate the audit committee for purposes of this regulation, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers.

J. Notification of the election of the controlling person shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election may be changed through notice to the Commissioner by the insurer, which shall include a description of the basis for the change.

K. The election of the controlling person to designate the audit committee for purposes of this regulation shall remain in effect for perpetuity, until rescinded.

L. Audit Committee Reports.

(1) The audit committee shall require the accountant that performs for an insurer any audit required by this chapter to timely report to the audit committee in accordance with the requirements of SAS 61, Communication with Audit Committees, or its replacement, including:

(a) All significant accounting policies and material permitted practices;

(b) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and

(c) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.

(2) If an insurer is a member of an insurance holding company system, the reports required by §L(1) of this regulation may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee.

M. The proportion of independent audit committee members shall meet or exceed the following criteria:

(1) Table.

| Prior Calendar Year Direct Written and Assumed Premiums | | | | --- | --- | --- | | $0—$300,000,000 | Over $300,000,000 —500,000,000 | Over $500,000,000 | | No minimum requirements. See also Note A and B. | Majority (50% or more) of members shall be independent. See also Note A and B. | Supermajority of members (75% or more) shall be independent. See also Note A. |

(2) Note A. The Commissioner has authority afforded by State law to require the entity's board to enact improvements to the independence of the audit committee membership if the insurer is in a RBC action level event, meets one or more of the standards of an insurer considered to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.

(3) Note B. All insurers with less than $500,000,000 in prior year direct written and assumed premiums are encouraged to structure their audit committees with at least a supermajority of independent audit committee members.

(4) Note C. Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from non-affiliates for the reporting entities.

N. An insurer with direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000 may make application to the Commissioner for a waiver from the requirements of Regulation .13 of this chapter based upon hardship.

O. The insurer shall file, with its annual statement filing, the approval for relief from Regulation .13 of this chapter with the states that it is licensed in or doing business in and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

Cross References

31.05.11.17I

31.05.11.17J

31.05.11.17K

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.14 Internal Audit Function Requirements.

A. An insurer is exempt from the requirements of this section if:

(1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and

(2) The insurer is a member of a group of insurers and the group has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.

B. Function.

(1) The insurer or group of insurers shall establish an internal audit function providing independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurers’:

(a) Governance;

(b) Risk management; and

(2) The reasonable assurance shall be provided by performing general and specific audits, reviews, and tests and by employing other techniques deemed necessary to:

(a) Protect assets;

(b) Evaluate control effectiveness and efficiency; and

C. Independence.

(1) In order to ensure that internal auditors remain objective, the internal audit function shall be organizationally independent.

(2) The internal audit function may not defer ultimate judgement on audit matters to others and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors.

(3) Organizational independence does not preclude dual-reporting relationships.

D. Reporting.

(1) The head of the internal audit function shall report to the audit committee on:

(a) The periodic audit plan;

(b) Factors that may adversely impact the internal audit function’s independence or effectiveness;

(d) The appropriateness of corrective actions implemented by management as a result of audit findings.

(2) The reporting shall be done regularly, but on no less than an annual basis.

E. Additional Requirements. If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this regulation at the:

(1) Ultimate controlling parent level;

(2) Intermediate holding company level; or

(3) Individual legal entity level.

Cross References

31.05.11.13C(2)

31.05.11.17M

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.15 Conduct of Insurer in Connection with the Preparation of Required Reports and Documents.

A. A director or officer of an insurer may not, directly or indirectly:

(1) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review, or communication required under this chapter; or

(2) Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review, or communication required under this chapter.

B. An officer or director of an insurer, or any other person acting under the direction thereof, may not directly or indirectly take any action to coerce, manipulate, mislead, or fraudulently influence any accountant engaged in the performance of an audit pursuant to this regulation if that person knew or should have known that the action, if successful, could result in rendering the insurer's financial statements materially misleading.

C. For purposes of §B of this regulation, actions that, “if successful, could result in rendering the insurer's financial statements materially misleading” include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead, or fraudulently influence an accountant:

(1) To issue or reissue a report on an insurer's financial statements that is not warranted in the circumstances, due to material violations of statutory accounting principles prescribed by the Commissioner, generally accepted auditing standards, or other professional or regulatory standards;

(2) Not to perform audit, review, or other procedures required by generally accepted auditing standards or other professional standards;

(3) Not to withdraw an issued report; or

(4) Not to communicate matters to an insurer's audit committee.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.16 Management's Report on Internal Control over Financial Reporting.

A. An insurer required to file an audited financial report pursuant to this chapter that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or more shall prepare a report (Management's Report on Internal Control over Financial Reporting) of the insurer's or group of insurers' internal control over financial reporting, as these terms are defined in Regulation .02 of this chapter.

B. The report shall be filed with the Commissioner along with the Communication of Internal Control Related Matters Noted in an Audit described under Regulation .10 of this chapter. Management's Report on Internal Control over Financial Reporting shall be as of the immediately preceding December 31.

C. Notwithstanding the premium threshold in §A of this regulation, the Commissioner may require an insurer to file Management's Report on Internal Control over Financial Reporting if the insurer is in any risk-based capital (RBC) level event, or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in Insurance Article, Title 9, Annotated Code of Maryland.

D. Alternative Filing.

(1) An insurer or a group of insurers that is directly subject to Section 404, part of a holding company system whose parent is directly subject to Section 404, not directly subject to Section 404 but is a SOX compliant entity, or a member of a holding company system whose parent is not directly subject to Section 404 but is a SOX compliant entity, may file its or its parent's Section 404 report and an addendum in satisfaction of this regulation if the internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements (those items included in Regulation .04B(2)—(6) of this chapter) were included in the scope of the Section 404 report.

(2) The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer's or group of insurers' audited statutory financial statements (those items included in Regulation .04B(2)—(6) of this chapter) excluded from the Section 404 report.

(3) If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may either file:

(a) A Management's Report on Internal Control over Financial Reporting; or

(b) The Section 404 report and a Management's Report on Internal Control over Financial Reporting for those internal controls that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements not covered by the Section 404 report.

E. Management's Report on Internal Control over Financial Reporting shall include:

(1) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;

(2) A statement that management has established internal control over financial reporting and an assertion, to the best of management's knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;

(3) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;

(4) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;

(5) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of the immediately preceding December 31;

(6) A statement regarding the inherent limitations of internal control systems; and

(7) Signatures of the chief executive officer and the chief financial officer, or individuals with equivalent position and title.

F. With regard to §E(5) of this regulation, management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting.

G. Management shall document and make available upon financial condition examination the basis upon which its assertions, required in §E of this regulation, are made.

H. Management may base its assertions, in part, upon its review, monitoring, and testing of internal controls undertaken in the normal course of its activities.

I. Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation.

J. Management's Report on Internal Control over Financial Reporting, required by §§A and B of this regulation, and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the Maryland Insurance Administration.

Cross References

31.05.11.08C

31.05.11.17L(1)

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.17 Exemptions and Effective Dates.

A. Upon written application of any insurer, the Commissioner may grant an exemption from compliance with provisions of this chapter if:

(1) The exemption is not prohibited by statute; and

(2) The Commissioner finds, upon review of the application, that compliance with this chapter would constitute a financial or organizational hardship upon the insurer.

B. The Commissioner may grant exemption at any time and from time to time for a specified period or periods.

C. The insurer may request in writing a hearing on its application for an exemption within 10 days from a denial of an insurer's written request for an exemption from this chapter.

D. The hearing requested in §C of this regulation, shall be held in accordance with COMAR 31.02.01.

E. Domestic insurers retaining a certified public accountant on the effective date of this chapter who qualify as independent shall comply with this chapter for the year ending December 31, 2010, and each year thereafter, unless the Commissioner permits otherwise:

F. Domestic insurers not retaining a certified public accountant on the effective date of this chapter who qualifies as independent shall meet the following schedule for compliance unless the Commissioner permits otherwise.

(1) As of December 31, 2010, file with the Commissioner an audited financial report; and

(2) For the year ending December 31, 2010, and each year thereafter, file with the Commissioner all reports and communication required by this regulation.

G. Foreign insurers shall comply with this regulation for the year ending December 31, 2010, and each year thereafter, unless the Commissioner permits otherwise.

H. The requirements of Regulation .06D of this chapter shall become effective July 1, 2010, and shall be in effect for audits of the year beginning January 1, 2010, and thereafter.

I. The requirements of Regulation .13 of this chapter are to be in effect January 1, 2010.

J. An insurer or group of insurers that is not required pursuant to Regulation .13 of this chapter to have independent audit committee members or only a majority of independent audit committee members, as opposed to a supermajority, because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium, shall have 1 year following the year the threshold is exceeded, but not earlier than January 1, 2010, to comply with the independence requirements.

K. An insurer that becomes subject to one of the independence requirements of Regulation .13 of this chapter as a result of a business combination shall have 1 calendar year following the date of acquisition or combination to comply with the independence requirements.

L. Reporting Requirements.

(1) The requirements of Regulation .16 of this chapter are effective beginning with the reporting period ending December 31, 2010, and each year thereafter.

(2) An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements, shall have 2 years following the year the threshold is exceeded (but not earlier than December 31, 2010) to file a report.

(3) An insurer acquired in a business combination shall have 2 calendar years following the date of acquisition or combination to comply with the reporting requirements.

M. The requirements of Regulation .14 of this chapter are effective as of January 1, 2019. If an insurer or group of insurers that are exempt from Regulation .14 of this chapter no longer qualifies for that exemption, it shall have one year after the year the threshold is exceeded to comply with the requirements of this chapter.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

COMAR 31.05.11.18 Canadian and British Companies.

A. In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their supervision authority duly audited by an independent chartered accountant.

B. For such insurers, the letter required in Regulation .05B of this chapter shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the Commissioner pursuant to Regulation .03 of this chapter, and shall affirm that the opinion expressed is in conformity with those requirements.

History

Administrative History: Effective date: August 10, 2009 (36:16 Md. R. 1252)
Administrative History: Regulation .02B amended effective February 27, 2017 (44:4 Md. R. 255)
Administrative History: ——————
Administrative History: Chapter revised effective December 6, 2018 (45:24 Md. R. 1163)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 4-116, 14-118, 14-121, 14-413, 15-605, 24-211, and 24-304, Annotated Code of Maryland

31.05.12 Property and Casualty Actuarial Opinion

COMAR 31.05.12.01 Scope.

A. This chapter applies to property and casualty insurance companies:

(1) Domiciled in this State; or

(2) Authorized to do business in this State.

B. Property and casualty insurance companies include:

(1) The Maryland Automobile Insurance Fund; and

(2) The Medical Mutual Liability Insurance Society of Maryland.

History

Administrative History: Effective date: January 1, 2010 (36:24 Md. R. 1860)
Administrative History: Regulation .01B amended effective February 27, 2017 (44:4 Md. R. 255)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 2-209, and 4-116; State Government Article, Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.05.12.02 Actuarial Opinion of Reserves and Supporting Documentation.

A. A property and casualty insurance company doing business in this State, unless otherwise exempted by the company's domiciliary Commissioner, shall annually submit the opinion of the company's appointed actuary entitled “Statement of Actuarial Opinion”.

B. The Statement of Actuarial Opinion required by §A of this regulation shall be filed in accordance with the appropriate National Association of Insurance Commissioners' (NAIC) Property and Casualty Annual Statement Instructions.

C. Actuarial Opinion Summary.

(1) A property and casualty insurance company domiciled in this State that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the company's Appointed Actuary.

(2) The Actuarial Opinion Summary required by §C(1) of this regulation, shall be filed in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions, and shall be considered as a document supporting the Statement of Actuarial Opinion required in §A of this regulation.

(3) A property and casualty insurance company licensed but not domiciled in this State shall provide the Actuarial Opinion Summary upon request of the Commissioner.

D. Actuarial Report and Workpapers.

(1) An Actuarial Report and underlying workpapers as required by the appropriate NAIC Property and Casualty Annual Statement Instructions shall be prepared by the appointed actuary to support each Statement of Actuarial Opinion.

(2) The Commissioner may engage a qualified actuary at the expense of the property and casualty insurance company to review the Statement of Actuarial Opinion and the basis for the opinion, and prepare the supporting Actuarial Report or workpapers underlying the Actuarial Report if:

(a) The property and casualty insurance company fails to provide a supporting Actuarial Report or workpapers underlying the Actuarial Report at the request of the Commissioner; or

(b) The Commissioner determines that the supporting Actuarial Report or workpapers underlying the Actuarial Report provided by the property and casualty insurance company is otherwise unacceptable to the Commissioner.

Cross References

31.05.12.03B

History

Administrative History: Effective date: January 1, 2010 (36:24 Md. R. 1860)
Administrative History: Regulation .01B amended effective February 27, 2017 (44:4 Md. R. 255)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 2-209, and 4-116; State Government Article, Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.05.12.03 Confidentiality.

A. The Statement of Actuarial Opinion shall be provided with the Annual Statement in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions, and shall be treated as a public document.

B. Documents, materials, or other information in the possession or control of the Maryland Insurance Administration that are considered an Actuarial Report, workpapers underlying the Actuarial Report, or an Actuarial Opinion Summary provided pursuant to Regulation .02 of this chapter, and any other material provided by the property and casualty insurance company to the Commissioner in connection with the Actuarial Report, workpapers underlying the Actuarial Report, or Actuarial Opinion Summary, shall be considered to have been generated pursuant to an analysis or examination conducted under Insurance Article, §2-205, Annotated Code of Maryland, and shall be confidential and privileged pursuant to Insurance Article, §2-209, Annotated Code of Maryland.

C. Documents, materials, or other information in the possession or control of the Maryland Insurance Administration pursuant to §B this regulation, and any other material provided by the company to the Commissioner in connection with the Actuarial Report, workpapers underlying the Actuarial Report, or Actuarial Opinion Summary are not subject to:

(1) Disclosure under Maryland's Public Information Act pursuant to State Government Article, Title 10, Subtitle 6, Annotated Code of Maryland;

(2) Subpoena; and

(3) Discovery or admissible in evidence in any private civil action.

D. The provisions of §§B and C of this regulation may not be construed to limit the Commissioner's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD) so long as the material is required for the purpose of professional disciplinary proceedings, and the ABCD establishes procedures satisfactory to the Commissioner for preserving the confidentiality of the documents.

E. The provisions of §§B and C of this regulation may not be construed to limit the Commissioner's authority to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the Commissioner's official duties.

F. The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner may not be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to this regulation.

G. In order to assist in the performance of the Commissioner's duties, the Commissioner may:

(1) Share documents, materials, or other information, including the confidential and privileged documents, materials, or other information subject to this regulation with other state, federal, and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information, and has the legal authority to maintain confidentiality;

(2) Receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and

(3) Enter into agreements governing sharing and use of information consistent with this chapter.

H. As a result of disclosure to the Commissioner or of sharing by the Commissioner of documents, materials, or other information under this regulation, no waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information occurs.

I. All documents, materials, or other information that are considered an Actuarial Report, workpapers underlying the Actuarial Report, or an Actuarial Opinion Summary provided to the Commissioner by a property and casualty insurance company, and any other material provided by a company to the Commissioner in connection with the Actuarial Report, workpapers underlying the Actuarial Report or Actuarial Opinion Summary, shall be marked “Confidential”.

History

Administrative History: Effective date: January 1, 2010 (36:24 Md. R. 1860)
Administrative History: Regulation .01B amended effective February 27, 2017 (44:4 Md. R. 255)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 2-209, and 4-116; State Government Article, Title 10, Subtitle 6; Annotated Code of Maryland

COMAR 31.05.12.04 Effective Date.

This Act shall take effect January 1, 2010.

History

Administrative History: Effective date: January 1, 2010 (36:24 Md. R. 1860)
Administrative History: Regulation .01B amended effective February 27, 2017 (44:4 Md. R. 255)
Authority: Insurance Article, §§2-109(a)(1), 2-205, 2-209, and 4-116; State Government Article, Title 10, Subtitle 6; Annotated Code of Maryland

31.06.01 Allocation and Taxation of Premiums

COMAR 31.06.01.01 Authority and Purpose.

A. Pursuant to the authority contained in Insurance Article, Title 6, Subtitle 1, Annotated Code of Maryland, the State Insurance Commissioner prescribes by this chapter the methods of allocating the gross direct premium for business transacted by insurers.

B. The purpose of this chapter is to establish a uniform method for determining how premiums are to be allocated for premium tax purposes, and to make clear what that method is.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 effective December 1, 1969
Administrative History: Regulation .01A amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .04 effective August 1, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.12 to COMAR 31.06.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 6-102—6-104, Annotated Code of Maryland

COMAR 31.06.01.02 Method.

Beginning with the annual statement for the calendar year 1970, to be filed on or before March 1, 1971, each insurer shall allocate its premiums in accordance with the following:

A. Property and Casualty.

| Line of Business | Jurisdiction Charged | | --- | --- | | Fire | Location of risk | | Extended Coverage | Location of risk | | Other Allied Lines | Location of risk | | Homeowners Multiple Peril | Location of risk | | Commercial Multiple Peril | Location of risk | | Earthquake | Location of risk | | Growing Crops | Location of risk | | Wet Marine | Jurisdiction in which contract of insurance is negotiated and placed, except builders' risks to jurisdiction in which risk is located. | | Inland Marine | Principal address of policy holder | | Group Accident & Health, Including Credit | Groups under 500 employee/member/debtor lives, jurisdiction in which the largest number of lives are located according to the records of the insurer. Groups of 500 or more not all in one jurisdiction, by ratio of lives in each jurisdiction to total lives under policy. | | Other Accident & Health | Address to which premium notice is sent | | Workmen's Compensation | Location of insured's operation | | Liability other than Auto (B.I.) | Location of risk or operation | | Liability other than Auto (P.D.) | Location of risk or operation | | Auto Liability (B.I.) | Location of principal garage | | Auto Liability (P.D.) | Location of principal garage | | Auto Physical Damage | Location of principal garage | | Aircraft Physical Damage | Location of principal hangar | | Fidelity: | | | Bankers Blanket Bond | Location of employer | | Mercantile Blanket Bond | Location of employer | | Employees Individual Bonds | Location of employer | | Employees Schedule Bonds | Location of employer | | U.S. Government Employee Bonds | Location of employer | | Public Official Bond | Location of insured | | Fraud Bonds | Location of insured | | Forgery Bonds | Location of insured | | Merchants Protective Bonds | Location of insured | | Surety: | | | Depository Bonds | Location of principal | | Judicial Bonds | Location of court | | Court Bonds | Location of court | | License Bonds | Location of obligee | | Construction Bonds | Location of work | | Supply Bonds | Location of principal | | Public Official | Location of principal's employment | | Indemnity & Miscellaneous Bonds | Location of principal | | Credit Insurance, Indemnity | Principal office of the insured | | Mortgage Guaranty | Location of mortgaged property | | Glass | Location of risk | | Burglary and Theft | Location of risk | | Boiler and Machinery | Location of risk |

B. Life.

| Classification | Jurisdiction Charged | | --- | --- | | Ordinary Life, Including Credit | Address to which the premium notice is sent | | Industrial Life and Monthly Debit Ordinary | Location of debit(when debit includes two or more jurisdictions, apply ratio of amount in force in each jurisdiction to total debit) | | Single Premiums | Address of insured's residence | | Group Life, Including Credit | Groups under 500 employee/member/debtor lives, jurisdiction in which the largest number of lives are located according to the records of the insurer. | | | Groups of 500 or more not all in one jurisdiction, by ratio of lives in each jurisdiction to total lives under policy. |

C. Accident and Health.

| Classification | Jurisdiction Charged | | --- | --- | | Individual, Including Credit | Address to which premium notice is sent | | Industrial and Monthly Debit | Location of debit (when debit includes two or more jurisdictions, apply ratio of amounts in force in each jurisdiction to total debit) | | Group, Including Credit | Groups under 500 employee/member/debtor lives, jurisdiction in which the largest number of lives are located according to the records of the insurer. | | | Groups of 500 or more not all in one jurisdiction, by ratio of lives in each jurisdiction to total lives under policy. |

D. Annuity Allocations. Insofar as annuity considerations are taxable, they shall be allocated by the same method as that adopted for life insurance premiums.

E. Title Allocations. Title insurance premiums are to be allocated to location of risk.

F. Federal Areas Allocations. Business done at Army, Navy, or Air Force bases, and other similar federal installations, shall be allocated to the jurisdiction of the insured's residence, as listed on the application.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 effective December 1, 1969
Administrative History: Regulation .01A amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .04 effective August 1, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.12 to COMAR 31.06.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 6-102—6-104, Annotated Code of Maryland

COMAR 31.06.01.03 Waiver By Commissioner.

The method of allocation of gross direct premiums set forth above may be altered or waived in whole or in part by the Commissioner upon application by any insurer and a finding by the Commissioner that the proposed method of allocation justly and fairly determines the portion of the premiums derived from, or reasonably attributable to, the insurer's business in this State.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 effective December 1, 1969
Administrative History: Regulation .01A amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .04 effective August 1, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.12 to COMAR 31.06.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 6-102—6-104, Annotated Code of Maryland

COMAR 31.06.01.04 Taxes on Premiums Received.

A. Authority. This regulation is deemed necessary as an aid to effectuation of Insurance Article, §6-101, Annotated Code of Maryland.

B. Applicability. This regulation applies to all domestic insurers.

C. Taxes on Premiums Received by Domestic Companies Which Are Not Taxed by Another State. In determining the amount of direct premiums taxable in this State, premiums written, procured, or received in this State shall be deemed written on property or risks located or resident in this State, except such premiums as are properly allocated or proportioned and reported as taxable premiums of any other state or states.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 effective December 1, 1969
Administrative History: Regulation .01A amended effective October 23, 1995 (22:21 Md. R. 1615)
Administrative History: Regulation .04 effective August 1, 1970
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.12 to COMAR 31.06.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 6-102—6-104, Annotated Code of Maryland

31.06.02 Retaliatory Tax

COMAR 31.06.02.01 Premium Tax Report.

Beginning with the return for the calendar year 1967, to be filed on or before March 15, 1968, each foreign and alien insurer licensed to do business in Maryland shall prepare, as part of the annual premium tax report, an analysis in the aggregate of the applicable taxes, licenses, and other fees payable by a Maryland insurer transacting the same lines of business to any agency or department of the foreign or alien insurer’s state of domicile. An analysis, in the aggregate, shall also be prepared of all the applicable taxes, licenses, and other fees payable by the foreign or alien insurer to any agency or department of Maryland. On the basis of these analyses, the company shall compute the retaliatory tax and include the payment of the total due if any in its remittance for premium taxes, payable to the Maryland Insurance Administration on or before March 15th in each calendar year, the time fixed by statute for filing the premium tax report. A composite tax form will be made available to all affected insurers.

History

Administrative History: Effective date: April 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01—.03 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.13 to COMAR 31.06.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective August 15, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02 amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §2-109 and Title 6, Subtitle 3, Annotated Code of Maryland

COMAR 31.06.02.02 Audit.

The Maryland Insurance Administration shall perform an audit of the retaliatory tax with its audit of the annual premium tax report and in addition shall compute and bill for any additional retaliatory tax due from companies domiciled in a state where by statute or ordinance taxes, licenses, or fees are payable to political subdivisions of that state. If the amount of retaliatory tax computed by the Maryland Insurance Administration is greater than the amount shown on the report, the excess shall be assessed by the Maryland Insurance Administration and a notice of the assessment shall be mailed to the insurance company filing the report. The assessment shall be made within 3 years from the date the report was due, except in the case of failure to file a report or of a fraudulent report, in which case the excess may be assessed at any time.

History

Administrative History: Effective date: April 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01—.03 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.13 to COMAR 31.06.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective August 15, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02 amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §2-109 and Title 6, Subtitle 3, Annotated Code of Maryland

COMAR 31.06.02.03 Credit to Calendar Year.

For the purpose of computing the obligations imposed by Maryland on foreign and alien insurers, payments made to the Unsatisfied Claim and Judgment Fund, the Maryland Automobile Insurance Fund, and any other Maryland special purpose fund which comes within the provisions of the retaliatory tax statute, shall be credited to the calendar year in which the payments were actually made, regardless of the premium payment year on which assessment is based.

History

Administrative History: Effective date: April 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01—.03 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.13 to COMAR 31.06.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective August 15, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02 amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §2-109 and Title 6, Subtitle 3, Annotated Code of Maryland

COMAR 31.06.02.04 Domicile.

For the purposes of this chapter, the domicile of an insurer formed under the Laws of Canada or a province of Canada shall be deemed to be that of the province in which its head office is situated. All other alien insurers shall be deemed to be domiciled in that state in which is located its principal place of business in the United States.

History

Administrative History: Effective date: April 1, 1967
Administrative History: Amended effective May 1, 1968
Administrative History: Regulations .01—.03 amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.13 to COMAR 31.06.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective August 15, 2016 (43:16 Md. R. 901)
Administrative History: Regulation .02 amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §2-109 and Title 6, Subtitle 3, Annotated Code of Maryland

31.06.03 Risk Retention Groups and Purchasing Groups—Fees

COMAR 31.06.03.01 Purpose.

This chapter is promulgated to aid in the effectuation of Insurance Article, Title 25, Subtitle 1, Annotated Code of Maryland, and establishes reasonable fees to defray the costs incurred by the Insurance Administration in carrying out these requirements.

History

Administrative History: Effective date: February 6, 1989 (16:2 Md. R. 158)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.78 to COMAR 31.06.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 25-102, 25-103, and 25-106(c), Annotated Code of Maryland

COMAR 31.06.03.02 Applicability.

This chapter shall apply to all:

A. Risk retention groups seeking to be chartered in this State;

B. Risk retention groups chartered in a state other than this State and seeking to do business in this State; and

C. Purchasing groups which intend to do business in this State.

History

Administrative History: Effective date: February 6, 1989 (16:2 Md. R. 158)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.78 to COMAR 31.06.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 25-102, 25-103, and 25-106(c), Annotated Code of Maryland

COMAR 31.06.03.03 Registration Fees.

A. Domestic risk retention groups shall pay the following nonrefundable fees to the Commissioner:

(1) Submission of plan of operation or feasibility study—$50;

(2) Certificate of authority—$200;

(3) Filing annual statement—$25;

(4) Annual continuation of certificate of authority—$25.

B. Foreign risk retention groups shall pay the following nonrefundable fees to the Commissioner:

(1) Submission of plan of operation or feasibility study—$50;

(2) Filing annual statement—$25.

C. Purchasing groups shall pay to the Commissioner a nonrefundable registration fee of $100 upon submission of intent to do business in Maryland.

History

Administrative History: Effective date: February 6, 1989 (16:2 Md. R. 158)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.78 to COMAR 31.06.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 25-102, 25-103, and 25-106(c), Annotated Code of Maryland

31.06.04 Premium Tax — Required Filings, Payments, Penalties, and Interest

COMAR 31.06.04.01 Scope.

This chapter applies to any person who is subject to the taxation of premiums in the State under Insurance Article, §§6-101 and 6-102.1, Annotated Code of Maryland.

History

Administrative History: Effective date: September 17, 2001 (28:18 Md. R. 1622)
Administrative History: Regulation .01 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .02A amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .03 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .04A amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §§2-109, 6-101—6-103, and 6-106—6-109, Annotated Code of Maryland

COMAR 31.06.04.02 Declaration of Estimated Tax and Quarterly Payments.

A. Each taxpayer subject to premium tax under Insurance Article, §6-101, Annotated Code of Maryland, shall declare an estimated annual tax if the taxpayer’s total tax for the current tax year is reasonably expected to exceed $1,000.

B. The declaration of estimated annual tax shall be:

(1) Filed with the Insurance Administration, on a form or in a manner approved by the Commissioner, on or before April 15 of the tax year; and

(2) A reasonable estimate of the expected annual tax liability for that year.

C. The taxpayer shall pay to the Insurance Administration at least 25 percent of the estimated annual tax liability at the time the declaration of annual tax is filed, on or before April 15 of the tax year.

D. Thereafter, the taxpayer shall file a quarterly payment report with the Insurance Administration, on a form or in a manner approved by the Commissioner, and pay to the Insurance Administration at least 25 percent of the estimated annual tax each quarter, on or before June 15, September 15, and December 15 of the tax year.

E. A reasonable estimate of the annual tax shall be either:

(1) 100 percent of premium tax liability for the prior year as shown on the prior year's Final Report on the line stating “Premium Tax Due — Entire Calendar Year”; or

(2) 90 percent of the amount of the current year tax liability.

Cross References

31.06.04.03D(1)(a)

31.06.04.04A(1)(a)

31.06.04.04A(1)(b)

History

Administrative History: Effective date: September 17, 2001 (28:18 Md. R. 1622)
Administrative History: Regulation .01 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .02A amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .03 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .04A amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §§2-109, 6-101—6-103, and 6-106—6-109, Annotated Code of Maryland

COMAR 31.06.04.03 Final Report.

A. On or before March 15 following the end of the tax year, a person subject to premium tax shall file a Final Report with the Insurance Administration on a form or in a manner approved by the Commissioner.

B. The Final Report of premium taxes required under Insurance Article, §6-107, Annotated Code of Maryland, shall contain:

(1) Either:

(a) A report of the new and renewal gross direct premiums less returned premiums written by the taxpayer during the preceding calendar year, including, for Maryland domiciled taxpayers, premiums written in a state where the taxpayer is not licensed; or

(b) If the taxpayer issues perpetual policies of fire insurance, a report of the average amount of deposits held by the taxpayer during the preceding calendar year in connection with perpetual policies of fire insurance issued on property in the State and in force during any part of that year;

(2) A calculation of retaliatory tax owed to Maryland under COMAR 31.06.02;

(3) A calculation of any applicable credits against premium tax allowed by Insurance Article, Title 6, Annotated Code of Maryland; and

(4) Credit, if any, for overpayment of premium tax paid in prior tax years.

C. On or before March 15 following the end of the tax year, the Assessment Form shall be filed to report the assessment amount pursuant to Insurance Article, §6-102.1, Annotated Code of Maryland, and shall contain:

(1) A report of the gross amount of all health and accident & health insurance premiums written during the preceding calendar year;

(2) An itemization of allowed excluded premiums during the preceding calendar year;

(3) A calculation of the assessment; and

(4) Any other information or documentation required by the Commissioner.

D. Remittance.

(1) The taxpayer shall remit the following with the Final Report required by §B of this regulation:

(a) The total amount of premium tax due, after crediting the amount of taxes paid under Regulation .02 of this chapter; and

(b) Any retaliatory tax due under COMAR 31.06.02.

(2) The amount remitted under §C(1) of this regulation shall be the net amount due after any applicable credits are applied against the premium tax that are allowed by Insurance Article, Title 6, Annotated Code of Maryland.

(3) Taxpayers shall maintain in their files, and shall make available to the Commissioner on request, supporting documentation for:

(a) The retaliatory tax due on the Final Report, consisting of the applicable taxes, licenses, and other fees that are part of the computation of the retaliatory tax due; and

(b) Any credits against premium tax taken by the taxpayer that are allowed under Insurance Article, Title 6, Annotated Code of Maryland.

(4) An entity subject to assessment pursuant to Insurance Article, §6-102.1, Annotated Code of Maryland, shall remit the assessment amount due with the Assessment Form as required by §C of this regulation.

(5) The payment of premium taxes as required by §D(1) of this regulation and the payment of the assessment as required by §D(4) of this regulation shall be remitted separately and not combined in one remittance.

(6) A managed care organization may remit quarterly payments of the assessment required by Insurance Article, §6-102.1, Annotated Code of Maryland, equal to at least 25 percent of the assessment due on or before March 15, June 15, September 15, and December 15.

Cross References

31.06.04.04A(2)

History

Administrative History: Effective date: September 17, 2001 (28:18 Md. R. 1622)
Administrative History: Regulation .01 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .02A amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .03 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .04A amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §§2-109, 6-101—6-103, and 6-106—6-109, Annotated Code of Maryland

COMAR 31.06.04.04 Interest and Penalties.

A. Each taxpayer is subject to the assessment of a penalty of 5 percent of the amount not paid when due and interest at the rate specified in Tax-General Article, §13-604(b)(1), Annotated Code of Maryland, from the date the tax was due until payment is made to the Commissioner when the taxpayer fails to remit or remits less than:

(1) The amount due with:

(a) The declaration of estimated annual tax in accordance with Regulation .02C of this chapter; or

(b) Each quarterly payment report in accordance with Regulation .02D of this chapter; or

(2) The total premium tax due to be paid with the Final Report in accordance with Regulation .03 of this chapter.

B. Notwithstanding §A(1) of this regulation, the Commissioner may not assess a penalty or interest under §A(1) if:

(1) The taxpayer's declaration of estimated annual tax is at least 90 percent of the premium liability for the current year or 100 percent of the premium tax liability due for the prior tax year as shown on the Final Report on the line stating “Premium Tax Due—Entire Calendar Year”; and

(2) The taxpayer pays at least 25 percent of the estimated annual tax on or before April 15, June 15, September 15, and December 15 of the tax year.

C. Interest will be assessed at the rate of 6 percent per year from the due date of the Final Report until payment is made to the Commissioner if, following an audit by the Commissioner, an additional amount of premium tax is found to be due.

D. Penalties for Failure to Pay Retaliatory Tax.

(1) The Commissioner shall assess a penalty of 5 percent of the amount not paid when due and interest at the rate specified in Tax-General Article, §13-604(b)(1), Annotated Code of Maryland, if the taxpayer fails to pay the retaliatory tax under COMAR 31.06.02 within 30 days after the Commissioner issues a notice to the taxpayer specifying the amount due.

(2) The penalty and interest imposed under §D(1) of this regulation shall be from the 31st day after the Commissioner issues the notice until the tax is paid to the Commissioner.

E. Notwithstanding §A, B, C, or D of this regulation, the Commissioner may not impose a penalty or interest if the total amount of the interest and penalty is less than $20.

History

Administrative History: Effective date: September 17, 2001 (28:18 Md. R. 1622)
Administrative History: Regulation .01 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .02A amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .03 amended effective January 13, 2020 (47:1 Md. R. 19)
Administrative History: Regulation .04A amended effective August 15, 2016 (43:16 Md. R. 901)
Authority: Insurance Article, §§2-109, 6-101—6-103, and 6-106—6-109, Annotated Code of Maryland

31.07.01 Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings

COMAR 31.07.01.01 Purpose.

Pursuant to Insurance Article, §§11-206, 11-307, 11-329, and 11-330, Annotated Code of Maryland, rate filings made by individual insurers may incorporate the experience of rating organizations. The experience includes statistical data, prospective loss costs, and supporting information, as defined in this chapter. The purpose of this chapter is to establish what additional information shall be provided to the Commissioner by insurers which incorporate, in whole or in part, filings made by rating organizations.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.02 Scope.

This chapter applies to rate filings made pursuant to Insurance Article, Title 11, Subtitle 2 and Subtitle 3, Annotated Code of Maryland.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Expenses” means that portion of a rate attributable to acquisition, field supervision, collection and general expenses, taxes, licenses, and fees.

(2) “Prospective loss cost” means that portion of a rate exclusive of profit or expenses, other than loss adjustment expenses, which is based on historical aggregate losses and loss adjustment expenses adjusted through development to their ultimate value and projected through trending to a future point in time.

(3) “Rate” has the meaning stated in Insurance Article, §11-101, Annotated Code of Maryland.

(4) “Rating organization” has the meaning stated in Insurance Article, §11-101, Annotated Code of Maryland.

(5) “Supplementary rate information” has the meaning stated in Insurance Article, §11-101, Annotated Code of Maryland.

(6) “Supporting information” means:

(a) The experience and judgment of the insurer;

(b) The experience or data of other insurers or rating organizations relied upon by the insurer;

(d) Descriptions of methods used in making the rates; and

(e) Other similar information required to be filed by the Commissioner.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.04 Rating Organization Reference Filings of Advisory Prospective Loss Costs.

A. Rating organizations may develop and make reference filings containing advisory prospective loss costs. These filings shall contain the statistical data and supporting information, calculations, and assumptions underlying those prospective loss costs. Reference filings shall be filed and become effective in accordance with the provisions of Insurance Article, §§11-206, 11-307, 11-329, and 11-330, Annotated Code of Maryland.

B. An insurer may satisfy its obligation to make rate filings by:

(1) Becoming a member of, or a subscriber to, a licensed rating organization which makes reference filings of advisory prospective loss costs;

(2) Filing with the Commissioner the information required in Regulation .05 of this chapter; and

(3) Authorizing the Commissioner by the filing of a reference filing adoption form, to accept the reference filings on its behalf.

C. The insurer's rates shall be the currently effective prospective loss costs filed by the rating organization, combined with the loss cost adjustments which are filed in accordance with Regulation .05 of this chapter and are in effect for the insurer.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.05 Required Documents.

A. An insurer filing which refers to or incorporates a rating organization's reference filing of prospective loss costs shall include the following:

(1) Reference filing adoption form as set forth in Regulation .08 of this chapter, or the NAIC Loss Cost Filing Documents titled “Other than Workers' Compensation”, “For Workers' Compensation”, and “NAIC Expense Constant Supplement”;

(2) Summary of supporting information as set forth in Regulation .08 of this chapter; and

(3) Expense constant supplement as set forth in Regulation .08 of this chapter if expense constants are utilized.

B. To the extent that an insurer's final rates are determined solely by applying its loss cost adjustments, as presented in the reference filing adoption form, to the prospective loss costs contained in a rating organization's reference filing and printed in the rating organization's rating manual, the insurer need not develop or file its final rate pages with the Commissioner. If an insurer chooses to print and distribute final rate pages for its own use, based solely upon the application of its filed loss cost adjustments to a rating organization's prospective loss costs, the insurer need not file those pages with the Commissioner. If the rating organization does not print the loss costs in its rating manual, the insurer must submit its rates to the Commissioner.

C. With the initial prospective loss cost reference filing, rating organizations will no longer develop or file minimum premiums. If an insurer wishes to use minimum premiums it shall file the minimum premiums it will use.

Cross References

31.07.01.04B(2)

31.07.01.04C

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.06 Rating Organization Filings of Advisory Supplementary Rate Information.

A. Rating organizations may develop and make filings of supplementary rate information in accordance with Insurance Article, §§11-206 and 11-307, Annotated Code of Maryland.

B. An insurer may satisfy its obligation to make filings of supplementary rate information by becoming a member of, or a subscriber to, a licensed rating organization and by authorizing the Commissioner to accept the filings on its behalf. The insurer's supplementary rate information shall be that filed by the rating organization, subject to any modifications filed by the insurer.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.07 Existing Rates and Deviations Remain in Effect Until Disapproved, Replaced, or Modified.

Nothing in these regulations shall be construed to require any rating organization or member or subscriber insurer to refile any rates in effect. Any member or subscriber to a licensed rating organization is authorized to continue to use all rates and deviations in effect until such time as these rates are disapproved, replaced, or modified or the insurer submits an independent filing to change its rates or files a reference filing form adopting the rating organization's prospective loss costs, or modification of them.

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.01.08 Forms.

A. Reference Filing Adoption Form.

| | Date _________________ | | --- | --- | | Space Reserved for Insurance Department Use | Insurer Rate Filing Adoption of Rating Organization Prospective Loss Costs Reference Filing Adoption Form State of Maryland | | 1. Insurer Name | ____________________________ | | Address | ____________________________ | | | ____________________________ | | | ____________________________ | | | ____________________________ |

| Person Responsible for Filing | ____________________________ | | --- | --- | | Title ___________________________ | Telephone # __________________ | | 2. Insurer NAIC # | ____________________________ | | 3. Line of Insurance | ____________________________ | | 4. Rating Organization | ____________________________ | | 5. Rating Organization Reference Filing # | ____________________________ | | 6. The above insurer hereby declares that it is a member, subscriber or service purchaser of the named rating organization for this line of insurance. The insurer hereby files to be deemed to have independently submitted as its own filing the prospective loss costs in the captioned Reference Filing. The insurer's rates will be the combination of the prospective loss costs and the loss cost multipliers and, if utilized, the expense constants specified in the attachments. | | | 7. Proposed Rate Level | | | Change ____________ % | Effective Date _________________ | | 8. Prior Rate Level | | | Change ____________ % | Effective Date _________________ | | 9. Attach “Summary of Supporting Information Form” (Use a separate Summary for each insurer-selected loss cost multiplier.) | | | 10. Check one of the following: | | | ( ) The insurer hereby files to have its loss cost multipliers and, if utilized, expense constants be applicable to future revisions of the rating organization's prospective loss costs for this line of insurance. The insurer's rates will be the combination of the rating organization's prospective loss costs and the insurer's loss cost multipliers and, if utilized, expense constants specified in the attachments. The rates will apply to policies effective on or after the effective date of the rating organization's prospective loss costs. This authorization is effective until disapproved by the Commissioner, or amended or withdrawn by the insurer. | | | ( ) The insurer hereby files to have its loss cost multipliers and, if utilized, expense constants be applicable only to the above Rating Organization Reference Filing. | | | B. Summary of Supporting Information Form. | | | Insurer Name: ____________________ | Date: _______________________ | | NAIC Number: ___________________ | |

State of Maryland

Insurer Rate Filing

Adoption of Rating Organization Prospective Loss Costs

Summary of Supporting Information Form

Calculation of Company Loss Cost Multiplier

Line, Subline, Coverage, Territory, Class, etc.

combination to which this page applies:

Loss Cost Modification:

A. The insurer hereby files to adopt the prospective

loss costs in the captioned reference filing:

(CHECK ONE)

( ) Without modification. (factor = 1.000)

( ) With the following modification(s). (Cite the nature and percent modification, and attach supporting data and/or rationale for the modification.)

B. LOSS COST MODIFICATION Expressed as a Factor: _______

(See examples below.)

NOTE: If expense constants are utilized, attach “Expense Constant Supplement”, §C, below, or other supporting information. Do not complete items 3—7, below.

Development of Expected Loss Ratio. (Attach exhibit detailing insurer expense data and/or other supporting information.)

| | Selected Provisions | | --- | --- | | A. Total Production Expense | ________________ % | | B. General Expense | ________________ % | | C. Taxes, Licenses, and Fees | ________________ % | | D. Underwriting Profit and Contingencies | ________________ % | | E. Other (explain) | ________________ % | | F. TOTAL | ________________ % | | 4A. Expected Loss Ratio: ELR = | | | 100% - 3F = | ________________ % | | 4B. ELR in decimal form = | ________________ | | 5. Company Formula Loss Cost | | | Multiplier: (2B/4B)= | ________________ | | 6. Company Selected Loss Cost | | | Multiplier = | ________________ | | Explain any differences between 5 and 6: | | | ________________________________________________ ________________________________________________ | | | 7. Rate level change for the coverages to | | | which this page applies: | ________________ % | | ________________________________________________ ________________________________________________ | | | Example 1: Loss cost modification factor: If your company's loss cost modification is -10%, a factor of .90 (1.000 - .100) should be used. | | | Example 2: Loss cost modification factor: If your company's loss cost modification is +15%, a factor of 1.15 (1.000 + .150) should be used. | | | C. Expense Constant Supplement Form. | | | Insurer Name: _____________________ | Date: ____________ | | NAIC Number: __________________________________________ | |

State of Maryland

Expense Constant Supplement

Calculation of Company Loss Cost Multiplier

With Expense Constants

Development of Expected Loss Ratio. (Attach exhibit

detailing insurer expense data and/or other supporting

information.

| | Overall | Selected Provisions Variable | Fixed | | --- | --- | --- | --- | | A. Total Production Expense | _______ | ________ | ________ | | B. General Expense | _______ | ________ | ________ | | C. Taxes, Licenses, and Fees | _______ | ________ | ________ | | D. Underwriting Profit and Contingencies | _______ | ________ | ________ | | E. Other (explain) | _______ | ________ | ________ | | F. TOTAL | _______ | ________ | ________ | | 2.A. Expected Loss Ratio: ELR = 100% - Overall 1F = | _______ | | | | B. ELR expressed in decimal form = | _______ | | | | C. Variable Expected Loss Ratio VELR = 100% - Variable 1F = | | ________ | | | D. VELR in decimal form = | | ________ | |

| 3. Formula Expense Constant: ((1.00+2B) - (1.00+2D)) x Average Underlying Loss Cost = ________ Formula Variable Loss Cost Multiplier: (2B+2D) = ________ | | --- | | 4. Selected Expense Constant = ________ Selected Variable Loss Cost Multiplier ________ | | 5. Explain any differences between 3 and 4: | | _____________________________________________ _____________________________________________ | | 6. Rate level change for the coverages to which this page applies: _______% |

Cross References

31.07.01.05A(1)

31.07.01.05A(2)

31.07.01.05A(3)

History

Administrative History: Effective date: July 12, 1927
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Industrial Life, Health, and Accident Insurance Agents—Employment on Debit on Which He Previously Worked, repealed effective February 22, 1988 (15:4 Md. R. 472)
Administrative History: ——————
Administrative History: Regulations .01—.08, Property, Casualty, Surety, and Marine Rating, and Supplementary Information Filings, adopted as an emergency provision effective July 1, 1990 (17:15 Md. R. 1845); emergency status expired October 31, 1990; adopted permanently effective November 12, 1990 (17:22 Md. R. 2655)
Administrative History: Regulation .08 amended effective March 25, 1996 (23:6 Md. R. 475)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.21 to COMAR 31.07.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .02 amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .03B amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .04A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .05A amended effective November 17, 2008 (35:23 Md. R. 2017)
Administrative History: Regulation .06 amended effective November 17, 2008 (35:23 Md. R. 2017)
Authority: Insurance Article, §§2-109, 11-206, and 11-218, Annotated Code of Maryland

COMAR 31.07.02 Filing of Rate Level Index Information Forms [Repealed]

History

Administrative History: Effective date: January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulations .01—.03 amended as an emergency provision effective July 1, 1989 (16:13 Md. R. 1413); emergency status expired August 31, 1989; amended permanently effective October 30, 1989 (16:21 Md. R. 2261)
Administrative History: Regulation .03 amended and Appendices A—C repealed effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 adopted effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .05 adopted effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.64 to COMAR 31.07.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Chapter repealed effective April 12, 2004 (31:7 Md. R. 587)

31.07.03 Review of Automobile Rating Territories

COMAR 31.07.03.01 Purpose.

The purpose of this chapter is to ensure that all insurers that use territory as a factor in establishing automobile insurance rates in the State, including the Maryland Automobile Insurance Fund, file statements with the Commissioner that satisfy the requirements of Insurance Article, §§11-216 and 11-319, Annotated Code of Maryland.

History

Administrative History: Effective date: January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109, 11-216, 11-319, and 11-339, Annotated Code of Maryland

COMAR 31.07.03.02 Triannual Review of Territories.

Each insurer that uses territory as a factor in establishing automobile insurance rates in the State, including the Maryland Automobile Insurance Fund, shall conduct a review of its territories every 3 years.

Cross References

31.07.03.03C(2)

31.07.03.05A

History

Administrative History: Effective date: January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109, 11-216, 11-319, and 11-339, Annotated Code of Maryland

COMAR 31.07.03.03 Filing Requirements.

A. Each insurer that uses territory as a factor in establishing automobile insurance rates in the State, including the Maryland Automobile Insurance Fund, shall file with the Commissioner a certification statement.

B. The certification statement shall be on the form adopted by the Commissioner in Regulation .04 of this chapter.

C. The certification statement shall be filed:

(1) On or before June 1, 2007;

(2) Upon completion of each review required by the Commissioner pursuant to Regulation .02 of this chapter; and

(3) Contemporaneously with each rate filing that indicates a modification of territorial rating factors.

Cross References

31.07.03.04B(3)

History

Administrative History: Effective date: January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109, 11-216, 11-319, and 11-339, Annotated Code of Maryland

COMAR 31.07.03.04 Certification Statement for Automobile Insurers.

A. Certification Statement for Insurers and Rating Organizations.

CERTIFICATION STATEMENT

REVIEW OF AUTOMOBILE RATING TERRITORIES

I, ____________________ , a duly authorized representative of _______________________ (insurer or rating organization), NAIC # ______ (if applicable), do hereby certify that the following information is true to the best of my knowledge and belief.

The use of territories as a factor in rating by the above-named (insurer or rating organization) has been reviewed within the previous 3 years; and
Use of the territories on file, or as set forth in this filing, are actuarially justified. I understand that the Maryland Insurance Administration will rely on this certification, and if it is determined that this certification is materially false or incorrect, the insurer may be subject to administrative action, including appropriate penalties.

Date Signature of Authorized Representative

Name of Authorized Representative:

Title: ______________________________

Address of Insurer: _________________________________________________________

Mail certification statement to: P & C Rate and Form Unit, Maryland Insurance Administration, 200 St. Paul Place, Baltimore, MD 21202.

B. Certification Statement for Insurers Adopting the Certification Statement of a Rating Organization.

CERTIFICATION STATEMENT

REVIEW OF AUTOMOBILE RATING TERRITORIES

I, ______________ , a duly authorized representative of __________ insurer), NAIC # _____, do hereby certify that the following information is true to the best of my knowledge and belief.

_____________(insurer) is a member of or subscriber to _________________ (rating organization), a licensed rating organization, and has authorized the Commissioner to accept filings from ______________ (rating organization) on its behalf or has filed to adopt _______________ (rating organization's) filings.
________________(insurer) has filed no deviations relating to territory from the automobile rate filings submitted by ____________(rating organization).
_____________ (rating organization) has filed with the Commissioner the certification statement required by Insurance Article, §11-216 or 11-319, Annotated Code of Maryland, and COMAR 31.07.03.03.
____________________(insurer) hereby adopts the statements made in the certification statement.

I understand that the Maryland Insurance Administration will rely on this certification, and if it is determined that this certification is materially false or incorrect, the insurer may be subject to administrative action, including appropriate penalties.

Date Signature of Authorized Representative

Name of Authorized Representative:

Title: _____________________________

Address of Insurer: ____________________

Mail certification statement to: P&C Rate and Form Unit, Maryland Insurance Administration, 200 St. Paul Place, Baltimore, MD 21202.

Cross References

31.07.03.03B

31.07.03.05A

31.07.03.05B

History

Administrative History: Effective date: January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109, 11-216, 11-319, and 11-339, Annotated Code of Maryland

COMAR 31.07.03.05 Filings Made By Rating Organizations.

A. A licensed rating organization that files on behalf of its members or subscribers automobile insurance rates that use territory as a factor in establishing automobile insurance rates in the State shall comply with the provisions of Regulations .02—.04 of this chapter.

B. An insurer that is required to file a certification statement may utilize the certification statement in Regulation .04B of this chapter if:

(1) The insurer is a member or subscriber of a licensed rating organization which has been authorized to make filings on the insurer's behalf or the insurer has filed to adopt the rating organization's filing; and

(2) The insurer has not filed with the Commissioner a deviation from the rates, loss costs, or both, filed by the rating organization relating to the use of territories.

History

Administrative History: Effective date: January 15, 2007 (34:1 Md. R. 33)
Authority: Insurance Article, §§2-109, 11-216, 11-319, and 11-339, Annotated Code of Maryland

31.08.01 Antiarson Application

COMAR 31.08.01.01 General—Applicability.

A. This chapter applies to commercial monoline fire policies, designated occupancies, and areas of the State that are found by the Insurance Commissioner, after a public hearing, to have an abnormally high incidence of arson, except a one to four family owner-occupied dwelling, for loss due to fire as provided in Insurance Article, Title 19, Subtitle 3, Annotated Code of Maryland.

B. This chapter also applies to any existing insurance policy which is assigned because of the transfer of a major financial interest in the insured property.

C. An applicant is considered to hold a substantial interest or a major financial interest in any property or mortgage when the value held in a property or mortgage is equal to 10 percent of the ownership interest.

D. An antiarson application may be used for commercial monoline fire policies, designated occupancies, and designated areas of the State, based upon a finding by the Insurance Commissioner, after a public hearing, that these commercial monoline fire policies, designated occupancies, and areas of the State have an abnormally high incidence of arson.

E. The Insurance Commissioner may extend the application of these regulations to other than commercial monoline fire policies if the Insurance Commissioner finds, after public hearing, that the properties insured through those other types of policies are especially prone to arson.

History

Administrative History: Effective date: June 1, 1983 (10:6 Md. R. 556)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.60 to COMAR 31.08.01effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A—C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 3, Annotated Code of Maryland

COMAR 31.08.01.02 Antiarson Application.

A. Each insurer or producer soliciting insurance requiring the use of an antiarson application shall obtain from the applicant the information required by the form of application designated as Standard Antiarson Application Part 1 as set forth in Regulation .03 of this chapter. The completed application shall be obtained before the risk is bound.

B. The insurer or producer may not bind the risk or issue the coverage unless the applicant returns a completed and signed antiarson application.

C. If the Part 1 application indicates that further information is necessary, the insurer or producer shall require the applicant to complete the Standard Antiarson Application Part 2, as set forth in Regulation .04 of this chapter.

D. The insurer may cancel the policy or binder under either of the following circumstances by giving the insured a notice of cancellation stating the specific reason for the action:

(1) If the applicant does not furnish the insurer a completed and signed Antiarson Application Part 2 within 20 days after being requested to do so; or

(2) Under the conditions stated in Insurance Article, §19-309, Annotated Code of Maryland, within 90 days from receipt by the insurer of the Antiarson Application Part 2.

E. Changes In Information Given In Antiarson Application.

(1) In delivering any policy in connection with which an antiarson application was received, the insurer shall notify the policyholder that the policyholder is required to inform the insurer in writing of any change in the information originally given in an Antiarson Application, Part 1 or Part 2.

(2) The failure of the policyholder to notify the insurer in writing of any material change within 20 days of the change, shall be considered grounds to rescind the policy.

History

Administrative History: Effective date: June 1, 1983 (10:6 Md. R. 556)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.60 to COMAR 31.08.01effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A—C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 3, Annotated Code of Maryland

COMAR 31.08.01.03 Standard Antiarson Application—Part 1.

STATE OF MARYLAND

STANDARD ANTIARSON APPLICATION

PART I

NAME OF APPLICANT/INSURED ______________________________________

LOCATION OF STRUCTURE __________________________________________

PRESENT OCCUPANCY OF STRUCTURE _________________________________

Amount of Insurance __________ Applicant is:

Owner Occupant [ ] Absentee Owner [ ] Tenant [ ]

A. VALUATION: This information helps to explain the amount of insurance selected at the time of application, but does not determine the value at the time of loss.

Purchase Information: Date _________________ Price $_______

Cost of Subsequent Improvements $________________________

Estimated Replacement Cost $_____________________________

Estimated Fair Market Value (exclusive of land) $_______

For rental properties, indicate the Annual Rental Income

$_____________________________________________________________

Check the valuation method used to establish the amount of insurance:

Replacement Cost______________________________________

Replacement Cost Less Physical Depreciation___________

Fair Market Value (exclusive of land)_________________

Other (Describe)______________________________________

Who determined the value?________________________________

Attach a copy of any appraisal.

B. UNDERWRITING INFORMATION: If the answer to any of the following is “yes”, complete Part 2.

Is the applicant other than an individual or sole proprietorship?

Yes [ ] No [ ]

Are there any taxes unpaid or overdue for 1 or more years?

Yes [ ] No [ ]

Are there any tax liens against the property or business?

Yes [ ] No [ ]

Has anyone with a financial interest in this property been convicted for arson, fraud, or other crime related to loss on property owned now or during the last 10 years?

Yes [ ] No [ ]

Is the mortgagee other than a federal or State chartered lending institution?

Yes [ ] No [ ]

Have there been losses over the last 10 years with regard to any property in which the applicant held a substantial financial interest including a partnership interest or a mortgage and where any fire loss was in excess of 25% of the insured value?

Yes [ ] No [ ]

Is any portion of the building or any apartment vacant, unoccupied, or used on a seasonal basis?

Yes [ ] No [ ]

Has any coverage or policy on this property been declined, cancelled, or nonrenewed in the last 3 years?

Yes [ ] No [ ]

Is there any other insurance in force or to be secured on this property?

Yes [ ] No [ ]

Has the applicant owned this property for less than 3 years?

Yes [ ] No [ ]

THE PROPOSED INSURED DECLARES THAT THE INFORMATION PROVIDED ON THIS AND ANY OTHER APPLICATION, IS TRUE, COMPLETE, AND CORRECT BASED ON HIS/HER RECORDS, KNOWLEDGE AND BELIEF. THE PROPOSED INSURED AGREES THAT THESE APPLICATIONS SHALL CONSTITUTE A PART OF ANY POLICY ISSUED AND THAT ANY WILLFUL CONCEALMENT OR

MISREPRESENTATION OF A MATERIAL FACT OR CIRCUMSTANCE SHALL BE GROUNDS TO RESCIND THE INSURANCE.

Signature of Insured/Applicant—Date

Address of Insured/Applicant

Cross References

31.08.01.02A

History

Administrative History: Effective date: June 1, 1983 (10:6 Md. R. 556)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.60 to COMAR 31.08.01effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A—C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 3, Annotated Code of Maryland

COMAR 31.08.01.04 Standard Antiarson Application—Part 2.

STATE OF MARYLAND

STANDARD ANTIARSON APPLICATION

PART 2

A. Ownership Information:

Check the type of ownership for the insured property:

[ ] Shareholders of a corporation

[ ] Trustees and beneficiaries

[ ] Partners, including limited partners

[ ] Sole proprietorship

Complete the following for all those possessing an ownership interest of 10% or more, except that all owners should be listed for closed corporations and beneficiaries.

NAME ADDRESS POSITION INTEREST

Have any of the owners listed above:

a. Within the past ten years, claimed any fire loss for the destruction of 25% or more of any insured property?

Yes [ ] No[ ]

If Yes, complete the following:

| Location | Date | Amount of Loss | Description of Loss | | --- | --- | --- | --- | | ________________ | ________ | ______________ | _________________________ | | ________________ | ________ | ______________ | _________________________ |

b. Been convicted of any crimes?

Yes [ ] No[ ]

If Yes, complete the following:

| Name | Date | Offense | | --- | --- | --- | | _________________________ | ______ | ________________________________ |

Mortgage Payments:

Mortgagee___________________ Monthly Payment____________

Amount Past Due__________________________________________

List any other encumbrances______________________________

Unrecorded Mortgages:

Name of Mortgagee:_______________________________________

Explanation______________________________________________

Taxes (include Real Estate, Water, Sewer, Special Privilege, etc.):

Annual Amount Due_______________ Amount Past Due_________

Is the building for sale?

Yes [ ] No[ ]

If yes, date put up for sale: ____________

B. Vacancy.

Indicate seasonal period (if any) when building is unused:

For apartment buildings indicate:

Total units_______ Unoccupied units_____

For other buildings indicate percent vacant:_____
For all buildings indicate the following:

a. Reason for vacancy/unoccupancy:______________

b. Anticipated date of occupancy:_______________

c. If the building is vacant or unoccupied, indicate how it is protected from unauthorized entry_________________

C. Additional Property Description:

Is water, sewage, electricity, or heat out of service?

Yes [ ] No[ ]

If yes, explain__________________________________________

Is there unrepaired damage or have items been stripped from the building?

Yes [ ] No[ ]

If yes, describe:__________________________________________

Are any violations outstanding with regard to the Fire, Building or Health Code?

Yes [ ] No[ ]

Is there a governmental order to vacate or destroy the building or has the building been classified uninhabitable or structurally unsafe?

Yes [ ] No[ ]

D. Other Policies:

List all other policies which insure this property against fire loss:

| Status | Date | Amount of Insurance | Carrier | Policy # | | --- | --- | --- | --- | --- | | ______ | ______ | ___________________ | _________ | ________ |

List all real estate transactions during last 3 years involving this property:

| Date | Selling Price | Name of Seller | Amount of Mortgage | Mortgagee | | --- | --- | --- | --- | --- | | _____ | _______ | _______________ | ________ | _____________ |

| Witness—Date | Signature—Date | | --- | --- | | _______________________________ | __________________________ |

Cross References

31.08.01.02C

History

Administrative History: Effective date: June 1, 1983 (10:6 Md. R. 556)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.60 to COMAR 31.08.01effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A—C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 3, Annotated Code of Maryland

31.08.02 Toll-Free Telephone Number

COMAR 31.08.02.01 Scope.

This chapter applies to the purchase of private passenger automobile insurance only.

History

Administrative History: Effective date: May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.14 to COMAR 31.08.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B, C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.08.02.02 Establishment of Toll-Free Telephone Number.

A. The Insurance Commissioner shall establish a toll-free telephone number to assist and educate consumers concerning the purchase of private passenger automobile insurance.

B. The Commissioner may provide to callers educational materials that may include a rate guide or list of insurance producers and insurers.

C. The Commissioner may not recommend to callers specific insurers or insurance producers.

D. The toll-free telephone number shall be published in the private passenger automobile insurance rate guide prepared by the Commissioner.

Cross References

31.08.02.03A

History

Administrative History: Effective date: May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.14 to COMAR 31.08.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B, C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.08.02.03 Data.

A. The Commissioner shall maintain a record of calls received on the toll-free telephone number set forth in Regulation .02A of this chapter which includes the following information:

(1) The zip code and county of the caller; and

(2) The date and summary of the purpose of the call.

B. The Commissioner shall prepare a quarterly report which includes the information required in §A of this regulation.

History

Administrative History: Effective date: May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.14 to COMAR 31.08.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B, C amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

31.08.03 Notices of Cancellation, Nonrenewal, Premium Increase, and Reduction in Coverage

COMAR 31.08.03.01 Purpose.

The purpose of this chapter is to ensure that all insurers issuing private passenger motor vehicle liability insurance policies in Maryland include in their notices of cancellation, nonrenewal, premium increase, or reduction in coverage, a statement concerning the insured's right to protest the proposed action of the insurer within 30 days after the date of mailing of the notice in accordance with Insurance Article, §§27-613 and 27-614, Annotated Code of Maryland, which is incorporated by reference.

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.02 Applicability.

This chapter applies to all motor vehicle liability insurers authorized to write private passenger motor vehicle liability insurance policies in Maryland, other than the Maryland Automobile Insurance Fund.

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affiliated insurer” means an insurer that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another insurer.

(2) “Control” means the direct or indirect possession of the power to direct, or cause the direction of, the management and policies of an insurer, regardless of whether the power is exercised by:

(a) Ownership of voting securities or of securities convertible into voting securities;

(b) Contract, other than a commercial contract for goods or nonmanagement services; or

(3) “General increase in premiums” means an increase in premiums because of a change in an insurer's rates or a modification of the insurer's rating plan.

(4) “MIA Form 1006-A” means the notice of premium increase form in Regulation .07 of this chapter that insurers may use for premium increases of 15 percent or less for an entire policy.

(5) “MIA Form 1006-B” means the notice of premium increase form in Regulation .08 of this chapter that insurers may use for premium increases of greater than 15 percent for an entire policy.

(6) “Rating symbol” means a symbol assigned to a make or model of vehicle to reflect the loss experience of that make or model of vehicle.

(7) Reclassification.

(a) “Reclassification” means the placement of an insured by an insurer into a different classification based on one or more of the following criteria:

(i) Age, sex, or marital status of an insured;

(ii) Accident or driving record of an insured;

(iii) Usage, including mileage driven, of an insured vehicle; or

(iv) Performance classification (high performance, intermediate performance, and sports type) of an insured vehicle.

(b) “Reclassification” does not include an offer of coverage through an affiliated insurer.

(8) Reduction in Coverage.

(a) “Reduction in coverage” includes:

(i) A reduction of any limit for liability coverage, uninsured motorist coverage, or personal injury protection if the limit is greater than the statutorily required minimum;

(ii) An increase in the deductible for or elimination of comprehensive coverage; or

(iii) A reduction or elimination of towing coverage, rental coverage, or any other coverage.

(b) “Reduction in coverage” does not include:

(i) The elimination of any coverage that is no longer offered by an insurer in accordance with its filed rating plan; or

(ii) Any reduction or elimination of coverage made at the request of the insured.

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.04 Procedure and Requirements Regarding Cancellation or Nonrenewal.

A notice of cancellation or nonrenewal sent by an insurer to its insured in accordance with Insurance Article, §§ 27-601.2 and 27-613, Annotated Code of Maryland, shall be sent by certified mail, delivered to an electronic mail address at which the insured has consented to receive mail, or posted to an electronic network with a separate notice to the insured directed to the electronic mail address at which the insured has consented to receive notice of the posting. In addition to the information required under §27-613, the notice shall include the following on the first page of the notice in 12-point bold type:

IMPORTANT

“Right of Protest”

The “Right of Protest” does not apply to cancellation or nonrenewal due to nonpayment of premium.

You may protest the action proposed by this notice as provided under Insurance Article, § 27-613, Annotated Code of Maryland by mail, facsimile, or electronically to the Insurance Commissioner. You must file your protest within thirty (30) days after this notice was sent to you in order for your protest to be considered by the Insurance Commissioner. If you send your protest by mail or facsimile you, the named insured, must sign a copy of this notice and send it to:

Insurance Commissioner

Maryland Insurance Administration

200 St. Paul Place

Suite 2700

Baltimore, Maryland 21202

Fax Number 410-468-2307

You may file your protest electronically by uploading a copy at the following link:

https://enterprise.insurance.maryland.gov/consumer/ConsumerPortalWelcomePage.aspx

Your timely filed protest stays the action proposed by this notice. Accordingly, your insurance policy will remain in effect with the same coverages and premium that applied on the date this notice was sent to you until a determination is made by the Insurance Commissioner. In order to keep your policy in effect, however, you must timely pay any authorized premium due or becoming due before the determination is issued.

The Insurance Commissioner will determine whether your protest has merit. You will then be notified in writing whether the proposed action is disallowed or your protest is dismissed.

If the protest is dismissed, you then have the right, within thirty (30) days after the date on which the Commissioner sends you the determination, to request a hearing.

If you request a hearing, you will be notified in writing of the time and place of the hearing at least ten (10) days before the hearing. The Commissioner shall order the insurer to pay reasonable attorney fees incurred by you for representation at the hearing if the Commissioner finds that: (1) the actual reason for the proposed action is not stated in the notice or the proposed action is not in accordance with §27-501 of the Insurance Article, the insurer's filed rating plan, its underwriting standards, or the lawful terms and conditions of the policy related to a cancellation or nonrenewal; and (2) the insurer's conduct in maintaining or defending the proceeding was in bad faith or the insurer acted willfully in the absence of a bona fide dispute.

I protest the action proposed by the insurer.

My reasons for protesting the action are:

Signature (Named Insured) – required if protest submitted by mail or fax: __________________________

Date: _____________

Insured’s Daytime Phone Number: __________________________

Insured’s Email Address: __________________________________

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.05 Procedure and Requirements Regarding a Reduction in Coverage.

IMPORTANT

“Right of Protest”

The “Right of Protest” does not apply to cancellation or nonrenewal due to nonpayment of premium.

Insurance Commissioner

Maryland Insurance Administration

200 St. Paul Place

Suite 2700

Baltimore, Maryland 21202

Fax Number 410-468-2307

You may file your protest electronically by uploading a copy at the following link:

https://enterprise.insurance.maryland.gov/consumer/ConsumerPortalWelcomePage.aspx

The Insurance Commissioner will determine whether your protest has merit. You will then be notified in writing whether the proposed action is disallowed or your protest is dismissed.

If the protest is dismissed, you then have the right, within thirty (30) days after the date on which the Commissioner sends you the determination, to request a hearing.

I protest the action proposed by the insurer.

My reasons for protesting the action are:

Signature (Named Insured) – required if protest submitted by mail or fax: __________________________

Date: _____________

Insured’s Daytime Phone Number: __________________________

Insured’s Email Address: __________________________________

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.06 Procedures and Requirements Regarding an Increase in Premium.

A. Scope.

(1) Except as provided in §A(2) of this regulation, this regulation applies to any increase in premium by an insurer.

(2) This regulation does not apply to an increase in premium due to:

(a) A general increase in premiums filed with the Commissioner if the increase in premium of the insured does not result from a reclassification of the insured;

(b) The addition of a motor vehicle to a policy;

(d) A change in vehicle usage that results in a change in driver class;

(e) A change of territory;

(f) A change in the age, sex, or marital status of an insured.

(g) An increase in coverage limits requested by the insured;

(h) The addition of a driver;

(i) The removal of a multi-policy discount;

(j) Any request by an insured that results in a change in coverage, decrease in deductible, or other change to a policy;

(k) The removal or reduction of a discount unless the discount is removed or reduced wholly or partly due to:

(i) An accident;

(ii) A violation of the Maryland Vehicle Law or the vehicle law of another state;

(iii) The claims history of the insured;

(iv) A retiering of the insured; or

(v) The application of a program that measures the operation of an insured vehicle during the current policy period as referenced in Insurance Article, §11-318, Annotated Code of Maryland;

(l) The change or modification of a rating symbol;

(m) The recalculation of a premium by an insurer during the 45-day underwriting period in accordance with Insurance Article, §12-106(d)(2) and (3), Annotated Code of Maryland; or

(n) Any other cause for an increase in premium for which the Commissioner waives the notice requirement.

B. Notice.

(1) Before an insurer may increase a premium, the insurer shall comply with the notice requirements of Insurance Article, §27-614, Annotated Code of Maryland.

(2) The insurer shall send a notice of premium increase to its insured using a first-class mail tracking method.

C. Form of Notice.

(1) If an increase in premium is 15 percent or less for an entire policy, the insurer shall use MIA Form 1006-A in Regulation .07 of this chapter or a substantially similar form.

(2) If an increase in premium is greater than 15 percent for an entire policy, the insurer shall use MIA Form 1006-B in Regulation .08 of this chapter or a substantially similar form.

(3) If an insurer uses a form other than MIA Form 1006-A or MIA Form 1006-B, the insurer shall submit the form to the Commissioner for approval before the insurer may use the form.

(4) In order to be considered substantially similar to MIA Form 1006-A or MIA Form 1006-B, a form shall:

(a) At a minimum, contain the same information that is contained in MIA Form 1006-A or MIA Form 1006-B;

(b) Be printed in 12-point word processing point size in Arial, Universal, or another font that is as large or larger in size and spacing; and

(c) Contain the language of the “Right to Protest” section from MIA Form 1006-A or MIA Form 1006-B starting on the first page of the form.

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.07 MIA Form 1006-A.

FORM ADD AT END OF CHAPTER

Cross References

31.08.03.03B(4)

31.08.03.06C(1)

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.08 MIA Form 1006-B.

FORM ADDED AT END OF CHAPTER

Cross References

31.08.03.03B(5)

31.08.03.06C(2)

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.09 Statement of Actual Reason.

A. Applicability to Binders. This regulation applies to a binder only if the binder has been in effect for at least 45 days.

B. Contents of Statement. If an insurer cancels, refuses to renew, increases a premium for, or reduces coverage under a policy or binder of private passenger motor vehicle liability insurance, the statement of actual reason required by Insurance Article, §§27-613 or 27-614, Annotated Code of Maryland, shall include at a minimum:

(1) If the action of the insurer is due wholly or partly to an accident:

(a) The name of the driver;

(b) The date of the accident; and

(2) If the action of the insurer is due wholly or partly to a violation of Maryland vehicle law or the vehicle laws of another state:

(a) The name of the driver;

(b) The date of the violation; and

(3) If the action of the insurer is due wholly or partly to the claims history of an insured:

(a) The date that the claim that is the basis of the insurer's action occurred; and

(b) A description of each claim, such as:

(i) “Theft of vehicle on [date]”;

(ii) “Vandalism of vehicle on [date]”; or

(iii) “Towing claim on [date]”; or

(4) If the action of the insurer is due wholly or partly to a reason other than those described in §B(1)—(3) of this regulation or to a violation of the terms and conditions of the policy or the underwriting standards of the insurer, a description of the action of the insured that is the basis of the insurer's action, such as:

(a) “Insured loans the insured vehicle to an excluded driver”; or

(b) “Insured loans the insured vehicle to a non-listed driver”.

C. In addition to the information required by §B of this regulation, with respect to a cancellation or nonrenewal, the statement of actual reason required by Insurance Article, §27-613, Annotated Code of Maryland, shall include a statement that the action by the insured that is the basis of the cancellation or nonrenewal violates the insurer's rating criteria or underwriting standards.

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

COMAR 31.08.03.10 Record Retention Requirements.

A. Length of Retention. An insurer that provides a notice of cancellation, nonrenewal, premium increase, or reduction in coverage pursuant to Insurance Article, §27-613 or 27-614, Annotated Code of Maryland, and this chapter, shall retain a copy of the notice and its proof of mailing for at least 3 years from the effective date of the notice.

B. Form of Records. An insurer may maintain a copy of a notice and the proof of mailing required to be retained by §A of this regulation in paper, photographic, microprocessed, magnetic, mechanical, electronic, digital, or any other medium, if the copy of the notice and proof of mailing are maintained in a manner that:

(1) Is clear and legible;

(2) Accurately reproduces the original document in its entirety, including any attachments to the document;

(3) Is capable of producing a clear and legible hard copy of the original document; and

(4) Preserves evidence of any signature contained on the document.

Attachments

31.08.03.07-form

31.08.03.08-form

History

Administrative History: Effective date: July 1, 1979 (6:13 Md. R. 1125)
Administrative History: Regulation .01 repealed and new Regulation .01 adopted effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .03 amended and .04 adopted effective December 17, 1984 (11:25 Md. R. 2133)
Administrative History: Regulation .03 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: Regulation .04 amended effective February 4, 1991 (18:2 Md. R. 149)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective October 1, 1997 (24:22 Md. R. 1550); revised permanently effective March 23, 1998 (25:6 Md. R. 487)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.34 to COMAR 31.08.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2003 (29:20 Md. R. 1591) (This revision applies to all cancellations of, failure to renew, increase in premiums for, and reductions in coverage under a policy of motor vehicle liability insurance that are effective on or after January 1, 2003)
Administrative History: Regulation .03B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .04 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .05A amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .07 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .08 amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .08 amended as an emergency provision effective November 3, 2005 (32:25 Md. R. 1939); amended permanently effective March 13, 2006 (33:5 Md. R. 523)
Administrative History: Regulation .09B amended effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: Regulation .10 repealed effective March 14, 2005 (32:5 Md. R. 582)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective January 11, 2008 (35:3 Md. R. 287); revised permanently effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .04 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .05 amended effective February 22, 2021 (48:4 Md. R. 178); November 15, 2021 (48:23 Md. R. 982); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .06A amended effective June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .06A, B amended effective November 15, 2021 (48:23 Md. R. 982)
Administrative History: Regulation .07 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .08 amended effective March 1, 2016 (42:22 Md. R. 1380); February 22, 2021 (48:4 Md. R. 178); June 1, 2025 (52:3 Md. R. 161)
Administrative History: Regulation .10 amended effective November 15, 2021 (48:23 Md. R. 982)
Authority: Insurance Article, §§2-109, 11-318, 27-609, 27-613, and 27-614, Annotated Code of Maryland

31.08.04 Motor Vehicle Insurance—Out-of-State Coverage

COMAR 31.08.04.01 Out-Of-State Motor Vehicle Coverage.

On and after the effective date of these regulations each insurer issuing a motor vehicle liability insurance policy covering a Maryland resident shall include in the policy a provision regarding out-of-State insurance coverage at least as favorable to the insured as the following:

"It is agreed that, subject to all the provisions of the policy except where modified herein, the following provision is added:

“If, under the provisions of the motor vehicle financial law or the motor vehicle compulsory insurance law or any similar law of the District of Columbia or of any state or province, a nonresident is required to maintain insurance with respect to the operation or use of a motor vehicle in such jurisdiction and such insurance requirements are greater than the insurance provided by the policy, the limits of the company's liability and the kinds of coverage afforded by the policy shall be as set forth in such law, in lieu of the insurance otherwise provided by the policy, but only to the extent required by such law and only with respect to the operation or use of a motor vehicle in such jurisdiction; provided that the insurance under this provision shall be reduced to the extent that there is other valid and collectible insurance under this or any other motor vehicle insurance policy. In no event shall any person be entitled to receive duplicate payments for the same elements of loss.”

Cross References

31.08.04.02

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision
Administrative History: effective November 1, 1983 (10:22 Md. R. 1963); adopted permanently
Administrative History: effective March 1, 1984 (11:1 Md. R. 43)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.63 to COMAR 31.08.04 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(k), 2-108, 2-109, and 19-101(a) and (b), Title 11, Subtitle 2, and Title 19, Subtitle 5; Transportation Article, Title 17, Subtitle 1; Annotated Code of Maryland

COMAR 31.08.04.02 Existing Policies.

On the effective date of these regulations each insurer which has a motor vehicle liability insurance policy covering a Maryland resident in force which does not have coverage as favorable to the insured as that in Regulation .01 of this chapter shall amend the policy to provide the coverage of Regulation .01 of this chapter. The insurer may make an additional charge for any coverage added under the requirements of this regulation subject to a rate filing approved by the Insurance Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01 and .02 adopted as an emergency provision
Administrative History: effective November 1, 1983 (10:22 Md. R. 1963); adopted permanently
Administrative History: effective March 1, 1984 (11:1 Md. R. 43)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.63 to COMAR 31.08.04 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(k), 2-108, 2-109, and 19-101(a) and (b), Title 11, Subtitle 2, and Title 19, Subtitle 5; Transportation Article, Title 17, Subtitle 1; Annotated Code of Maryland

31.08.05 Addition, Reduction, or Elimination in Coverage Notice Requirement

COMAR 31.08.05.01 Purpose.

Often when a property and casualty policy is renewed, coverage is reduced or eliminated or deductibles are increased. There may also be automatic increases in policy limits pursuant to construction or inflation indices. The purpose of this chapter is to require all property and casualty insurers who intend to reduce or eliminate coverage, change a deductible or increase policy limits to clearly notify the policyholder of the action that has been taken.

History

Administrative History: Effective date: July 30, 1981 (8:12 Md. R. 1060)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.32 to COMAR 31.08.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A amended effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 11, 2013 (40:22 Md. R. 1878)
Administrative History: Regulation .03 repealed effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109, 4-113, and 27-216, and Title 11, Subtitle 2, Annotated Code of Maryland

COMAR 31.08.05.02 Notice Requirement.

A. This regulation does not apply to:

(1) A change in coverage that is made at the request of the insured;

(2) A change in coverage to a commercial risk that uses the services of a risk manager, broker, or insurance adviser;

(3) A reduction in coverage for a policy of private passenger motor vehicle liability insurance that is subject to Insurance Article, §27-613, Annotated Code of Maryland; or

(4) The recalculation of a premium by an insurer during the 45-day underwriting period in accordance with Insurance Article, §12-106(d)(2) and (3), Annotated Code of Maryland.

B. In this regulation, “delivery by electronic means” includes:

(1) Delivery to an electronic mail address at which a party has consented to receive notice; and

(2) Posting on an electronic network, together with separate notice to a party directed to the electronic mail address at which the party has consented to receive notice of the posting.

C. An insurer shall provide notice to an insured in accordance with §§D and E of this regulation if the insurer proposes to:

(1) Eliminate or reduce coverage under a primary property or casualty policy, including a reduction in coverage caused by an increase in a deductible; or

(2) Automatically add or increase coverage under a primary property or casualty policy pursuant to policy terms that allow for any inflation or construction increases.

D. An insurer that is required to provide notice under §C of this regulation shall include in the notice a clear and specific description of each change in coverage that identifies:

(1) The type of coverage that will be changed; and

(2) The dollar amount of the change in coverage.

E. At least 45 days before the change in coverage is scheduled to take effect, the insurer shall send the notice to the insured by:

(1) First class mail; or

(2) Delivery by electronic means in accordance with Insurance Article, §27-601.2, Annotated Code of Maryland.

F. If an insurer that proposes to eliminate or reduce coverage under a primary property or casualty policy fails to provide the notice that is required by §C of this regulation in accordance with the requirements of §§D and E of this regulation, the insurer may not implement the proposed elimination or reduction in coverage and may be subject to administrative action.

History

Administrative History: Effective date: July 30, 1981 (8:12 Md. R. 1060)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.32 to COMAR 31.08.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02A amended effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: ——————
Administrative History: Regulation .02 repealed and new Regulation .02 adopted effective November 11, 2013 (40:22 Md. R. 1878)
Administrative History: Regulation .03 repealed effective November 11, 2013 (40:22 Md. R. 1878)
Authority: Insurance Article, §§2-109, 4-113, and 27-216, and Title 11, Subtitle 2, Annotated Code of Maryland

31.08.06 Nation-Wide Marine Definition and Plan for Interpretation

COMAR 31.08.06.01 Purpose.

A. The Nation-Wide Marine Definition which was approved by the National Association of Insurance Commissioners on June 12, 1953, is hereby adopted for use in Maryland, and all insurance policies issued or renewed on or after September 1, 1953, were and shall be subject to the provisions of the Nation-Wide Marine Definition.

B. The purpose of this chapter is to describe the kinds of risks and coverages which may be classified or identified under State Insurance Laws as marine, inland marine, or transportation insurance, but does not include all of the kinds of risks and coverages which may be written, classified, or identified under marine, inland marine, or transportation insuring powers. This chapter may not be construed to mean that the kinds of risks and coverages are solely marine, inland marine, or transportation insurance in all instances.

C. This chapter may not be construed to restrict or limit in any way the exercise of any insuring powers granted under charters and license whether used separately, in combination or otherwise.

History

Administrative History: Effective date: September 1, 1953
Administrative History: Amended effective December 1, 1959; January 1, 1964; November 1, 1965; May
Administrative History: 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.14 to COMAR 31.08.06 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(y), (z), and (qq) and 2-109, Annotated Code of Maryland

COMAR 31.08.06.02 Coverage.

A. Marine or transportation policies, or both, may cover under the following conditions provided in this regulation.

B. Imports.

(1) A shipment on consignment means property consigned and intrusted to a factor or agent to be held in his care, or under his control for sale for account of another or for exhibit or trial or approval or auction, and if not disposed of, to be returned.

(2) Imports on consignment may be covered wherever the property may be and without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.

(3) Imports not on consignment in such places of storage as are usually employed by importers, provided the coverage of the issuing companies includes hazards of transportation.

(4) These policies may also include the same coverage in respect to property purchased on C. I. F. terms or spot purchases for inclusion with or in substitution for bona fide importations.

(5) An import, as a proper subject of marine or transportation insurance, shall be deemed to maintain its character as such so long as the property remains segregated in the original form or package in such a way that it can be identified and has not become incorporated and mixed with the general mass of property in the United States, and shall be deemed to have been completed when the property has been:

(a) Sold and delivered by the importer, factor or consignee;

(b) Removed from place of storage as described in §B(3) of this regulation and placed on sale as part of importer's stock in trade at a point of sale-distribution; or

(c) Delivered for manufacture, processing, or change in form to premises of the importer or of another used for these purposes.

C. Exports.

(1) Exports may be covered whenever the property may be without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.

(2) An export, as a proper subject of marine or transportation insurance, shall be deemed to acquire its character as such when designated or while being prepared for export and retain that character unless diverted for domestic trade, and when so diverted, the provisions of §D of this regulation respecting domestic shipments shall apply, provided, however, that this provision does not apply to long established methods of insuring certain commodities, for example, cotton.

D. Domestic Shipments.

(1) Domestic shipments on consignment, provided the coverage of the issuing companies includes hazards of transportation:

(a) Property shipped on consignment for sale or distribution, while in transit and not exceeding 120 days after arrival at consignee's premises or other place of storage or deposit; and

(b) Property shipped on consignment for exhibit, or trial, or approval or auction, while in transit, while in the custody of others and while being returned.

(2) Domestic shipments not on consignment, provided the coverage of the issuing companies includes hazards of transportation, beginning and ending within the United States, provided that these shipments may not be covered at manufacturing premises or after arrival at premises owned, leased, or operated by assured or purchaser, or for more than 90 days at other place of storage or deposit, except in premises of transportation companies or freight forwarders, when the storage is incident to transportation.

E. Bridges, Tunnels, and Other Instrumentalities of Transportation and Communication.

(1) Bridges, tunnels, and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents, and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion are the only hazards to be covered. Piers, wharves, docks, and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion. Other aids to navigation and transportation, including dry docks and marine railways, against all risks.

(2) The foregoing includes:

(a) Bridges, tunnels, other similar instrumentalities, unless fire, lightning, windstorm, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion are the only perils to be covered;

(b) Piers, wharves, docks, and slips, but excluding the risks of fire, lightning, windstorm, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion;

(c) Pipelines, including on-line propulsion, regulating and other equipment appurtenant to pipelines, but excluding all property at manufacturing, producing, refining, converting, treating, or conditioning plants;

(d) Power transmission and telephone and telegraph lines, excluding all property at generating, converting, or transforming stations, sub-stations, and exchanges;

(e) Radio and television communication equipment in commercial use as such including towers and antennae with auxiliary equipment, and appurtenant electrical operating and control apparatus but excluding buildings, their improvements and betterments, furniture and furnishings, and supplies held in storage in the building;

(f) Outdoor cranes, loading bridges, and similar equipment used to load, unload, and transport.

F. Personal Property Floater Risks—Individuals.

(1) Tourists floater, personal effects floater policies.

(2) The personal property floater.

(3) Government service floaters.

(4) Personal fur floaters.

(5) Personal jewelry floaters.

(6) Wedding present floaters for not exceeding 90 days after the date of the wedding.

(7) Silverware floaters.

G. Personal Property Floater Risks—General Coverage.

(1) Fine Arts Floaters, Stamp and Coin Floaters. To cover objects of art such as pictures, statuary, bronzes and antiques, rare manuscripts and books, articles of virtu, etc.

(2) Musical Instrument Floaters. Radios, televisions, record players, and combinations thereof are not deemed musical instruments.

(3) Radium Floaters.

(4) Physicians' and Surgeons' Instrument Floaters. These policies may include coverage of the furniture, fixtures, and tenant assured's interest in the improvements and betterments of buildings as are located in that portion of the premises occupied by the assured in the practice of his profession.

(5) Pattern and die floaters, excluding coverage on the owner's premises.

(6) Theatrical floaters, excluding buildings and their improvements and betterments, and furniture and fixtures that do not travel about with theatrical troupes.

(7) Film floaters, including builders' risk during the production and coverage on completed negatives and positives and sound records.

(8) Salesmen's samples floaters.

(9) Jewelers' block policies, including tenant assured's interest in improvements and betterments of buildings, furniture, fixtures, tools, machinery, patterns, molds, and dies.

(10) Exhibition policies on property while on exhibition and in transit to or from the exhibitions.

(11) Live animal floaters, covering wherever animals, wagons, and mobile equipment may be.

(12) Installation Risks.

(a) Installation risks, covering machinery and equipment including plumbing, heating, cooling and electrical systems (as distinguished from building materials) while in transit to place of installation and during the period of installation and testing. Coverage shall cease when whichever of the following first occurs:

(i) When the property is insured for the account of the seller or installer, when the interest of the insured ceases; or

(ii) Not later than when the property has been accepted as satisfactory.

(b) Building materials (e.g., structural steel, lumber, bricks and mortar), while in transit to place of installation and after arrival thereat but the coverage shall terminate when the materials are installed and have become a physical part of the realty or when the seller's interest ceases, whichever first occurs.

(13) Mobile articles, machinery, and equipment floaters (excluding motor vehicles designed for highway use and auto homes, trailers, and semitrailers except when hauled by tractors not designed for highway use and snowplows constructed exclusively for highway use), covering identified property of a mobile or floating nature, not on sale or consignment, or in course of manufacture, which has come into the custody or control of parties who intend to use the property for the purpose for which it was manufactured or created. These policies do not cover furniture and fixtures not customarily used away from premises where the property is usually kept.

(14) Bailees.

(a) Property in transit to or from and in the custody of:

(i) Bleacheries, throwsters, fumigatories, dyers, cleaners, laundries, and similar bailees;

(ii) Needleworkers;

(iii) Other bailees (not owned, controlled, or operated by the bailor) for the purpose of performing work thereon (as distinguished from the making of a complete article) including the treatment of, or assemblage of property on the premises of bailees.

(b) These policies do not cover bailee's property at his premises.

(15) Installment Sales and Leased Property. Policies covering property sold under conditional contract of sale, partial payment contract, installment sales contract, or leased but excluding motor vehicles designed for highway use. These policies shall cover in transit but may not extend beyond the termination of the seller's or lessor's interest. This subsection is not intended to include machinery and equipment under certain “lease-back” contracts.

(16) Garment contractors floaters.

(17) Furriers or fur storer's customer's policies (that is, policies under which certificates or receipts are issued by furriers or fur storers) covering specified articles the property of customers.

(18) Accounts receivable policies, valuable papers and records policies.

(19) Cold storage locker plant policies, covering merchandise of customers consisting principally of meats, game, fish, poultry, fruit, vegetables, and property of a similar nature.

(20) Floor plan policies, covering property for sale while in possession of dealers under a floor plan or any similar plan under which the dealer borrows money from a bank or lending institution with which to pay the manufacturer, provided:

(a) That:

(i) The merchandise is specifically identifiable as encumbered to the bank or lending institution;

(ii) The dealer's right to sell or otherwise dispose of the merchandise is conditioned upon its being released from encumbrance by the bank or lending institution;

(iii) The policies cover in transit and do not extend beyond the termination of the dealer's interest.

(b) That the policies may not cover automobiles or motor vehicles; merchandise for which the dealer's collateral is the stock or inventory as distinguished from merchandise specifically identifiable as encumbered to the lending institution.

(21) Sign and Street Clock Policies, covering neon signs, automatic or mechanical signs, street clocks, while in use as such.

(22) Inland Marine Policies.

(a) The following policies covering property which, when sold to the ultimate purchaser, may be covered specifically, by the owner, under Inland Marine Policies:

(i) Musical Instrument Dealers' Policies, covering property consisting principally of musical instruments, and their accessories. Radios, televisions, record players and combinations thereof are not deemed musical instruments.

(ii) Camera Dealers' Policies, covering property consisting principally of cameras and their accessories.

(iii) Furrier's Dealers' Policies, covering property consisting principally of fur and fur garments.

(iv) Equipment Dealers' Policies, covering mobile equipment consisting of binders, reapers, tractors, harvesters, harrows, tedders, and other similar agricultural equipment and accessories; construction equipment consisting of bulldozers, road scrapers, tractors, compressors, pneumatic tools, and similar equipment and accessories; but excluding motor vehicles designed for highway use.

(b) These policies may include coverage of tenant assured's interest in improvements and betterments of building and of furniture, fixtures, tools, machinery, patterns, molds, and dies.

(23) Wool Growers' Floaters.

(24) Domestic Bulk Liquids Policies, covering domestic bulk liquids stored in tanks provided the risks of fire and inherent explosion, windstorm, sprinkler leakage, earthquake, hail, explosion, riot, or civil commotion are excluded from the policy.

(25) Furniture Shipment Policies, covering furniture, fixtures, and equipment in bona fide course of shipment from one location to another location of the owner including in place of deposit incident to the transportation while awaiting determination or availability of final destination, in which event they shall cover at time of issuance transportation to or from the place of deposit but may not cover after delivery at destination.

H. Unless otherwise permitted, nothing in the foregoing shall be construed to permit marine or transportation policies to cover:

(1) Storage of assured's merchandise, except as provided above;

(2) Merchandise in course of manufacture, the property of and on the premises of the manufacturer;

(3) Furniture and fixtures and improvements and betterments to buildings;

(4) Merchandise in a permanent location, sold under partial payment, contract of sale, or installment sales contract, which involves protection of the purchaser's interest after seller's interest ceases;

(5) Monies or securities, or both, in safes, vaults, safety deposit vaults, bank or assured's premises, except while in course of transportation;

(6) Risks of fire, windstorm, sprinkler leakage, earthquake, hail, explosion, riot, or civil commotion on buildings, structures, wharves, piers, docks, bulkheads, and sheds and other fixed real property on land or over water, except as provided above.

I. Inland Marine Insurance.

(1) The following property, when owned and used for pleasure and not for business, hire, or other commercial use, shall be classified as Inland Marine Insurance:

(a) Outboard motors, including their equipment and appurtenances;

(b) Rowboats, canoes and boats not exceeding 16 feet in overall length, measured on the centerline and designed exclusively to be propelled by one or more outboard motors;

(2) Coverage of any of the property specified in §I(1) of this regulation in conjunction with vessels not falling within §I(1)(b) need not be classified as inland marine insurance.

History

Administrative History: Effective date: September 1, 1953
Administrative History: Amended effective December 1, 1959; January 1, 1964; November 1, 1965; May
Administrative History: 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.14 to COMAR 31.08.06 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(y), (z), and (qq) and 2-109, Annotated Code of Maryland

COMAR 31.08.07 Medical Malpractice—Closed Claims Surveys [Repealed]

History

Administrative History: Effective date: July 12, 1987 (14:14 Md. R. 1571)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.72 to COMAR 31.08.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter repealed effective October 27, 2003 (30:21 Md. R. 1531)

31.08.08 Lead Poisoning

COMAR 31.08.08.01 Scope.

This chapter establishes requirements for liability insurance concerning lead hazards for affected property.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Affected Property;

(a) “Affected property” means:

(i) A residential rental property constructed before 1950 that contains not more than one rental dwelling unit;

(ii) A residential rental property that contains not more than one rental dwelling unit for which the owner makes an election under Environment Article, §6-803(a)(2), Annotated Code of Maryland; or

(iii) An individual rental dwelling unit within a residential rental property constructed before 1950 that contains more than one rental dwelling unit, or a residential rental property that contains more than one rental dwelling unit for which the owner makes an election under Environment Article, §6-803(a)(2), Annotated Code of Maryland.

(b) “Affected property” does not include property exempted under the Environment Article, §6-803(b), Annotated Code of Maryland.

(2) “Authorized insurer” means an insurer that:

(a) Holds a certificate of authority in this State;

(b) Issues, or issues for delivery in this State, third-party bodily injury liability insurance under:

(i) Homeowners' coverage,

(ii) Owners', landlords', and tenants' coverage, or

(iii) Other premises liability coverage; and

(3) “Claim” means the notice provided to an insured that a person at risk has an elevated blood lead level under Environment Article, §6-828(b)(1), Annotated Code of Maryland, for the purpose of:

(a) Informing the insured that a person at risk has an elevated blood level; and

(b) Triggering the authorized insurer's duty to respond on behalf of the insured in accordance with Environment Article, Title 6, Subtitle 8, Part V, Annotated Code of Maryland, subject to reasonable notice provisions in a contract or insurance policy.

(4) “Person at risk” means a child younger than 6 years old or a pregnant woman who resides or regularly spends at least 24 hours per week in an affected property.

(5) “Rental dwelling unit” has the meaning stated in Environment Article, §6-801(t), Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.03 Coverage.

A lead hazard exclusion contained in a contract of insurance issued or renewed on or after January 1, 1995, shall be waived with respect to an affected property which is covered under the policy to the extent of a qualified offer made or to be made under Environment Article, Title 6, Subtitle 8, Part V, Annotated Code of Maryland, if:

A. The affected property is in compliance with the provisions of Environment Article, Title 6, Subtitle 8, Part III, Annotated Code of Maryland;

B. Without regard to whether a change in occupancy has occurred, and at the election of the insured, the affected property:

(1) Passes the test for lead-contaminated dust under Environment Article, §6-816, Annotated Code of Maryland, or

(2) Has undergone the lead hazard reduction treatments and complies with the risk reduction standards under Environment Article, §6-815(a)(2), Annotated Code of Maryland; and

C. The insured, under Environment Article, §6-818, Annotated Code of Maryland, submits to the authorized insurer a current verified report of an accredited inspector certifying that the affected property complies with the standards set forth in §B of this regulation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.04 Claim.

If coverage exists, an insurer shall defend all claims for which the insured is potentially liable when a claim is made against an insured.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.05 Deductible.

A. An authorized insurer providing lead hazard coverage under Insurance Article, §19-704, Annotated Code of Maryland:

(1) Shall offer the coverage without a deductible for the lead hazard coverage; and

(2) May offer the coverage with a deductible for the lead hazard coverage.

B. When an insurer pays a claim on the policy with a deductible, the:

(1) Insurer shall pay the claim, including any applicable deductible; and

(2) Insured shall reimburse the insurer for any amount paid up to the limit of any applicable deductible.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.06 Cancellation, Nonrenewal, or Reimposition of an Exclusion.

A. An insurer may cancel or not renew lead hazard coverage or reimpose an exclusion only if the:

(1) Insured fails to:

(a) Pay the applicable premium,

(b) Provide reasonable access to the affected property for purposes of inspection for the presence or condition of lead by the insurer or the insurer's designee,

(d) Perform lead hazard reduction treatments as set forth in Environment Article, §6-815(a), Annotated Code of Maryland; or

(2) Affected property fails to comply or maintain compliance with the risk reduction standards under Environment Article, §6-815(a)(2), Annotated Code of Maryland.

B. An insurer may cancel or not renew lead hazard coverage or reimpose an exclusion under §A(1)(d) or (2) of this regulation only if the insurer provides the insured with:

(1) Written notice that the insurer intends to cancel or not renew lead hazard coverage or intends to reimpose the exclusion; and

(2) An opportunity to correct the violation within 30 days after the mailing of the notice by the insurer.

C. In addition to any other contractual requirement, the insured shall provide the insurer with a certification under Environment Article, §6-815(c) or 6-816, Annotated Code of Maryland, that the violation has been corrected and the property is in compliance with Environment Article, §6-815(a), Annotated Code of Maryland, within 30 days after the mailing of the notice by the insurer.

D. Lead hazard coverage remains in effect if the violation is corrected and the property is in compliance with Environment Article, §6-815(a), Annotated Code of Maryland, within 30 days after the mailing of the notice by the insurer.

E. Lead hazard coverage may be canceled or not renewed, or a lead hazard exclusion may be reimposed, on the 31st day after the mailing of the notice by the insurer if the insured does not provide the insurer with the certification required under §C of this regulation.

F. The insurer shall include in its endorsement for lead hazard coverage that the lead hazard coverage may be canceled or not renewed pursuant to the conditions set forth in this regulation.

G. This regulation does not preclude the insurer from canceling a policy for any other reason as allowed by Insurance Article, Annotated Code of Maryland.

Cross References

31.08.08.07A

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

COMAR 31.08.08.07 Notice of Cancellation, Nonrenewal, or Reimposition of an Exclusion.

A. If an insurer intends to not renew or cancel lead hazard coverage, or intends to reimpose a lead hazard exclusion, pursuant to Regulation .06B of this chapter, which is not at the request of the insured, the insurer shall give the insured written notice of this change. This notice shall include, at a minimum, the following information:

(1) The insurer intends to not renew or cancel lead hazard coverage, or intends to reimpose a lead hazard exclusion;

(2) How the insured failed to perform lead hazard reduction treatments as set forth in Environment Article, §6-815(a), Annotated Code of Maryland, or how the affected property failed to comply or maintain compliance with the risk reduction standards under Environment Article, §6-815(a)(2), Annotated Code of Maryland;

(3) The date by which the insured shall provide to the insurer certification under Environment Article, §6-815(a) or 6-816, Annotated Code of Maryland, that the violation is corrected, which date should be 30 days after the mailing of the notice by the insurer; and

(4) The location of the affected property of which the insurer intends to not renew or cancel lead hazard coverage, or intends to reimpose a lead hazard exclusion.

B. The insurer, or the insurer's authorized representative, shall mail or deliver to the insured or a person designated by the insured on the policy, the notice prescribed in §A of this regulation.

C. If an insurer fails to provide the notice required by Regulation .04B of this chapter and §A of this regulation, the lead hazard coverage remains in effect.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective November 30, 1994 (21:26 Md. R. 2181)
Administrative History: Regulations .01—.05 adopted effective March 13, 1995 (22:5 Md. R. 367)
Administrative History: Chapter revised effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.08 to COMAR 31.08.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07A amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §2-109 and Title 19, Subtitle 7, Annotated Code of Maryland

31.08.09 Group Self-Insurance for Workers' Compensation

COMAR 31.08.09.01 Scope.

This chapter applies only to workers' compensation self-insurance groups (“group” or “groups”) organized pursuant to Insurance Article, Title 25, Subtitle 3, Annotated Code of Maryland, and not to groups organized pursuant to Labor and Employment Article, §9-402(a), Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.02 Definitions.

A. All terms defined in Insurance Article, Title 25, Subtitle 3, Annotated Code of Maryland, which are used in this chapter have the same meaning as in Insurance Article, Title 25, Subtitle 3, Annotated Code of Maryland.

B. Terms Defined.

(1) “Insolvent” or “insolvency” means the inability of a group to pay its outstanding lawful obligations as they mature in the regular course of business as may be shown either by an excess of its required reserves and other liabilities over its assets or by its not having sufficient assets to reinsure all of its outstanding liabilities after paying all accrued claims owed by it.

(2) “Net premium” means premium derived from standard premium adjusted by any advance premium discounts.

(3) “Standard premium” means the premium derived from the pure loss manual rate adjusted by the expense factors and by experience modification factors, but before advance premium discounts.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.03 Incorporation by Reference.

The Basic Manual for Workers' Compensation and Employees Liability Insurance (2001 Edition), published by the National Council on Compensation Insurance (NCCI) is incorporated by reference.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.04 Business and Industry Classifications.

A. A group may be formed only by employers who are engaged in the same or a similar type of business or who are members of the same bona fide trade or professional association which has been in existence for not less than 5 years.

B. For the first 5 years of its existence or until such time as the self-insured group's experience is such that its data becomes fully credible, a group shall classify employees as set forth in the Basic Manual for Workers' Compensation and Employees Liability Insurance (2001 Edition), published by the National Council on Compensation Insurance (NCCI).

C. If the group submits justification to the Commissioner showing that it has fully credible data from which a change in classification could be supported from an actuarial perspective and what the deviation from the NCCI classification would be and the Commissioner approves same, then the group may use such classifications.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.05 Minimum Premium Amounts.

A. During a group's first year of operation it shall have an annual premium of at least $500,000, all of which shall have been paid to the group not later than the end of the ninth month of the group's first year of operation.

B. For each year after the first year of operation, the annual premium shall be at least $500,000 unless the Commissioner determines that a greater amount is required based on the Commissioner's examination of the group's annual statement of financial condition.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.06 Surety Bonds.

A. Each group shall obtain and maintain a surety bond for the protection of group members and their employees in an amount not less than $500,000 unless the Commissioner specifies a different amount.

B. The Commissioner may, in the Commissioner's discretion, waive the requirement of §A of this regulation and permit a group to deposit and maintain in trust with the State Treasurer, for the protection of group members, employees and creditors, cash or government securities of the type described in Insurance Article, §5-701(b), Annotated Code of Maryland, in an amount not less than the amount specified in §A of this regulation.

C. Each administrator and service company shall obtain a fidelity bond in an amount not less than $100,000, and a performance bond in an amount not less than $50,000, before providing services to a workers' compensation self-insurance group.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.07 Excess Insurance Coverage.

A. Each group shall maintain excess insurance coverage in an amount not less than $1,000,000 per occurrence and not less than $5,000,000 in the aggregate over a commercially available and reasonable attachment point subject to review of the Commissioner.

B. A group shall send a copy of its excess insurance policy to the Commissioner in the following circumstances:

(1) Within 60 days of the renewal or replacement of an existing policy unless, within 90 days after its inception date, such policy will be provided to the Commissioner pursuant to §B(3) of this regulation;

(2) Within 60 days of an amendment to an existing policy unless, within 90 days after its inception date, such amended policy will be provided to the Commissioner pursuant to §B(3) of this regulation;

(3) Annually as provided in COMAR 31.08.09.13B; or

(4) Upon request of the Commissioner.

C. The Commissioner may, in the Commissioner's discretion, take the following actions by notifying the group in writing:

(1) Increase the minimum amount of excess insurance coverage to assure adequacy of coverage for each group; and

(2) Require the group to obtain and maintain excess coverage with a specified attachment point upon consideration of, but not limited to, the following factors relating to the group:

(a) Size of group, that is, the number of members and premium volume;

(b) Financial condition of group;

(d) Group's loss development history; and

(e) The availability of reinsurance at specific attachment points at economically feasible rates.

D. Instead of maintaining excess insurance coverage as set forth in §A of this regulation, a group may deposit and maintain in trust with the State Treasurer, cash or government securities of the type described in Insurance Article, §5-701(b), Annotated Code of Maryland, in an amount at least equal to the minimum excess insurance coverage required by §A of this regulation.

E. A policy of excess insurance may not be recognized by the Commissioner unless the policy is:

(1) Issued by an insurer admitted to do business in Maryland unless the Commissioner, in his discretion, allows the coverage to be placed with an approved surplus lines carrier; and

(2) Not subject to cancellation or nonrenewal for any reason except nonpayment of premium except upon 45 days notice sent by certified mail to the group and to the Commissioner.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.08 Application for Certificate of Authority.

A. A person or entity may not act as a workers' compensation self-insurance group except as so authorized by the Commissioner.

B. Application for a certificate of authority shall be made to the Commissioner on a form prescribed by him and shall include a $25 nonrefundable filing fee.

C. The application form shall be accompanied by the following:

(1) A list of the names of the members of the group, to include each member’s:

(a) Corporate name;

(b) Main business address;

(d) Date upon which the member’s fiscal year ends;

(2) Proof of compliance with the requirements of these regulations;

(3) A copy of the group's articles of association, if any;

(4) A copy of agreements with the administrator and with any service company;

(5) A copy of the group's bylaws, which shall contain, at a minimum:

(a) A copy of or written description of the underwriting standards for acceptance and continuance in the group;

(b) A copy of or written description of the method for selecting the board of trustees and administrator of the group;

(d) A copy of or written description of the method for amending the group's bylaws;

(6) A copy of regulations adopted by the trustees, which shall be binding on the administrator and service company and which shall contain, at a minimum:

(a) A description of the manner in which excess funds and claim reserves shall be invested;

(b) A description of the frequency and extent of loss control and safety engineering services provided to members of the group;

(d) A schedule for the collection of premiums, including a definition of “delinquent premium”;

(e) A copy of or written description of the membership, admission, and expulsion procedures;

(f) A copy of or written description of the delineation of authority granted to the administrator, board of trustees, and service company; and

(g) A copy of the procedures for handling disputes regarding premium payments by members;

(7) A copy of the agreement between the group and each member securing the payment of workers' compensation benefits;

(8) A list of the initial board of trustees and administrator of the group;

(9) The address in this State where the books and records of the group will be maintained at all times;

(10) A financial statement on a form acceptable to the Commissioner showing the financial ability of the group to pay the workers' compensation obligations of its members;

(11) Proof of payment to the group by each member of not less than 25 percent of that member's first year estimated annual net premium on a date prescribed by the Commissioner;

(12) A statement outlining the guidelines used to determine the types of businesses eligible for membership in the group;

(13) Copies of executed agreements with each member assuming joint and several liability for obligations of the group in the event of insolvency of the Self-Insurers' Guaranty Fund;

(14) A description of the arrangements whether in-house or under contract, for handling claims; and

(15) A report on the financial condition of each member in a format acceptable to the Commissioner, based on each member’s most recent fiscal year-end data, which shall include the following information for each member:

(a) Total assets;

(b) Total liabilities and net worth;

(d) Net profit;

(e) The member’s fiscal year-end date; and

(f) The basis for reporting the financial information, including whether the report was prepared by a certified public accountant and presented in conformity with generally accepted accounting principles.

D. At the request of the Commissioner, the group shall submit additional financial information or financial statements for any or all members of the group.

E. To obtain and maintain its certificate of authority, a group shall comply with the following requirements, as well as with any other requirements established by law or regulation:

(1) Provide notice to the Commissioner as soon as practicable of any change in the information required to be filed under §B or C of this regulation; and

(2) Maintain combined net assets of all members of at least $1,000,000 as shown by the most recent annual financial report of one or more members, each of which is prepared by an independent certified public accountant and in conformity with generally accepted accounting principles, and submitted on behalf of the group as a whole.

Cross References

31.08.09.13C

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.09 Commissioner Attorney for Service of Process on Groups.

Every group shall be deemed to have appointed the Commissioner its attorney to receive service of legal process issued against it in this State and this appointment shall be irrevocable, shall bind any successor in interest and shall remain in effect for so long as there is any obligation or liability of the group in this State for workers' compensation benefits.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.10 Termination of Certificate of Authority.

The Commissioner may not grant the request of any group to terminate its certificate of authority until the group has insured or reinsured all incurred workers' compensation obligations, including both known claims and expenses associated with them, with an authorized insurer under an agreement filed with and approved in writing by the Commissioner.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.11 Merger of Groups.

A. The Commissioner may approve a merger of groups engaged in the same or a similar type of business only if the resulting group assumes in full all obligations of the merging groups.

B. The Commissioner shall hold a hearing on the merger, pursuant to Insurance Article, §§2-203 and 2-210—2-214, Annotated Code of Maryland, if requested to do so by a member of either group.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.12 Fiscal Examinations.

A. The Commissioner may make an examination of the affairs, transactions, records, and assets of any group as often as the Commissioner deems necessary to determine the group's financial solvency and for the protection of the interest of the people of Maryland, but the examination may not be less frequent than once every 5 years.

B. Each group shall pay to the Commissioner an annual sum of $500 to be used to defray the cost of examinations.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.13 Annual Submission of Financial Reports and Other Reports.

A. On or before 90 days following the end of a group's fiscal year, each group shall submit to the Commissioner a fiscal year-end audited financial report, prepared by an independent certified public accountant, in conformity with generally accepted accounting principles, which shall be on a form prescribed by the Commissioner which shall include, but not be limited to:

(1) Actuarially appropriate reserves for:

(a) Known claims and expenses associated with them;

(b) Claims incurred but not reported and expenses associated with them;

(d) Bad debts, for which reserves shall be shown as liabilities;

(2) An actuarial opinion in compliance with the current edition of the Financial Analysis Handbook published by the National Association of Insurance Commissioners and given by a member of the American Academy of Actuaries or a person who has otherwise demonstrated his or her actuarial competence to the satisfaction of the Commissioner, regarding reserves for:

(a) Known claims and expenses associated with them; and

(b) Claims incurred but not reported and expenses associated with them.

B. A copy of a group’s excess insurance policy for the current calendar year shall be submitted with the fiscal year-end audited financial report required by §A of this regulation.

C. On or before 90 days following the end of a group's fiscal year, each group shall submit to the Commissioner a report, in a format acceptable to the Commissioner, regarding the financial condition of each member based on the member’s most recent fiscal year-end data, containing the information described in COMAR 31.08.09.08C(15). The report shall be signed by an executive officer of the group.

Cross References

31.08.09.07B(3)

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.14 Rebates and Temporary Suspension of Member Contributions.

A. Any monies for a fund year in excess of the amount necessary to fund all undiscounted losses and loss adjustment expenses for that fund year, actuarially determined by a member of the American Academy of Actuaries or a person who has otherwise demonstrated his or her actuarial competence to the satisfaction of the Commissioner, may be rebated to members of the group.

B. A rebate for any fund year shall be paid only to those employers who remain participants in the group for the entire fund year.

C. Instead of rebating excess monies, a group may temporarily suspend premium contributions for a period of time calculated to result in no excess for the succeeding fund year.

D. No rebates or suspension of premium contributions shall be made when a group is insolvent or otherwise causes the group to be considered in a financially hazardous condition pursuant to §9-102 of the Insurance Article of the Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

COMAR 31.08.09.15 Prohibited Unfair Trade Practices.

A. The following actions by a group are prohibited unfair trade practices and are violations of this regulation:

(1) Excluding an employer from a group for any reason based in whole or in part upon race, color, creed, sex, or blindness of the employer or its employees, or for any arbitrary, capricious, or unfairly discriminatory reason;

(2) Excluding an employer from a group by the application of standards which are not reasonably related to the group's economic and business purposes; and

(3) Requiring the existence of special conditions, facts, or situations as a condition to acceptance or continuance in a group of a particular employer in an arbitrary, capricious, or unfairly discriminatory manner based in whole or in part upon race, creed, color, sex, religion, national origin, place of residency, or blindness or other physical handicap or disability of the employer or its employees.

B. If, after written notice and opportunity for a hearing, the Commissioner finds that a group has committed a prohibited unfair trade practice, as defined in this regulation, the Commissioner may exercise the powers conferred upon him by Insurance Article, §25-308, Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 1988 (15:26 Md. R. 2982)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.73 to COMAR 31.08.09 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulation .04 amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .05A, B amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: Regulation .06A amended as an emergency provision effective October 28, 2002 (29:23 Md. R. 1809); amended permanently effective February 3, 2003 (30:2 Md. R. 76)
Administrative History: ——————
Administrative History: Chapter revised effective June 30, 2008 (35:13 Md. R. 1182)
Administrative History: Regulation .06A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .07 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .08 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .13 amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14A amended effective January 1, 2018 (44:4 Md. R. 256)
Administrative History: Regulation .14D adopted effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§2-108, 2-109, 9-102, Title 25, Subtitle 3, and 27-501, Annotated Code of Maryland

31.08.10 Medical Professional Insurers Online Claim Survey Reporting Requirements

COMAR 31.08.10.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Amount paid to claimant” means the amount of claim settlements and claim awards.

(2) “Closed claim” means a claim filed with the Director of the Health Care Alternative Dispute Resolution Office under Courts and Judicial Proceedings Article, §3-2A-04, Annotated Code of Maryland, that has resulted in:

(a) A final judgment in any amount;

(b) A settlement in any amount; or

(3) “Confidential information” means “confidential commercial information”, “confidential financial information”, and “financial information” as those terms are used in State Government Article, §10-617(d) and (f), Annotated Code of Maryland.

(4) “Financial information report” means an annual report as described in Regulation .02 of this chapter.

(5) “Insurer” means each insurer that provides professional liability insurance to a physician, nurse, dentist, podiatrist, optometrist, or chiropractor licensed under Health Occupations Article, Annotated Code of Maryland, or a hospital licensed under Health—General Article, Annotated Code of Maryland.

(6) “Neutral expert” has the meaning stated in Courts and Judicial Proceedings Article, §3-2A-09(d)(2), Annotated Code of Maryland.

History

Administrative History: Effective date: May 22, 2006 (33:10 Md. R. 882)
Administrative History: Regulation .02B amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§4-401 and 4-405, Annotated Code of Maryland

COMAR 31.08.10.02 Financial Information Report.

A. Scope. An insurer that issues professional liability insurance to health care providers in the State shall submit to the Commissioner a financial information report.

B. Confidential Information.

(1) An insurer that submits a financial information report shall notify the Commissioner at the time of the submission of any information contained in the report that the insurer considers to be proprietary information.

(2) The Commissioner, in accordance with State Government Article, §10-617(d) and (f), Annotated Code of Maryland, shall deny inspection of any part of a report submitted under this chapter that the Commissioner determines contains confidential commercial information or confidential financial information.

C. Filing Requirements.

(1) Insurers shall submit a financial information report by April 30 of each year for the preceding calendar year.

(2) The financial information report shall state, in the aggregate:

(a) The nature and cost of reinsurance for the insurer for the preceding calendar year;

(b) The claims experience, by category, of health care providers insured by the insurer during the preceding calendar year;

(d) The amount of reserves for claims incurred and for incurred but unreported claims held by the insurer at the close of the preceding calendar year; and

(e) The number of claims settled by the insurer during the preceding calendar year that included structured settlement payments.

Cross References

31.08.10.01B(4)

History

Administrative History: Effective date: May 22, 2006 (33:10 Md. R. 882)
Administrative History: Regulation .02B amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§4-401 and 4-405, Annotated Code of Maryland

COMAR 31.08.10.03 Closed Claim Survey.

A. Scope. Each insurer that issues professional liability insurance in the State shall complete and submit to the Commissioner a closed claim survey form, as described in Regulation .04 of this chapter, for each closed claim.

B. Within 90 days after the end of each calendar quarter, an insurer shall complete and submit to the Commissioner the closed claim survey forms for claims closed by the insurer in that quarter.

C. The closed claim survey forms shall be submitted to the Commissioner using an online survey tool made available by the Maryland Insurance Administration.

D. A closed claim that is covered under a primary policy and one or more excess policies shall be reported only by the insurer that issued the primary policy. The insurer that issued the primary policy shall report the total amount, if any, paid with respect to the closed claim, including any amount paid under an excess policy and any amount paid by the health care provider subject to the claim or by a person other than an insurer on behalf of that health care provider.

E. A closed claim survey form shall be completed and submitted only for a closed claim that arises out of an act or omission alleged to have occurred in the State or that was covered under a policy of professional liability insurance issued in the State. If the act, omission, or injury alleged in the closed claim allegedly occurred outside the State but was subject to resolution under the substantive laws of the State, a closed claim survey form is not to be submitted on that closed claim, unless the closed claim was covered under a policy of professional liability insurance issued in the State.

F. A single closed claim survey form shall be filed for any closed claim that arises out of the same alleged acts or omissions of a health care provider and asserts the same injury, regardless of the number of claimants seeking damages on account of that injury. Any amounts identified on the closed claim survey form in connection with such a closed claim shall reflect all amounts paid to all claimants in that closed claim.

G. If the insurer did not close any claims during a calendar quarter, the insurer need not submit a closed claim survey form but shall so notify the Commissioner in writing within 90 days after the end of the calendar quarter.

History

Administrative History: Effective date: May 22, 2006 (33:10 Md. R. 882)
Administrative History: Regulation .02B amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§4-401 and 4-405, Annotated Code of Maryland

COMAR 31.08.10.04 Required Information.

The following information shall be reported on a closed claim survey form:

A. Name of insurer;

B. Name of insurer group;

C. Claim file identification (ID);

D. Name of person completing the form;

E. Telephone number, including area code, of person completing the form;

F. Date form completed;

G. Date of injury;

H. Date injury reported to insurer;

I. Date claim closed;

J. Whether the claim was previously reported;

K. Age of injured person at time of injury;

L. Gender of injured person at time of injury;

M. Type of injury, such as wrongful death, permanent disability, or other bodily injury;

N. Description of injury;

O. Name of health facility where injury occurred;

P. Type of medical professional liability policy, such as occurrence, claims made—basic, or claims made—tail;

Q. Type of patient, such as inpatient, emergency room outpatient, or other outpatient;

R. Physician Insurance Services Office Incorporated (ISO) classification or equivalent classification;

S. Type of health care provider, such as physician-no surgery, surgeon, psychiatrist and related specialties, nurse, nurse midwife, optometrist, pharmacist, chiropractor, podiatrist, psychologist, dentist, hospital, other health care facility, or nurse anesthetist;

T. Physician and surgeon classification, including name of specialty;

U. Health care provider name;

V. Health care provider license number;

W. Policy limits for each claim or medical incident;

X. Policy limits for annual aggregate;

Y. If known, the facility, office, or county where the injury occurred;

Z. Whether the claim is a zero payment claim file;

AA. Full name and location of the court where the suit was filed and the case was tried;

BB. Case or docket number;

CC. Whether settlement was reached or award was made at one of the following stages:

(1) Arbitration;

(2) Mediation before suit was filed;

(3) After suit was filed, but before trial;

(4) During trial, but before court verdict;

(5) Court verdict;

(6) After verdict; or

(7) After appeal was filed;

DD. If settlement was reached or award was made by court verdict, whether the result was:

(1) Directed verdict for plaintiff;

(2) Directed verdict for defendant;

(3) Judgment notwithstanding the verdict for plaintiff;

(4) Judgment notwithstanding the verdict for defendant;

(5) Judgment for plaintiff;

(6) Judgment for defendant;

(7) Judgment for plaintiff, after appeal;

(8) Judgment for defendant, after appeal; or

(9) Any other;

EE. If there was no final judgment or settlement, the date of the final disposition;

FF. If there was no final judgment or settlement, the reason for the final disposition;

GG. If case did go to trial, whether the case was tried by a jury or tried by a judge;

HH. Total amount paid to the claimant;

II. Amount paid by the insurer;

JJ. Amount paid by the insured due to retention or deductible;

KK. If known, the amount paid by an excess carrier;

LL. If known, the amount paid by the insured due to settlement or award in excess of policy limits, not including deductible or retention amounts;

MM. If known, the amount paid by the insurer due to settlement or award in excess of policy limits, not including deductible or retention amounts;

NN. If known, the amount paid by other defendants or contributors;

OO. A summary of the occurrence from which the claim or action arose;

PP. A description of the misdiagnosis or alleged misdiagnosis made, if any, of the patient's actual condition;

QQ. A description of the procedure giving rise to the claim;

RR. A description of the principal injury giving rise to the claim;

SS. The amount of past medical expenses claimed by the plaintiff;

TT. The amount of future medical expenses claimed by the plaintiff;

UU. The amount of past lost wages claimed by the plaintiff;

VV. The amount of future lost wages claimed by the plaintiff;

WW. The amount of noneconomic damages claimed by the plaintiff;

XX. The amount of other damages claimed by the plaintiff;

YY. Whether a structured settlement or periodic payment was used, and if so:

(1) The amount of immediate payment;

(2) The present value of the projected total future payout, that is, the price of the annuity, if purchased;

(3) The projected total future payout; and

(4) The cost of the structure;

ZZ. If a neutral expert was used, the findings of a neutral expert witness regarding future medical expenses;

AAA. If a neutral expert was used, the findings of a neutral expert witness regarding future loss of earning;

BBB. If case was tried to verdict:

(1) The amount awarded for past medical expenses;

(2) The amount awarded for future medical expenses;

(3) The amount awarded for past lost wages;

(4) The amount awarded for future lost wages;

(5) The amount awarded for noneconomic damages; and

(6) The amount awarded for other damages;

CCC. The total allocated loss adjustment expense;

DDD. Of the total allocated loss adjustment expense, the amount representing fees paid to defense counsel;

EEE. Of the total allocated loss adjustment expense, the amount of expenses not included in the defense counsel fees;

FFF. Whether there was a claim made for extra contractual damages;

GGG. The amount claimed for extra contractual damages;

HHH. Whether a suit was filed or claim was made for extra contractual damages; and

III. Where the suit for the extra contractual damages claim was filed, including:

(1) The full name of the court where the suit was filed and the case was tried;

(2) The case number or docket number;

(3) Whether the claim settled or was tried;

(4) If tried, whether the trial was before a judge or jury;

(5) The amount paid for the extra contractual damages claim; and

(6) Whether the claim was previously reported to the Commissioner.

Cross References

31.08.10.03A

History

Administrative History: Effective date: May 22, 2006 (33:10 Md. R. 882)
Administrative History: Regulation .02B amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§4-401 and 4-405, Annotated Code of Maryland

COMAR 31.08.10.05 Penalties.

Failure to report in accordance with this chapter may result in the imposition by the Commissioner of a civil penalty of up to $5,000.

History

Administrative History: Effective date: May 22, 2006 (33:10 Md. R. 882)
Administrative History: Regulation .02B amended effective January 1, 2018 (44:4 Md. R. 256)
Authority: Insurance Article, §§4-401 and 4-405, Annotated Code of Maryland

COMAR 31.08.11 Liability of Insurer — Failure to Act in Good Faith [Repealed]

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective October 17, 2007 (34:23 Md. R. 2022); emergency status extended at 35:9 Md. R. 896; emergency status extended at 35:17 Md. R. 1483
Administrative History: ——————
Administrative History: Regulations .01—.07 adopted effective October 20, 2008 (35:21 Md. R. 1828)
Administrative History: Regulation .04A amended effective October 11, 2013 (40:22 Md. R. 1875)
Administrative History: Regulation .05A, E amended effective October 11, 2013 (40:22 Md. R. 1875)
Administrative History: ——————
Administrative History: Regulations .01—.07 repealed effective March 27, 2017 (44:6 Md. R. 328)

31.08.12 Temporary Moratoriums and Weather Events

COMAR 31.08.12.01 Purpose.

The purpose of this chapter is to ensure that all authorized insurers that utilize temporary moratoriums on the writing of property and casualty insurance, the addition of endorsements for additional coverages, or other policy changes do so in a way that balances the interests of consumers, insurers, producers, and Maryland businesses.

History

Administrative History: Effective date: March 22, 2010 (37:6 Md. R. 480)
Administrative History: Regulation .02 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .03 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .04 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .05 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 repealed effective November 24, 2016 (43:23 Md. R. 1281)
Authority: Insurance Article, §§2-108, 2-109, 19-107, and 27-501, Annotated Code of Maryland

COMAR 31.08.12.02 Filing a Temporary Moratorium Protocol.

A. An insurer that intends to activate a temporary moratorium in response to an event or emergency listed in Regulation .03C of this chapter shall file its moratorium protocol with the Administration.

B. The moratorium protocol shall:

(1) Be filed with the Commissioner as an underwriting standard or as a rating rule prior to its use;

(2) Be filed for all lines of insurance business to which the underwriting standard or rating rule applies;

(3) Identify the events or emergencies listed in Regulation .03C of this chapter that will trigger the activation of the temporary moratorium; and

(4) Identify the events that will result in the deactivation of the temporary moratorium.

C. If a moratorium protocol under §B of this regulation is not filed with the Administration, a temporary moratorium as described in §A of this regulation is not valid and may subject the insurer to appropriate administrative action.

History

Administrative History: Effective date: March 22, 2010 (37:6 Md. R. 480)
Administrative History: Regulation .02 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .03 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .04 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .05 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 repealed effective November 24, 2016 (43:23 Md. R. 1281)
Authority: Insurance Article, §§2-108, 2-109, 19-107, and 27-501, Annotated Code of Maryland

COMAR 31.08.12.03 Moratorium Protocol.

A. An insurer shall design a temporary moratorium protocol to have the least impact on the conduct of insurance business throughout the State as reasonably possible.

B. An insurer may not utilize the activation of a temporary moratorium to suspend the binding or writing of all of its lines of insurance business unless the suspension is reasonably related to the event or emergency that triggered the activation of the temporary moratorium.

C. A temporary moratorium may not become effective until triggered by at least one of the following events or emergencies:

(1) The National Weather Service issues a hurricane or tropical storm watch, warning, or advisory for part of the State or the entire State. For the purpose of this subsection, the “National Weather Service” shall mean the National Weather Service, National Hurricane Center in Miami, Florida, and its regional National Weather Service Forecast Office covering a part of the State.

(2) The Governor or other governmental entity declares a state of emergency for part of the State or the entire State;

(3) The announcement of an evacuation, whether mandatory or voluntary, for part of the State or the entire State;

(4) The imposition of a special curfew for part of the State or the entire State; or

(5) The onset of an earthquake that is in an area within:

(a) 50 miles of the epicenter of an earthquake that measures 5.0 to 5.9 on the Richter scale; or

(b) 100 miles of the epicenter of an earthquake that measures greater than 5.9 on the Richter scale.

D. The temporary moratorium shall be limited to parts of the State:

(1) For which the National Weather Service has issued a hurricane or tropical storm watch, warning, or advisory;

(2) That are included within a government-declared state of emergency;

(3) That are under an evacuation order, whether mandatory or voluntary;

(4) That are under a special curfew; or

(5) That are within:

(a) 50 miles of the epicenter of an earthquake that measures 5.0 to 5.9 on the Richter scale; or

(b) 100 miles of the epicenter of an earthquake that measures greater than 5.9 on the Richter scale.

E. A temporary moratorium shall apply only to lines of insurance business that are reasonably expected to be affected by the events or emergencies listed in §C of this regulation that triggered the activation of the temporary moratorium.

Cross References

31.08.12.02A

31.08.12.02B(3)

31.08.12.04C

31.08.12.05B

31.08.12.05C(1)

31.08.12.05C(2)

History

Administrative History: Effective date: March 22, 2010 (37:6 Md. R. 480)
Administrative History: Regulation .02 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .03 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .04 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .05 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 repealed effective November 24, 2016 (43:23 Md. R. 1281)
Authority: Insurance Article, §§2-108, 2-109, 19-107, and 27-501, Annotated Code of Maryland

COMAR 31.08.12.04 Exceptions.

An insurer may not utilize the activation of a temporary moratorium to deny binding authority or coverage for the following transactions:

A. Property insurance that was bound prior to the activation of the temporary moratorium;

B. Automobile liability insurance purchased in connection with the purchase of a new or used motor vehicle by a consumer;

C. Issuance of a policy for which the risk of loss is unrelated to the events or emergencies listed Regulation .03C of this chapter; or

D. The purchase of additional coverages, endorsements, or limits for an existing policy during its renewal period, subject to any change becoming effective on the renewal date of the policy. For the purpose of section, “renewal period” means the 45-day period immediately prior to the renewal date of a policy.

History

Administrative History: Effective date: March 22, 2010 (37:6 Md. R. 480)
Administrative History: Regulation .02 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .03 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .04 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .05 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 repealed effective November 24, 2016 (43:23 Md. R. 1281)
Authority: Insurance Article, §§2-108, 2-109, 19-107, and 27-501, Annotated Code of Maryland

COMAR 31.08.12.05 Deactivating a Temporary Moratorium.

A. An insurer shall regularly monitor its activated temporary moratorium.

B. A temporary moratorium that is activated based on an event listed under Regulation .03C(1) of this chapter may not continue for more than 24 hours after the termination of the last hurricane or tropical storm watch, warning, or advisory issued by the National Weather Service for part of the State or the entire State.

C. Earthquake.

(1) A temporary moratorium that is activated because of an earthquake under Regulation .03C(5) of this chapter shall be deactivated no later than 72 hours after the onset of the earthquake.

(2) An aftershock that measures 5.0 or greater on the Richter scale that occurs during a temporary moratorium that was activated because of an earthquake under Regulation .03C(5) of this chapter may be treated as the onset of a new earthquake, resulting in the beginning of a new 72-hour period during which an insurer may continue to suspend binding authority.

D. Except as otherwise provided under §G of this Regulation, a temporary moratorium that is activated based on a declaration of a State of Emergency by the Governor or other governmental entity for part of the State or the entire State ends at the expiration of the State of Emergency.

E. Except as otherwise provided under §G of this Regulation, a temporary moratorium that is activated based on the announcement of an evacuation, whether mandatory or voluntary, for part of the State or the entire State ends at the expiration of the evacuation period.

F. Except as otherwise provided under §G of this Regulation, a temporary moratorium that is activated based on the imposition of a special curfew for part of the State or the entire State ends at the expiration of the special curfew.

G. The Commissioner may order the end of a temporary moratorium before the expiration of a State of Emergency, evacuation period, or special curfew, if the Commissioner determines that there is no longer a need for the temporary moratorium for purposes of enforcing the Insurance Article.

History

Administrative History: Effective date: March 22, 2010 (37:6 Md. R. 480)
Administrative History: Regulation .02 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .03 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .04 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .05 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 amended effective April 14, 2014 (41:7 Md. R. 423)
Administrative History: Regulation .06 repealed effective November 24, 2016 (43:23 Md. R. 1281)
Authority: Insurance Article, §§2-108, 2-109, 19-107, and 27-501, Annotated Code of Maryland

31.08.13 Application of a Percentage Deductible in the Case of a Hurricane

COMAR 31.08.13.01 Purpose.

The purpose of this chapter is to implement Insurance Article, §§19-209 and 19-209.1, Annotated Code of Maryland.

History

Administrative History: Effective date: June 23, 2014 (41:12 Md. R. 669)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2017 (44:7 Md. R. 357)
Authority: Insurance Article, §§2-109, 19-209, and 19-209.1, Annotated Code of Maryland

COMAR 31.08.13.02 Applicability.

A. This chapter applies to all property and casualty insurers authorized to write homeowner’s insurance policies in Maryland.

B. This chapter applies to any policy of homeowner’s insurance that provides a percentage deductible.

History

Administrative History: Effective date: June 23, 2014 (41:12 Md. R. 669)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2017 (44:7 Md. R. 357)
Authority: Insurance Article, §§2-109, 19-209, and 19-209.1, Annotated Code of Maryland

COMAR 31.08.13.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Delivery by electronic means” includes:

(a) Delivery to an electronic mail address at which a party has consented to receive notice; and

(b) Posting on an electronic network, together with separate notice to a party directed to the electronic mail address at which the party has consented to receive notice of the posting.

(2) Homeowner’s Insurance.

(a) “Homeowner’s insurance” means insurance for residential property that provides one or more of the following coverages:

(i) Fire;

(ii) Extended coverage;

(iii) Vandalism and malicious mischief;

(iv) Burglary;

(v) Theft; or

(vi) Personal liability.

(b) “Homeowner’s insurance” does not include:

(i) An umbrella policy; or

(ii) Property insurance or casualty insurance issued to an individual, a sole proprietor, partnership, corporation, limited liability company, or similar entity and intended to insure against loss arising from the business pursuits of the insured entity.

(3) “Hurricane warning” means a warning by the National Hurricane Center of the National Weather Service that hurricane conditions are expected in any part of the State.

(4) “National Hurricane Center of the National Weather Service” includes:

(a) The National Hurricane Center in Miami, Florida; and

(b) A regional National Weather Service Forecast Office covering any part of the State.

(5) “Percentage deductible” means a deductible equal to a percentage of the Coverage A — Dwelling Limit of a homeowner’s insurance policy.

(6) Residential Property.

(a) “Residential property” means property that is used primarily as a residence.

(b) “Residential property” includes:

(i) A residence written on a personal farmowner’s policy form;

(ii) A condominium unit;

(iii) A mobile home; and

(iv) A multiunit building if one of the units is occupied by the owner of the building and not more than three units are occupied by tenants.

(7) “Underwriting standards” means:

(a) Underwriting manuals, including any amendments or supplements to underwriting manuals; and

(b) The generally accepted practices of an insurer contained in written underwriting instructions, guidelines, and rules that the insurer provides for use by its underwriters and insurance producers as standards for acceptance of risk.

History

Administrative History: Effective date: June 23, 2014 (41:12 Md. R. 669)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2017 (44:7 Md. R. 357)
Authority: Insurance Article, §§2-109, 19-209, and 19-209.1, Annotated Code of Maryland

COMAR 31.08.13.04 Underwriting Standard.

A. An insurer may not adopt or amend an underwriting standard that requires a hurricane percentage deductible that exceeds 5 percent unless the insurer has filed the underwriting standard or the amendment to the underwriting standard with the Commissioner.

B. If an insurer withdraws an underwriting standard that requires a percentage deductible that exceeds 5 percent, the insurer shall notify the Commissioner in writing within 10 days of the withdrawal.

C. An insurer that makes a filing under §A of this regulation shall include the following information in the filing:

(1) The insurer’s NAIC number;

(2) A copy of the underwriting standard the insurer proposes to adopt, the amendment to an underwriting standard currently in use, or notice of withdrawal of an underwriting standard currently in use;

(3) The date on which the insurer intends to adopt, amend, or withdraw the underwriting standard;

(4) All of the data on which the insurer relied in developing the proposed underwriting standard, amendment to the underwriting standard, or withdrawal of the underwriting standard;

(5) A copy of each page in the insurer’s rating manual that relates to the underwriting standard;

(6) A copy of any underwriting standard with a percentage deductible currently in use by the insurer for homeowner’s insurance, including any SERFF tracking number associated with the underwriting standard, or a statement that the insurer does not currently have an underwriting standard with a percentage deductible for homeowner’s insurance; and

(7) Any other information the Commissioner considers necessary.

History

Administrative History: Effective date: June 23, 2014 (41:12 Md. R. 669)
Administrative History: ——————
Administrative History: Chapter revised effective April 10, 2017 (44:7 Md. R. 357)
Authority: Insurance Article, §§2-109, 19-209, and 19-209.1, Annotated Code of Maryland

31.08.14 Coverage for Loss Caused by Water That Backs Up Through Sewers or Drains

COMAR 31.08.14.01 Scope.

This chapter does not apply to loss that is caused by a flood.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Administrative History: Regulation .03D adopted effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 19-202, and 19-216(d), Annotated Code of Maryland

COMAR 31.08.14.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Backs up” means reverses course, discharges, escapes, overfills, or overflows.

(2) “Drain” means a line, pipe, or any other part of a system that:

(a) Is located inside or outside of a dwelling; and

(b) Drains water away from the dwelling.

(3) “Dwelling coverage” means coverage under a policy of homeowner’s insurance for losses resulting from damage to:

(a) The dwelling of the policyholder; and

(b) Any structure of the policyholder that is attached to the dwelling.

(4) Flood.

(a) “Flood” means a general and temporary condition of partial or complete inundation of normally dry land areas from:

(i) The overflow of inland or tidal waters;

(ii) The unusual and rapid accumulation or runoff of surface water from any source; or

(iii) Mudslides that are proximately caused by the unusual and rapid accumulation or runoff of surface water from any source and are similar to a river of liquid and flowing mud on the surface of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current.

(b) “Flood” includes a general and temporary condition of partial or complete inundation of normally dry land areas from the overflow of inland or tidal waters due to the collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by:

(i) Waves or currents of water exceeding anticipated cyclical levels or suddenly caused by an unusually high water level in a natural body of water, accompanied by a severe storm;

(ii) An unanticipated force of nature, such as a flash flood or abnormal tidal surge; or

(iii) A similarly unusual and unforeseeable event.

(5) Homeowner’s Insurance.

(a) “Homeowner’s insurance” means insurance for residential property provided under:

(i) A homeowner’s policy;

(ii) A condominium owner’s policy;

(iii) A mobile homeowner’s policy;

(iv) A renter’s policy; or

(v) A noncommercial farm owner’s policy.

(b) “Homeowner’s insurance” does not include an umbrella policy.

(6) “Loss-of-use coverage” means coverage under a policy of homeowner’s insurance for loss of use of the policyholder’s dwelling.

(7) “Other structure coverage” means coverage under a policy of homeowner’s insurance for losses resulting from damage to a structure of the policyholder that is on the same property as the policyholder’s dwelling, but is not attached to the dwelling.

(8) “Personal property coverage” means coverage under a policy of homeowner’s insurance for losses resulting from damage to personal property that is owned by the policyholder or used by the policyholder.

(9) “Sewer” means an underground conduit used to carry off water and waste matter.

(10) “Water” includes sewage and other waterborne waste matter.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Administrative History: Regulation .03D adopted effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 19-202, and 19-216(d), Annotated Code of Maryland

COMAR 31.08.14.03 Offer of Coverage.

A. An insurer that issues, sells, or delivers a policy of homeowner’s insurance in the State shall at the time of application and renewal offer in writing to provide coverage for loss that:

(1) Is caused by or results from water that backs up into a dwelling or other covered structure through a sewer or drain, regardless of the origin of the water; and

(2) Is not caused by the negligence of the insured.

B. An insurer that is required to offer coverage under §A of this regulation shall offer the coverage for loss that is caused by or results from water that backs up through a sewer or drain with limits equal to the limits of liability for dwelling coverage, other structure coverage, personal property coverage, and loss-of-use coverage under the policy of homeowner’s insurance.

C. If an insurer makes an offer of coverage that meets the requirements of §B of this regulation, the insurer also may offer the coverage for loss that is caused by or results from water that backs up through a sewer or drain with:

(1) Limits that are less than the limits for dwelling coverage, other structure coverage, personal property coverage, and loss-of-use coverage under the policy of homeowner’s insurance; or

(2) A combined single limit for dwelling coverage, other structure coverage, personal property coverage, and loss-of-use coverage that is equal to or less than the highest limit of liability under the policy of homeowner’s insurance.

D. The offer of coverage required by §A of this regulation may be met by using the form under COMAR 31.08.18.02.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Administrative History: Regulation .03D adopted effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 19-202, and 19-216(d), Annotated Code of Maryland

31.08.15 Underwriting Period

COMAR 31.08.15.01 Scope.

This chapter applies only to a binder or policy, other than a renewal policy, of personal insurance, commercial property insurance, or commercial liability insurance.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Delivery by electronic means” includes:

(a) Delivery to an electronic mail address at which a party has consented to receive notice; and

(b) Posting on an electronic network, together with separate notice to a party directed to the electronic mail address at which the party has consented to receive notice of the posting.

(2) Material Risk Factor.

(a) “Material risk factor” means a risk factor that:

(i) Was incorrectly recorded or not disclosed by the insured in an application for insurance;

(ii) Was in existence on the date of the application; and

(iii) Modifies the premium charged on the policy or binder in accordance with the rates and supplementary rating information filed by the insurer under Insurance Article, Title 11, Subtitle 3, Annotated Code of Maryland.

(b) “Material risk factor” does not include:

(i) Information that constitutes a material misrepresentation; or

(ii) A change initiated by an insured, including any request by the insured that results in a change in coverage, change in deductible, or other change to a policy.

(3) “Personal insurance” means property insurance or casualty insurance issued to an individual, trust, estate, or similar entity that is intended to insure against loss arising principally from the personal, noncommercial activities of the insured.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.03 Underwriting Period.

A. A binder or policy is subject to a 45-day underwriting period beginning on the effective date of coverage.

B. With respect to an account that contains multiple binders or policies, each binder or policy in the account is subject to a separate 45-day underwriting period beginning on the effective date of coverage for that binder or policy.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.04 Discovery of Material Risk Factor During Underwriting Period.

A. If an insurer discovers a material risk factor during the underwriting period, the insurer shall recalculate the premium for the policy or binder based on the material risk factor as long as the risk continues to meet the underwriting standards of the insurer in accordance with the rates and supplementary rating information filed under Insurance Article, Title 11, Subtitle 3, Annotated Code of Maryland.

B. Notice of Recalculated Premium.

An insurer that recalculates a premium under §A of this regulation shall provide a written notice to the insured that states:

(1) The amount of the recalculated premium;

(2) The reason for the increase or reduction in the premium in accordance with §C of this regulation; and

(3) That the insured has the right to terminate the policy and receive a pro rata refund of any premium paid by notifying the insurer of the termination.

C. Reason for Increase or Reduction in Premium.

(1) In stating the reasons for the increase or reduction in the premium, the insurer shall identify each material risk factor that was discovered during the 45-day underwriting period and,

for each material risk factor, provide an explanation why the material risk factor required the premium to be recalculated in language that is reasonably understandable to the average policyholder.

(2) Examples of acceptable reasons required by §C(1) of this regulation include, but are not limited to:

(a) Premium recalculated due to [NAME OF DRIVER] moving violation on [DATE OF EVENT];

(b) Safe driver discount removed due to [NAME OF DRIVER] at fault loss on [DATE OF EVENT];

(c) [NAME OF DRIVER] was not listed on the application. Policy must be re-rated or signed driver exclusion must be completed;

(d) Applicant does not currently have an automobile policy with the Company, Multi Policy Discount removed;

(e) Policy was issued without the auto/home discount; or

(f) Premium recalculated due to lack of a central alarm system.

(3) The use of generalized phrases such as “change in prior insurance status,” “change in vehicle symbol,” or “change in protection code” does not meet the requirements of §C(1) of this regulation.

D. Form of Notice.

(1) An insurer that is required to provide a notice of recalculated premium under §B of this regulation shall provide the notice to an insured on:

(a) The form contained in Regulation .05 of this chapter; or

(b) A form that is filed with and approved by the Commissioner.

(2) If an insurer utilizes a form other than the one contained in Regulation .05 of this chapter, the form shall:

(a) Include a statement that the insured may contact the insurer or, if applicable, the insured’s insurance producer for additional information concerning the reason for the insurer’s action and how the action affected the premium charged; and

(b) Provide the telephone number for the insurer that the insured may use to obtain additional information about the insurer’s action, or, in lieu of the insurer’s contact information, provide the telephone number for the insured’s insurance producer.

(3) If an insurer includes a notice of recalculated premium on a form that contains other information, the insurer shall:

(a) Place the notice of recalculated premium in a conspicuous location on the form; and

(b) Print the text of the notice of recalculated premium in at least 12-point type.

E. Delivery of Notice.

(1) An insurer that is required to provide a written notice under §B of this regulation shall send the notice to the policyholder not later than the end of the 45-day underwriting period by:

(a) First-class mail tracking method; or

(b) Delivery by electronic means in accordance with Insurance Article, §27-601.2, Annotated Code of Maryland.

(2) An insurer may send the notice required under §B of this regulation to the policyholder with the policy, declarations page, or any other document that the insurer sends to the policyholder.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.05 Notice of Recalculated Premium Form.

FORM AT END OF CHAPTER

Cross References

31.08.15.04D(1)(a)

31.08.15.04D(2)

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.06 Cancellation of Binder or Policy During Underwriting Period.

A. An insurer may cancel a binder or policy during the 45-day underwriting period if the risk does not meet the underwriting standards of the insurer.

B. Cancellation for Reason Other than Nonpayment of Premium.

(1) Except as provided in §B(2) of this regulation, an insurer that cancels a policy or binder under this regulation for a reason other than nonpayment of premium shall:

(a) Provide the insured with a written notice of cancellation that clearly and specifically states the insurer’s actual reason for the cancellation; and

(b) Send the notice of cancellation to the named insured’s last known address by a first- class mail tracking method not less than 15 days before the effective date of the cancellation.

(2) With respect to workers’ compensation insurance, an insurer that cancels a policy or binder under this regulation for a reason other than nonpayment of premium shall:

(a) Provide the insured with a written notice of cancellation that clearly and specifically states the insurer’s actual reason for the cancellation;

(b) Send the notice of cancellation to the named insured’s last known address by a first-class mail tracking method not less than 15 days before the effective date of the cancellation; and

C. Cancellation for Nonpayment of Premium.

(1) An insurer that cancels a policy or binder under this regulation for nonpayment of premium shall:

(a) Provide the insured with a written notice of cancellation that states the insurer’s intent to cancel the policy or binder for nonpayment of premium; and

(b) Send the notice of cancellation to the named insured’s last known address by a first-class mail tracking method not less than 10 days before the effective date of the cancellation.

(2) In the case of a policy or binder of workers’ compensation insurance, the insurer shall comply with the requirements of §C(1) of this regulation and shall file a copy of the notice of cancellation with the designee of the Workers’ Compensation Commission.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.07 Refund of Premium.

If an insured terminates a policy following receipt of a notice of recalculated premium, the insurer shall refund to the insured any premium paid by the insured on a pro rata basis.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.08 Notice of Ability to Cancel Binder or Policy or Recalculate Premium.

At the time of application or when a binder or policy is issued, an insurer shall provide written notice of its ability to cancel a binder or policy or recalculate the premium from the effective date of the policy during the underwriting period.

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

COMAR 31.08.15.09 Premium Audit.

Nothing in this chapter prohibits an insurer from:

A. Conducting an audit in accordance with the provisions of a policy; or

B. Charging and collecting the appropriate premium based on the results of the audit in accordance with the rates and supplementary rating information filed by the insurer under Insurance Article, Title 11, Subtitle 3, Annotated Code of Maryland.

Attachments

31.08.15.05-form

History

Administrative History: Effective date: June 9, 2014 (41:11 Md. R. 606)
Administrative History: Regulation .04 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .05 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06B, C amended effective November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §§2-109, 11-205, 11-306, 12-106, and 19-406, Annotated Code of Maryland

31.08.16 Notice of Amount of Renewal and Expiring Policy Premiums

COMAR 31.08.16.01 Purpose.

The purpose of this chapter is to ensure that an insurer properly notifies the named insured and insurance producer of the amount of a policy’s renewal and expiring premiums in accordance with Insurance Article, §27-607, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Authority: Insurance Article, §§2-109, 4-113, 27-607, and 27-612, Annotated Code of Maryland

COMAR 31.08.16.02 Applicability.

This chapter applies to all policies of personal insurance and insurance issued under the Maryland Property Insurance Availability Act or any similar act instituted to ensure the availability of property insurance.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Authority: Insurance Article, §§2-109, 4-113, 27-607, and 27-612, Annotated Code of Maryland

COMAR 31.08.16.03 Definitions.

A. In this chapter the following terms have the meanings indicated.

B. Terms Defined.

(1) “Expiring premium” means:

(a) The dollar amount of the premium charged at the beginning of the expiring policy term; and

(b) If different, the dollar amount of the premium:

(i) Charged at the time the insurer issues the notice required by Regulation .04 of this chapter; and

(ii) Stated on an annualized basis.

(2) “Insurer” means an authorized property or casualty insurer that issues or delivers a policy of personal insurance in the State or a policy issued under the Maryland Property Insurance Availability Act or any similar act instituted to ensure the availability of property insurance.

(3) “Maryland Property Insurance Availability Act” means insurance described in Insurance Article, Title 25, Subtitle 4, Annotated Code of Maryland.

(4) “Personal insurance” means a policy of property insurance or casualty insurance as defined by Insurance Article, §27-601(c), Annotated Code of Maryland.

(5) “Renewal premium” means the dollar amount of the premium to be charged for the next policy term.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Authority: Insurance Article, §§2-109, 4-113, 27-607, and 27-612, Annotated Code of Maryland

COMAR 31.08.16.04 Procedures and Requirements.

A. At least 45 days prior to the renewal date of a policy subject to this chapter, an insurer shall send written notice to the named insured and the insurance producer of the policy.

B. The notice required under §A of this regulation:

(1) Shall be clear and specific;

(2) Shall state the dollar amount or amounts of the policy’s expiring premium;

(3) Shall state the dollar amount of the policy’s renewal premium;

(4) Shall be sent either by first class mail or delivered by electronic means pursuant to the requirements of Insurance Article, §27-601.2, Annotated Code of Maryland; and

(5) May be sent together with the renewal policy and may be included on the declarations page of the renewal policy.

Cross References

31.08.16.03B(1)(b)(i)

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Authority: Insurance Article, §§2-109, 4-113, 27-607, and 27-612, Annotated Code of Maryland

COMAR 31.08.16.05 Penalties.

Penalties for violations of these regulations shall be assessed in accordance with Insurance Article, §§4-113 and 27-612, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 2015 (41:21 Md. R. 1261)
Authority: Insurance Article, §§2-109, 4-113, 27-607, and 27-612, Annotated Code of Maryland

31.08.17 Statement of Actual Reason for Cancellation or Nonrenewal of Commercial Insurance Policy

COMAR 31.08.17.01 Scope.

A. This chapter applies only to policies of commercial insurance.

B. This chapter does not apply to:

(1) A policy in effect for 45 days or less, as provided in Insurance Article, §12-106, Annotated Code of Maryland; or

(2) A policy issued to an exempt commercial policyholder under Insurance Article, §11-206, Annotated Code of Maryland, if the policy provides for written notice of not less than 30 days of the insurer’s intent to cancel or refusal to renew.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109 and 27-605, Annotated Code of Maryland

COMAR 31.08.17.02 Definitions.

A. In this chapter the following term has the meaning indicated.

B. Commercial Insurance Defined.

(1) “Commercial insurance” means property insurance or casualty insurance:

(a) Issued to an individual, sole proprietor, partnership, corporation, limited liability company, or similar entity; and

(b) Intended to insure against loss arising from the business pursuits of the insured entity.

(2) “Commercial insurance” does not include:

(a) A policy issued by the Maryland Automobile Insurance Fund;

(b) A policy issued by the Joint Insurance Association;

(d) Title Insurance.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109 and 27-605, Annotated Code of Maryland

COMAR 31.08.17.03 Statement of Actual Reason.

A. Whenever an insurer cancels or refuses to renew a policy of commercial insurance for a reason other than nonpayment of premium, the insurer shall provide to the named insured a written statement of the actual reason for the cancellation or refusal to renew.

B. An insurer shall include in a statement of actual reason:

(1) An offer to provide additional information in support of the proposed action on the written request of the insured;

(2) A notice that if the insured would like additional information in support of the proposed action, the insured is required to send the written request for additional information within 30 days after the date of the statement of actual reason; and

(3) An address for the insured to submit the written request for additional information.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109 and 27-605, Annotated Code of Maryland

31.08.18 Homeowner's Insurance Notice

COMAR 31.08.18.01 Purpose.

The purpose of this chapter is to provide the form that insurers may use to comply with the requirements of Insurance Article, §§19-202, 19-205(a)(4)(vii), 19-210(f), 19-214(a), 19-216, and 27-501(n)(2), Annotated Code of Maryland.

History

Administrative History: Effective date: November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §19-216, Annotated Code of Maryland

COMAR 31.08.18.02 Homeowner’s Insurance Notice — Form.

Form located at end of chapter

Cross References

31.08.14.03D

31.15.10.04E

History

Administrative History: Effective date: November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §19-216, Annotated Code of Maryland

COMAR 31.08.18.03 No Private Cause of Action.

This chapter does not create a private cause of action for a violation of this chapter.

Attachments

31.08.18.02

History

Administrative History: Effective date: November 6, 2017 (44:22 Md. R. 1038)
Authority: Insurance Article, §19-216, Annotated Code of Maryland

31.09 LIFE INSURANCE AND ANNUITIES

31.09.01 Wholesale Life Insurance

COMAR 31.09.01.01 Definition.

A. “Wholesale life insurance” means life insurance distributed on a mass merchandising basis and administered by group methods provided, with or without evidence of insurability, by individual policies and made available to employees or members under a program sponsored by:

(1) An employer;

(2) An association of employers;

(3) A union or association of unions;

(4) An association of persons having the same occupation or profession;

(5) An association of civil service employees;

(6) A religious, charitable, recreational, educational, civic, or fraternal organization or association;

(7) A school;

(8) A sports team;

(9) A volunteer fire department; or

(10) Any substantially similar group approved by the Commissioner.

B. The program may also cover dependents of the employees or members.

C. As used in this chapter, the term “wholesale life insurance policy” does not include policies issued in connection with:

(1) Employee benefit trusts and plans forming part of a retirement, stock bonus, pension, profit-sharing, annuity, deferred compensation, disability, or death benefit plan established by an employer for the benefit of some or all of his employees or their dependents or beneficiaries qualified or exempt under the United States Internal Revenue Code of 1954, as amended from time to time;

(2) Employee trusts and plans established under the Federal Self-Employed Individuals Tax Retirement Act of 1962;

(3) Tax sheltered annuity programs for certain organizations exempt from federal income tax and for public schools; and

(4) Buy-and-sell agreements.

D. An arrangement for premium payment such as salary deduction, salary savings, or payroll allotment may not in and of itself cause a policy to be classified as wholesale life insurance. Except where the context indicates otherwise, references to policy in this chapter shall refer to a wholesale life insurance policy.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.02 Plan of Insurance.

Wholesale life insurance policies may be issued on the yearly or more frequently renewable term plan or on any other term or on any whole life or endowment plan. If the policy is issued on the yearly or more frequently renewable term plan or any other term plan, it shall contain the right of renewal to at least age 65 nearest birthday (subject, however, to the insurer's right to refuse renewal in accordance with Regulation .05 of this chapter), and shall contain the right to convert to a whole life or endowment plan after termination of the final term period. However, the policy need not provide the privilege of renewal of term insurance on a dependent child beyond age 19 nearest birthday. Whenever the policy is not eligible for renewal as a wholesale life insurance policy, it shall contain such additional conversion rights as are hereinafter set forth if written on a yearly or more frequently renewable term basis or, if written on other than a yearly or more frequently renewable term basis, shall give the insured employee or member the right to continue the insurance under the original policy at the same premium, or at a stated higher premium which may not exceed rates charged by the insurer for ordinary policies issued under the same policy plan of insurance for the same class of risk.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.03 Premium Rates.

A. Premium rates for wholesale life insurance policies may be less than rates customarily charged by the insurer for ordinary policies issued under the same policy plan of insurance for the same class of risk.

B. Policies Issued on the Yearly or More Frequently Renewable Term Plan. The policy shall contain a table of renewable premiums for all ages up to the limiting age for renewal. Ages may be grouped for the purpose of premium rates either by one group for ages under 40 or by decennial (10-year) or smaller age groupings for ages under 40, and by quinquennial (5-year) or smaller age groupings for ages 40 to 75. The insurer may reserve the right to change the table of rates upon 30 days prior written notice to the sponsor and to the insured employee or member, the change to become effective on a premium due date or on a policy renewal date specified in the notice, but an increase in rates may not become effective within 1 year after issue of the policy or after the effective date of any prior change in the table of rates.

C. Policies Issued on Other Than the Yearly or More Frequently Renewable Term Plan. A policy issued on other than the yearly or more frequently renewable term plan shall have premium rates guaranteed in the policy. These rates may not be changed while the policy is continued as a wholesale life insurance policy. However, the insurer may make a change in its schedule of premium rates to be effective for policies issued after the effective date of the change to employees or members of the same sponsor.

D. Nondiscrimination. Premium rates shall be self-supporting on reasonable assumptions as to mortality, interest, and expense and may not unfairly discriminate between any class or classes of persons insured.

E. Experience Refund. An insurer may grant experience refunds to a case either retrospectively or prospectively, if all wholesale life insurance cases of the same class are experience rated by the insurer on a equitable basis taking into consideration size, credibility, and other relevant factors.

Cross References

31.09.01.06

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.04 Permissible Cases.

A. Evidence of Insurability. The insurer may require evidence of insurability on individual lives.

B. Contributory and Noncontributory. Premiums for the policies may be paid by the sponsor or by the employee or member insured, or partly by the sponsor and partly by the employee or member insured.

C. Employer Sponsored Case.

(1) The class or classes of persons to be insured initially shall consist of not less than two employees. An employer sponsored case which meets the qualifications for a group life insurance policy under Insurance Article, Title 17, Annotated Code of Maryland, as amended to date, and under which more than 32 employees are initially eligible, may not be written on a wholesale life insurance basis. The term “employees” may include:

(a) Directors and officers, if the employer is a corporation;

(b) An individual proprietor or partner, if the employer is an individual proprietor or a partnership;

(d) Retired employees.

(2) For purposes of this chapter, employees of affiliated corporations, proprietorships, or partnerships under common control may be regarded as employees of the employer.

D. Other Sponsors. If a sponsor is other than an employer, the case may be written only if the persons, excluding dependents, to be initially insured shall number at least five, and if the number of persons, excluding dependents, initially eligible exceeds 32, only if the case does not qualify for a group life insurance policy under Insurance Article, Title 17, Annotated Code of Maryland, as amended to date.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.05 Right to Refuse Renewal.

A. The insurer may reserve the right to nonrenew a policy in the wholesale life insurance category only for one or more of the following reasons as may be specified in the policy:

(1) Nonpayment of premium;

(2) Termination of the employee's employment with the sponsor, or the termination of his employment in an eligible class of employees of the sponsor;

(3) The termination of membership in the sponsor, or the termination of membership in an eligible class of membership of the sponsor, or when a member ceases to practice the profession or occupation with respect to which the policy was issued;

(4) The maturity of the policy, or the attainment of the limiting age for renewal stated in the policy;

(5) The nonrenewal at the request of the sponsor of all policies issued in the case;

(6) The nonrenewal by the insurer of all policies issued to employees or members of the sponsors, the nonrenewal to be effective on a premium due date or on a renewal date following the insurer's giving at least 60 days prior written notice to the sponsor and to each employee or member insured; or

(7) Any other condition for nonrenewal approved by the Commissioner.

B. Written notice under §A of this regulation may be given by timely mailing of the notice to the employee or member insured at his most recent address known to the insurer or to the sponsor.

C. Effective Date of Nonrenewal. Termination or nonrenewal of a wholesale life insurance policy for a reason other than nonpayment of premium may not be made effective on a date other than a premium due date or a policy renewal date.

Cross References

31.09.01.02

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.06 Notice of Conversion.

Whenever a conversion privilege is available under the policy or whenever a policy which is not eligible for renewal as a wholesale life insurance policy may be continued by payment of an increased premium, the insurer shall give the individual employee or member insured written notice of the right to convert or continue. The notice shall be given not more than 60 days before or more than 15 days after the termination or nonrenewal of insurance under the wholesale life insurance policy. If the notice is given more than 15 days after termination or nonrenewal of insurance, the time allowed for the exercise of the privilege of conversion or payment of the increased premium shall be extended for 15 days after the giving of the notice, but not beyond 90 days after the termination or nonrenewal of insurance. An extension of the time to convert or continue the policy does not operate to extend the coverage beyond the period stated in the policy, unless the policy specifically provides for an extension of the coverage. Written notice under this provision may be given by timely mailing of the notice to the employee or member insured at the employee's or member's most recent address known to the insurer or to the sponsor. Notice described in this regulation is not required when the policy may be continued as a wholesale life insurance policy with the same sponsor at an increased premium which is called for in the policy's schedule of premiums because of an increase in the attained age of the person insured or because of a change in the table of rates stated in the policy. In event of a change in the table of rates, notice shall be given as set forth in Regulation .03B of this chapter.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.07 Brief Description.

Each wholesale life insurance policy shall have legibly inscribed on the first page a brief description which shall include the word “wholesale” and such other information as may be required by Insurance Article, §16-213, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.08 Policy Provisions.

A. With respect to each insured employee or member, an individual policy which identifies the insured employee or member by name shall be issued covering himself or his dependents, or both. The policy shall contain all of the provisions required by §§B—M of this regulation, except that any provision or portion thereof which in the opinion of the Commissioner is not applicable to the plan of insurance shall, to the extent inapplicable, not be incorporated in the policy. In lieu of any of the provisions required by this chapter, the Commissioner may approve any provision which he deems more favorable to the policyholder.

B. Grace Period. A grace period of not less than 30 days shall be allowed within which the payment of any premium payable under the policy (except the first premium) may be made, during which grace period the policy shall continue in full force. If a claim arises under the policy during the grace period, the insurer may deduct the amount of any premium due from the policy proceeds.

C. Incontestability. The policy shall be incontestable as to life insurance benefits (exclusive of additional benefits relating to disability or accidental death), except for nonpayment of premium, after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue.

D. Entire Contract. The policy shall provide that it, or it together with any application for a policy if a copy of the application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the insurer and the policyholder, and if the application is so made a part of the policy, that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.

E. Misstatement of Age. The policy shall provide that if the age of the insured or any other person whose age is considered in determining the premium or benefit has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.

F. Payment of Claims. The policy shall provide that any benefits becoming payable by reason of the death of the insured shall be made to the person entitled to them upon receipt of due proof of death.

G. Beneficiary. The policy shall have endorsed on it, or on an application attached to it, the name of the beneficiary and reserve to the policy owner the right to change the beneficiary unless the owner elects to designate a beneficiary irrevocably. The policy may also provide that if the beneficiary designated in the policy does not make a claim under the policy or does not surrender the policy with due proof of death within the period stated in the policy, which may not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured, or is a minor, or dies before the insured, or is not legally competent to give a valid release, then the insurer may make any payment under the policy to the estate of the insured, or to any relative of the insured by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to payment by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention, or burial of the insured. The policy may also include a similar provision applicable to any other payment due under the policy. At the option of the insurer, the policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, or otherwise accepted by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. If the policy provides that the proceeds may be payable in installments or as an annuity, the policy shall include a table showing the amount and period of the installment or annuity if determinable at issue.

H. Reinstatement. The policy shall provide that unless it has been surrendered for its cash surrender value, or its cash surrender value has been exhausted by reason of policy indebtedness, or the paid-up term insurance, if any, has expired, the policy may be reinstated at any time within 3 years from the due date of the first premium in default upon written application to the insurer and the production of evidence of insurability satisfactory to the insurer, and the payment of all premiums in arrears and payment or reinstatement of any other indebtedness to the insurer upon the policy and the payment of interest at a specified rate not exceeding an effective rate of 6 percent per annum compounded annually on all premiums in arrears and indebtedness.

I. Nonforfeiture Values. The policy shall contain nonforfeiture provisions not less favorable to the policyholder in every respect than those required under Insurance Article, Title 16, Subtitle 3, Annotated Code of Maryland, for a policy of ordinary life insurance issued on the same plan of insurance and containing the same benefits.

J. Policy Loans. The policy shall contain a provision that after 3 full years premiums have been paid and after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment, the insurer will advance, on proper assignment or pledge of the policy and on the sole security of the policy, at a specified rate of interest not exceeding an effective rate of 6 percent per annum, an amount equal to or, at the option of the person entitled to payment, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then current policy year, provided that the insurer may deduct, either from the loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining the cash surrender value including any interest then accrued but not due, any unpaid balance of the premium for the current policy year, and interest on the loan to the end of the current policy year. The policy may also provide that if interest on any indebtedness is not paid when due, it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value of the policy, then the policy shall terminate and become void, but not until at least 30 days notice has been mailed by the insurer to the last known address of the insured or policy owner and of any assignee of record at the home office of the insurer. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for 6 months after application therefor. The policy, at the insurer's option, may provide for automatic premium loan, subject to an election of the person entitled to elect. At the option of the insurer, this provision may be omitted in a policy of term life insurance.

K. Dividends.

(1) If the policy is issued on a participating basis, it shall provide that the insurer shall annually ascertain and apportion any divisible surplus under the policy which will accrue on the policy anniversary or other dividend date specified in the policy and that dividends arising from this apportionment shall be credited annually beginning not later than the end of the third policy year. The payment of any dividend payable on or after the end of the third policy year may not be made contingent upon the payment of any premium due on or after the date when the dividend becomes payable.

(2) The policy shall provide that the person entitled to the dividend shall have the right, at his option, to have the dividend arising from the participation:

(a) Paid in cash;

(b) Applied to the payment of premium if any then be due;

(d) Left to accumulate at a rate of interest not less than that specified in the policy.

(3) However, in the case of a term policy, the policy need not provide the options of §K(2)(c) or (d) of this regulation.

(4) The policy shall further provide that a specified option shall become effective if the person entitled to the dividend fails to notify the insurer in writing of his election not later than 30 days following the date on which any dividend is payable.

L. Conversion on Termination of Eligibility. A yearly or more frequently renewable term wholesale life insurance policy shall contain a provision that if the coverage is not continued as a wholesale life insurance policy because the employee or dependent has attained the limiting age or because of termination of employment with the sponsor or termination in an eligible class of employees, or termination of membership in the sponsor, or termination of membership in an eligible class of membership of the sponsor or where a member ceases to practice the profession or occupation with respect to which the policy was issued, the persons covered under the policy shall be entitled to have issued to them by the insurer, without evidence of insurability, individual policies of life insurance without disability or accidental death benefits, provided:

(1) Application for the individual policy shall be made and the first premium paid to the insurer within 31 days after the termination or attainment of a limiting age;

(2) The individual policy shall, at the option of the person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for;

(3) The individual policy shall be in an amount not in excess of the amount of life insurance which is discontinued under the wholesale life insurance policy, less the amount of any life insurance for which the person is or becomes eligible under the same or any other wholesale life or group life insurance policy within 31 days after the discontinuance; and

(4) The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which the person then belongs, and to his age attained on the effective date of the individual policy.

M. Conversion on Termination or Nonrenewal of Case. A yearly or more frequently renewable term wholesale life insurance policy shall contain a provision that if the policy is not continued as a wholesale life insurance policy because of nonrenewal of the case by the insurer or by the sponsor, every employee, member, or dependent insured at the date of discontinuance who has been so insured for at least 5 years before discontinuance shall be entitled to have issued to him by the insurer an individual policy of life insurance subject to the same conditions provided in §L of this regulation, except that the amount of insurance on that person under the converted policy may not exceed the smaller of:

(1) The amount of the person's protection terminating under the wholesale life insurance policy less the amount of any life insurance for which he is or becomes eligible under any group life or wholesale life insurance policy issued or reinstated by the same or another insurer within 31 days after discontinuance; or

(2) $2,000.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.09 Combination of Life and Health Insurance.

A wholesale life insurance policy may include, or may provide by rider, health insurance benefits, in which case the policy shall contain provisions relating to the health insurance which may not be less favorable to the insured employee or member than the applicable provisions required under Insurance Article, Title 15, Annotated Code of Maryland, and under any applicable regulations issued thereunder for a policy providing similar benefits. Upon discontinuance of the policy as a wholesale life insurance policy, any health insurance benefits originally provided may not be included in any conversion privilege unless the insurer, at its option, shall so provide, in which case the provision in the policy regarding the conversion privilege shall clearly indicate the extent of health insurance benefits which may be continued after the policy ceases to be a wholesale life insurance policy.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.10 Policy Restrictions.

A. Prohibited Provisions. A wholesale life insurance policy may not contain any provision which is prohibited under Insurance Article, §12-209 or 16-216, Annotated Code of Maryland.

B. Limitations of Liability. A wholesale life insurance policy may not contain any limitation of liability which is less favorable to the policyholder than limitations permitted under Insurance Article, §16-215, Annotated Code of Maryland.

C. Separate Agreements. A separate agreement may not be entered into between the insurer and the sponsor which would purport to change the terms and conditions of any wholesale life insurance policy delivered to an employee or member.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.11 Validity of Noncomplying Forms.

Any wholesale life insurance policy hereafter issued and otherwise valid which contains any condition or provision not in compliance with the requirements of Insurance Article, Annotated Code of Maryland, and of any applicable regulations may not be thereby rendered invalid, but shall be construed in accordance with conditions and provisions at least as favorable as those required under Insurance Article, Annotated Code of Maryland, and the applicable regulations.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

COMAR 31.09.01.12 Effective Date.

This chapter shall take effect January 1, 1969, provided, however, that for any case in existence before the effective date of this chapter and for any new case initially made effective before June 1, 1969, the insurer may issue policy forms approved by the Maryland Insurance Administration before January 1, 1969, for use as wholesale life insurance policies which approval was in effect on the initial effective date of that case, and, unless the Commissioner otherwise prescribes pursuant to the provisions of Insurance Article, Annotated Code of Maryland, and §3 of Chapter 553 of the Acts of the 1963 General Assembly of Maryland, the insurer may hereafter continue to issue those policy forms to employees or members newly insured under that case.

History

Administrative History: Effective date: January 1, 1969
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.48 to COMAR 31.09.01 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 16-102, and 16-217, Annotated Code of Maryland

31.09.02 Variable Life Insurance

COMAR 31.09.02.01 Authority and Purpose.

This chapter, applicable to variable life insurance policies, is promulgated under authority of Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland. The issuance or delivery of life insurance policies on a variable basis in Maryland in any manner not in compliance with this chapter shall be deemed contrary to the requirements of Insurance Article, §§16-601—16-603, Annotated Code of Maryland, and, further, shall be deemed to constitute the transaction of insurance business hazardous to policyholders and the public and contrary to the public interest.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.02 Definitions.

A. In this chapter, the following words have the meanings indicated.

B. Terms Defined.

(1) “Affiliate" of an insurer means:

(a) A person, directly or indirectly, controlling, controlled by, or under common control with the insurer;

(b) A person who regularly furnishes investment advice to the insurer with respect to its variable life insurance separate accounts for which a specific fee or commission is charged; or

(c) A director, officer, partner, or employee of the insurer, controlling or controlled person, or person providing investment advice or any member of the immediate family of this person.

(2) “Agent” means a person licensed in this State as an agent or broker with respect to the sale of life insurance.

(3) “Assumed investment rate” means the rate of investment return which would be required to be credited to a variable life insurance policy, after deduction of charges for taxes, investment expenses, and mortality and expense guarantees to maintain the variable death benefit equal at all times to the amount of death benefit, other than incidental insurance benefits, which would be payable under the plan of insurance if the death benefit did not vary according to the investment experience of the separate account.

(4) “Benefit base” means the amount not less than the amount specified under Regulation .06B(2) of this chapter.

(5) “Commissioner” means the Insurance Commissioner of Maryland.

(6) Control.

(a) “Control”, “controlling”, “controlled by”, and “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.

(b) “Control” shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing more than 10 percent of the voting securities of any other person. This presumption may be rebutted by a showing made to the satisfaction of the Commissioner that control does not exist in fact. The Commissioner may determine, after furnishing all persons in interest notice of an opportunity to be heard, and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect.

(7) “Flexible premium policy” means any variable life insurance policy other than a scheduled premium policy as specified under §B(15) of this regulation.

(8) “General account” means all assets of the insurer other than assets in separate accounts established pursuant to Insurance Article, §§5-512 and 16-601—16-603, Annotated Code of Maryland, or pursuant to the corresponding section of the insurance laws of the state of domicile of a foreign insurer or the state of entry of an alien insurer, whether or not the separate account is established for variable life insurance.

(9) “Incidental insurance benefit” means all insurance benefits in a variable life insurance policy, other than the variable death benefit and the minimum death benefit, including but not limited to accidental death and dismemberment benefits, disability income benefits, guaranteed insurability options, family income, or fixed benefit term riders.

(10) “May” is permissive.

(11) “Minimum death benefit” means the amount of the guaranteed death benefit, other than incidental insurance benefits, payable under a variable life insurance policy regardless of the investment performance of the separate account.

(12) “Net investment return” means the rate of investment return in a separate account to be applied to the benefit base after deduction of charges for taxes, investment expenses, and mortality and expense guarantees in accordance with the terms of the policy.

(13) “Person” means an individual, corporation, partnership, association, trust, or fund.

(14) “Policy processing day” means the day on which charges authorized in the policy are deducted from the cash value of the policy.

(15) “Scheduled premium policy” means a variable life insurance policy under which both the amount and timing of premium payments are fixed by the insurer.

(16) “Separate account” means a separate account established for variable life insurance pursuant to Insurance Article, §§16-601—16-603, Annotated Code of Maryland, or pursuant to the corresponding section of the insurance laws of the state of domicile of a foreign insurer or the state of entry of an alien insurer.

(17) “Shall” is mandatory.

(18) “Variable death benefit” means the amount of the death benefit, other than incidental insurance benefits, payable under a variable life insurance policy dependent on the investment performance of the separate account which the insurer would have to pay in the absence of the minimum death benefit.

(19) “Variable life insurance policy” means an individual policy which provides for life insurance which varies according to the investment experience of a separate account or accounts established and maintained by the insurer as to this policy, pursuant to Insurance Article, §§16-601—16-603, Annotated Code of Maryland, or pursuant to a corresponding section of the insurance laws of the state of domicile of a foreign insurer or the state of entry of an alien insurer.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.03 Qualification of Insurer to Issue Variable Life Insurance.

A. The requirements of this regulation are applicable to all insurers either seeking authority to issue variable life insurance in this State or which have authority to issue variable life insurance in this State.

B. Licensing and Approval to Do Business in This State. An insurer may not deliver or issue for delivery in this State any variable life insurance policy, unless the insurer is authorized to engage in the life insurance business in this State, and either:

(1) The state of domicile of the insurer requires that permissible investments be substantially the same as provided in Regulation .06C of this chapter and that changes in the investment policy of the variable life insurance separate account be regulated in a manner substantially similar to that required under Regulation .06 of this chapter for separate accounts operated by insurers domiciled in this State; or

(2) The insurer's investment policy, as described in the statement required to be filed under §C(3) of this regulation, conforms to Regulation .06C of this chapter and the Commissioner is satisfied that the procedures for changing the investment policy of a variable life insurance separate account as described in the statement required to be filed under §C(3) of this regulation provide safeguards consistent with those provided under Regulation .06F of this chapter, and the insurer has obtained the written approval of the Commissioner for the issuance of variable life insurance policies in this State. The Commissioner shall grant the written approval only after he has found that:

(a) The plan of operation for the issuance of variable life insurance policies is not unsound;

(b) The general character, reputation, and experience of the management and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer are such as to reasonably assure competent operation of the variable life insurance business of the insurer in this State;

(c) The insurer has surplus in addition to that required under Insurance Article, §4-105, Annotated Code of Maryland, as of the end of the preceding calendar year of at least 5 million dollars; and

(d) The present and foreseeable future financial condition of the insurer and its method of operation in connection with the issuance of the policies is not likely to render its operation hazardous to the public or its policyholders in this State. The Commissioner shall consider, among other things:

(i) The history of operation and financial condition of the insurer; and

(ii) The qualifications, fitness, character, responsibility, reputation, and experience of the officers and directors and other management of the insurer and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer;

(iii) The applicable law and regulations under which the insurer is authorized in its state of domicile to issue variable life insurance policies. The state of entry of an alien insurer shall be deemed its state of domicile for this purpose; and

(iv) If the insurer is a subsidiary of, or is affiliated by common management or ownership with another company, its relationship to the other company and the degree to which the requesting insurer, as well as the other company, meet these standards.

C. Filing for Approval to Do Business in This State. Before an insurer shall deliver or issue for delivery a variable life insurance policy in this State, it shall file with the Commissioner the following information for the consideration of the Commissioner in making the determination required by §B of this regulation:

(1) Copies of and a general description of the variable life insurance policies it intends to issue.

(2) A general description of the methods of operation of the variable life insurance business of the insurer, including the names of those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer.

(3) With respect to a separate account maintained by an insurer for a variable life insurance policy, a statement of the investment policy the insurer intends to follow for the investment of the assets held in the separate account, and a statement of the procedures for changing the investment policy. The statement of investment policy shall include a description of the investment objective and orientation intended for the separate account.

(4) A description of any investment advisory services contemplated as required by Regulation .06J of this chapter.

(5) If requested by the Commissioner, a copy of the statutes and regulations of the state of domicile of the insurer under which it is authorized to issue variable life insurance policies.

(6) Biographical data with respect to officers and directors of the insurer on the National Association of Insurance Commissioners Uniform Biographical Data Form.

(7) A statement of an actuary appointed by the insurer describing the mortality and expense risks which the insurer will bear under the policy.

D. Standards of Suitability. An insurer seeking approval to enter into the variable life insurance business in this State shall adopt by formal action of its board of directors and file with the Commissioner a written statement specifying the standards of suitability to be used by the insurer and applicable to its officers, directors, employees, affiliates, and agents with respect to the suitability of variable life insurance for the applicant. These standards of suitability shall be binding on the insurer and those to whom it refers, and shall specify that no recommendations shall be made to an applicant to purchase a variable life insurance policy and that no variable life insurance policy may be issued in the absence of reasonable grounds to believe that the purchase of the policy is suitable for the applicant on the basis of information furnished after reasonable inquiry of the applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and any other information known to the insurer or to the agent making the recommendation. Lapse rates for variable life insurance within the first 2 policy years which are significantly higher than both those encountered by the insurer, or an affiliate of the insurer, for corresponding fixed benefit life insurance policies and lapse rates of other insurers issuing variable life insurance policies shall be considered by the Commissioner in determining whether the guidelines adopted by the insurer are reasonable and also whether the insurer and its agents are engaging, as a general business practice, in the sale of variable life insurance to persons for whom it is unsuitable. For purposes of this section, conversions from variable life insurance to fixed benefit life insurance policies pursuant to this chapter will not be considered lapses.

E. Use of Sales Materials.

(1) An insurer authorized to transact variable life insurance business in this State may not use sales material, advertising material, or descriptive literature or other materials of any kind in connection with its variable life insurance business in this State which is false, misleading, deceptive, or inaccurate.

(2) The Commissioner shall require an insurer to cease the use of sales materials, advertising materials, descriptive literature, or other materials of any kind upon finding that the materials are false, deceptive, inaccurate, misleading, or have a tendency to mislead or be ambiguous.

(3) Variable life insurance sales material, advertising material, and descriptive literature shall include but is not limited to:

(a) Printed and published material, audiovisual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, TV and film scripts, billboards, and similar displays for variable life insurance;

(b) Descriptive literature and sales aids of all kinds used to sell variable life insurance by or on behalf of an insurer or any person authorized to sell variable life insurance for presentation to members of the insurance-buying public, including but not limited to circulars, leaflets, booklets, depictions, illustrations, and form letters; and

(c) Prepared sales talks, presentations, and materials for use in the sale of variable life insurance by a person authorized to sell variable life insurance.

F. Requirements Applicable to Contractual Services.

(1) A contract between an insurer and suppliers of consulting, investment, administrative, sales, marketing, custodial, or other services which are material with respect to variable life insurance operations shall be in writing and provide that the supplier of these services shall furnish the Commissioner with any information or reports in connection with the services which the Commissioner may request in order to ascertain whether the variable life insurance operations of the insurer are being conducted in a manner consistent with these regulations and any other applicable law or regulations.

(2) The contract shall be fair and equitable to all parties and not endanger policyholders of the insurer in this State.

(3) The contract may not relieve the insurer from any responsibilities or obligations imposed upon the operations of its variable life insurance business by this chapter or any other law or regulation.

G. Reports to the Commissioner.

(1) An insurer authorized to transact the business of variable life insurance in this State shall submit to the Commissioner, in addition to any other materials which may be required by this chapter or any other applicable laws or regulations:

(a) An annual statement of the business of its variable life insurance separate account or accounts in such form as may be prescribed by the National Association of Insurance Commissioners;

(b) Before the use in this State, any information furnished to applicants as provided for in Regulation .07 of this chapter;

(c) Before the use in this State, the form of any of the reports to policyholders as provided for in Regulation .09 of this chapter; and

(d) Such additional information concerning its variable life insurance operations or its variable life insurance separate accounts as the Commissioner deems necessary.

(2) Material submitted to the Commissioner under this section shall be disapproved if it is found to be false, deceptive, inaccurate, misleading, or have a tendency to mislead, or ambiguous in any respect and, if previously distributed, the Commissioner shall require the distribution of an amended report.

H. Authority of Commissioner to Disapprove. Material required to be filed with the Commissioner, or approved by him, shall be subject to disapproval if at any time it is found by him not to comply with the standards established by this chapter.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.04 Insurance Policy Requirements—Policy Qualification.

A. The Commissioner may not approve a variable life insurance form filed pursuant to this chapter unless it conforms to the requirements of this regulation.

B. Filing of Variable Life Insurance Policies.

(1) All variable life insurance policies, and all riders, endorsements, applications, and other documents which are to be attached to and made a part of the policy and which relate to the variable nature of the policy, shall be filed with the Commissioner and approved by him in writing before delivery or issuance for delivery in this State.

(2) The procedures and requirements for the filing and approval shall be, to the extent appropriate and not inconsistent with this chapter, the same as those otherwise applicable to other life insurance policies (for example, see particularly Insurance Article, §§12-102, 12-103, 12-203—12-205, and 12-209, Annotated Code of Maryland, and COMAR 31.04.17).

(3) The Commissioner may approve variable life insurance policies and related forms with provisions the Commissioner deems to be not less favorable to the policyholder and the beneficiary than those required by this chapter.

(4) The requirements of §§C(1), C(4), D(5)(a), and D(16) of this regulation do not apply to variable life insurance policies and related forms issued in connection with pension, profit-sharing, and retirement plans if separate accounts for the policies are exempt pursuant to the federal Investment Company Act of 1940, §3(c)(11).

C. Mandatory Policy Benefit and Design Requirements. Variable life insurance policies delivered or issued for delivery in this State shall comply with the following minimum requirements:

(1) Coverage shall be provided for the lifetime of the insured with the mortality and expense risk borne by the insurer. The mortality and expense charges shall be subject to the maximums stated in the policy.

(2) Gross premiums for death benefits shall be a level amount for the duration of the premium payment period, but this subsection may not be construed to prohibit temporary or permanent additional premiums for incidental insurance benefits or substandard risks. This subsection may not be deemed to prohibit the use of fixed benefit preliminary term insurance for a period not to exceed 120 days from the date of the application for a variable life insurance policy. The premium rate for the preliminary term insurance shall be stated separately in the application or receipt.

(3) A minimum death benefit for scheduled premium policies shall be provided in an amount at least equal to the initial face amount of the policy as long as premiums are duly paid, subject to the provisions of §E(2)(d) of this regulation.

(4) The amount payable upon the death of the insured as long as premiums are duly paid, subject to the provisions of §E(2) of this regulation, shall be not less than a minimum multiple of the gross premium payable in that year, exclusive of that portion allocable to any incidental insurance benefit, by a person who meets standard underwriting requirements, as shown in the following table:

| Issue Ages | Multiples | | --- | --- | | 0—5 | 80 | | 6—10 | 71 | | 11—15 | 63 | | 16—20 | 55 | | 21—25 | 47 | | 26—30 | 40 | | 31—35 | 33 | | 36—40 | 27 | | 41—45 | 21 | | 46—50 | 15 | | 51—55 | 13 | | 56—60 | 11 | | 61—65 | 9 | | 66—70 | 8 | | 71 and over | 7 |

(5) The policy shall provide that the variable death benefit shall reflect the investment experience of the variable life insurance separate account established and maintained by the insurer and that the excess, positive or negative, of the net investment return over the assumed investment rate, as applied to the benefit base of each variable life insurance policy, shall be used to provide either:

(a) Fully paid-up variable life insurance providing coverage for the same period as the basic insurance under the policy or fully paid-up term insurance amounts for a term of annual periods of not less than 1 year or more than 5 years, positive or negative, as the case may be, or a combination thereof; or

(b) Variable life insurance amounts, positive or negative, as the case may be, so that the reserve maintains the same percentage relationship to the variable death benefit as it would have on a corresponding fixed benefit policy.

(6) Each variable life insurance policy shall be credited with the full amount of the net investment return applied to the benefit base.

(7) Changes in variable death benefits of each variable life insurance policy shall be determined at least annually.

(8) The cash value of each variable life insurance policy shall be determined at least monthly. The method of computation of cash values and other nonforfeiture benefits, as described either in the policy or in a statement filed with the Commissioner of the state in which the policy is delivered, or issued for delivery, shall be in accordance with actuarial procedures that recognize the variable nature of the policy. The method of computation shall be such that, if the net investment return credited to the policy at all times from the date of issue should be equal to the assumed investment rate with premiums and benefits determined accordingly under the terms of the policy, then the resulting cash values and other nonforfeiture benefits shall be at least equal to the minimum values required by Insurance Article, Title 16, Subtitle 3, Annotated Code of Maryland, for a fixed benefit policy with the premiums and benefits. The assumed investment rate may not exceed the maximum interest rate permitted under the Standard Nonforfeiture Law of this State. The method of computation may disregard incidental minimum guarantees as to the dollar amounts payable. Incidental minimum guarantees include, for example, but are not to be limited to, a guarantee that the amount payable at death or maturity shall be at least equal to the amount that otherwise would have been payable if the net investment return credited to the policy at all times from the date of issue had been equal to the assumed investment rate.

(9) The computation of values required for each variable life insurance policy may be based upon such reasonable and necessary approximations as are acceptable to the Commissioner.

(10) Adjusted Premiums.

(a) If the gross premiums for any variable life insurance policy delivered or issued for delivery in this State produce an excess of(a) over (B) as defined in §C(10)(b) of this regulation the present value as of the date of issue of the adjusted premiums used in determining the minimum cash values required by §C(8) of this regulation shall be decreased by this excess by decreasing each adjusted premium by a uniform percentage.

(b) The excess of(a) over (B) referred to in §C(10)(a) of this regulation shall be determined as of the date of issue on the basis of the mortality table and maximum rate of interest permitted by Insurance Article, Title 16, Subtitle 3, Annotated Code of Maryland; and(a) is the present value of the gross premiums for the policy, decreased by one dollar per thousand of equivalent uniform amount for policies with an equivalent uniform amount of less than ten thousand, payable on an annual basis (exclusive of those portions of the gross premiums allocable to any incidental insurance benefits) by a person who meets standard underwriting requirements; and (B) is the product of(1) times (2) where(1) is the present value of the maximum premium rates per thousand of insurance shown below payable at the beginning of each policy year to attained age 65 of the insured for issue ages below age 51, for 15 years for issue ages 51 to 70 and for life for issue ages above age 70 and (2) is the ratio of(i) the present value of the benefits under the policy to (ii) the present value of an insurance of one thousand for the whole of life.

| Tables of Rates | | | --- | --- | | Age at Issue | Premium Rate | | 0 | 11.50 | | 1 | 11.60 | | 2 | 11.76 | | 3 | 11.97 | | 4 | 12.22 | | 5 | 12.50 | | 6 | 12.80 | | 7 | 13.11 | | 8 | 13.43 | | 9 | 13.75 | | 10 | 14.08 | | 11 | 14.42 | | 12 | 14.77 | | 13 | 15.13 | | 14 | 15.49 | | 15 | 15.87 | | 16 | 16.27 | | 17 | 16.70 | | 18 | 17.16 | | 19 | 17.65 | | 20 | 18.18 | | 21 | 18.74 | | 22 | 19.34 | | 23 | 19.97 | | 24 | 20.62 | | 25 | 21.28 | | 26 | 21.95 | | 27 | 22.64 | | 28 | 23.37 | | 29 | 24.15 | | 30 | 25.00 | | 31 | 25.92 | | 32 | 26.91 | | 33 | 27.97 | | 34 | 29.10 | | 35 | 30.30 | | 36 | 31.55 | | 37 | 32.84 | | 38 | 34.17 | | 39 | 35.56 | | 40 | 37.04 | | 41 | 38.65 | | 42 | 40.45 | | 43 | 42.51 | | 44 | 44.89 | | 45 | 47.62 | | 46 | 50.71 | | 47 | 54.17 | | 48 | 58.00 | | 49 | 62.18 | | 50 | 66.67 | | 51 | 68.58 | | 52 | 70.54 | | 53 | 72.57 | | 54 | 74.69 | | 55 | 76.92 | | 56 | 79.29 | | 57 | 81.84 | | 58 | 84.61 | | 59 | 87.63 | | 60 | 90.91 | | 61 | 94.45 | | 62 | 98.25 | | 63 | 102.31 | | 64 | 106.31 | | 65 | 111.11 | | 66 | 115.48 | | 67 | 122.51 | | 68 | 122.51 | | 69 | 124.50 | | 70 | 125.00 | | 71 | 118.86 | | 72 | 123.96 | | 73 | 129.66 | | 74 | 135.96 | | 75 | 142.86 | | 76 | 150.36 | | 77 | 158.46 | | 78 | 167.16 | | 79 | 176.46 | | 80 | 186.36 |

(c) For purposes of this subsection, the portion of the premium set aside to support a guarantee that the surrender value will not be less than a specified amount or for any other benefit that the Commissioner deems excludable, will not be included.

(11) In determining the net investment return to be applied to the benefit base, the insurer may deduct only the charges described in Regulation .06G(1), (2), (4), and (5) of this chapter.

(12) While the provisions of §C(2), (4), and (10) of this regulation are intended to apply to a variable life insurance policy on which level premiums are payable for life, a variable life insurance policy issued on a single premium or other premium payment plan may be delivered or issued for delivery in this State if, in the opinion of the Commissioner, the policy is in no respect less favorable to the policyholder than a policy on which level premiums are payable for life and which meets the requirements of this regulation, and if the policy issued on a single premium or other premium payment plan is otherwise issued and administered in conformity with and as prescribed by this chapter.

D. Mandatory Policy Provisions.

(1) Every variable life insurance policy filed for approval in this State shall be plainly printed in a type size not less than 10 point with a lower case unspaced alphabet length not less than 120 point, and shall contain at least the following:

(a) The cover page or pages corresponding to the cover page of each policy that shall contain:

(i) A prominent statement in either contrasting color or in boldface type at least four points larger than the type size of the largest type used in the text of any provision on that page, that the death benefit may be variable or fixed under specified conditions;

(ii) A prominent statement in either contrasting color or in boldface type at least four points larger than the type size of the largest type size used in the text of any provision on that page that cash values may increase or decrease in accordance with the experience of the separate account subject to any specified minimum guarantees;

(iii) A statement that the minimum death benefit will be at least equal to the initial face amount at the date of issue if premiums are duly paid and if there are no outstanding policy loans, partial withdrawals, or partial surrenders;

(iv) The rule, or a reference to the policy provision, which describes the method for determining the variable amount of insurance payable at death;

(v) A captioned provision which provides that the policyholder may return the variable life insurance policy within 45 days of the date of the execution of the application or within 10 days of receipt of the policy by the policyholder, whichever is later, and receive a refund of all premium payments for the policy; and

(vi) Other items that are currently required for fixed benefit life insurance policies and which are not inconsistent with this chapter;

(b) A provision regarding the policy grace period as follows:

(i) For scheduled premium policies, the grace period shall be not less than 31 days from the premium due date and when the premium is paid within the grace period, policy values will be the same, except for the deduction of any overdue premium, as if the premium were paid on or before the due date;

(ii) For flexible premium policies, the grace period shall begin on the policy processing day when the total charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day exceed the amounts available under the policy to pay such charges in accordance with the terms of the policy and end on a date not less than 61 days after the mailing date of the report to policyholders required by Regulation .09C of this chapter;

(iii) For all policies, the death benefit payable during the grace period shall equal the death benefit in effect immediately prior to such period less any overdue charges; and

(iv) For all policies, if the policy processing day occurs monthly, the insurer may require the payment of not more than three times the charges that were due on the policy processing day on which the amounts available under the policy were insufficient to pay all charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day;

(c) A provision that the policy will be reinstated at any time within 2 years from the date of default upon the written application of the insured and evidence of insurability, including good health, satisfactory to the insurer, unless the cash surrender value has been paid or the period of extended insurance has expired, upon the payment of any outstanding indebtedness arising after the end of the grace period following the date of default together with accrued interest thereon to the date of reinstatement and payment of an amount not exceeding the greater of:

(i) All overdue premiums with interest at a specified rate not exceeding the rate of interest set forth in Insurance Article, §16-210, Annotated Code of Maryland, and any indebtedness in effect at the end of the grace period following the date of default with interest at a specified rate not exceeding the rate set forth in Insurance Article, §16-210, Annotated Code of Maryland; or

(ii) One hundred and ten percent of the increase in cash surrender value resulting from reinstatement plus all overdue premiums for incidental insurance benefits with interest at a specified rate not exceeding the rate set forth in Insurance Article, §16-210, Annotated Code of Maryland;

(d) A full description of the benefit base and of the method of calculation and application of any factors used to adjust variable benefits under the policy;

(e) A provision designating the separate account to be used and stating that:

(i) The separate account shall be used to fund only variable life insurance benefits, except to the extent permitted by §F(3)(f) of this regulation;

(ii) The assets of the separate account shall be available to cover the liabilities of the general account of the insurer only to the extent that the assets of the separate account exceed the liabilities of the separate account arising under the variable life insurance policies supported by the separate account; and

(iii) The assets of the separate account shall be valued at least as often as any policy benefits vary, but at least monthly;

(f) A provision that at any time during the first 18 months of the variable life insurance policy, as long as premiums are duly paid, the owner may exchange the policy for a policy of permanent fixed benefit life insurance on the life of the insured for the same initial amount of insurance as the variable life insurance policy, and on a plan of insurance specified in the policy, provided that the new policy:

(i) Bears the same date of issue and age at issue as the original variable life insurance policy;

(ii) Is issued on a substantially comparable plan of permanent insurance offered in this state by the insurer or an affiliate on the date of issue of the variable life insurance policy and at the premium rates in effect on that date for the same class of insurance;

(iii) Includes riders and incidental insurance benefits which were included in the original policy if the riders and incidental insurance benefits are issued with the fixed benefit policy;

(iv) Is issued subject to an equitable premium or cash value adjustment that takes appropriate account of the premiums and cash values under the original and new policies. A detailed statement of the method of computing the adjustment shall be filed with the Commissioner;

(v) Does not require evidence of insurability for this exchange;

(g) A provision that the policy and any papers attached by the insurer, including the application if attached, constitute the entire insurance contract;

(h) A designation of the officers of the insurer who are empowered to make an agreement or representation on behalf of the insurer and an indication that statements by the insured, or on his behalf, shall be considered as representations and not warranties;

(i) An identification of the owner of the insurance contract;

(j) A provision setting forth conditions or requirements as to the designation, or change of designation, of a beneficiary and a provision for disbursement of benefits in the absence of a beneficiary designation;

(k) A statement of conditions or requirements concerning the assignment of the policy;

(l) A description of any adjustments in policy values to be made in the event of misstatement of age or sex of the insured;

(m) A provision that the policy shall be incontestable by the insurer after it has been in force for 2 years during the lifetime of the insured, notwithstanding that any increase in the amount of the policy’s death benefits subsequent to the policy issue date, which occurred upon a new application or request of the owner and was subject to satisfactory proof of the insured’s insurability, shall be incontestable after the increase has been in force, during the lifetime of the insured, for 2 years from the date of issue of increase;

(n) A provision stating that the investment policy of the separate account may not be changed without the approval of the Insurance Commissioner of the state of domicile of the insurer, and that the approval process is on file with the Commissioner of this State;

(o) A provision that payment of variable death benefits in excess of the minimum death benefits, cash values, policy loans, or partial withdrawals, except when used to pay premiums, or partial surrenders may be deferred:

(i) For up to 6 months from the date of request, if these payments are based on policy values which do not depend on the investment performance of the separate account; or

(ii) Otherwise, for any period during which the New York Stock Exchange is closed for trading, except for normal holiday closing, or when the Securities and Exchange Commission has determined that a state of emergency exists which may make payment impractical;

(p) Settlement options which shall be provided on a fixed basis only;

(q) A description of the basis for computing the cash surrender value under the policy shall be included, with the surrender value expressed as either:

(i) A schedule of cash value amounts per $1,000 of variable face amount at each attained age or policy year for at least 20 years from issue, or for the premium paying period, if less than 20 years; or

(ii) One cash value schedule as described in §D(17)(a) of this regulation for the death benefit, or for each $1,000 of death benefit, which would be in effect if the net investment return is always equal to the assumed investment rate and a second schedule applicable to any adjustments to the death benefit, disregarding the minimum death benefit guarantee and term insurance amounts, if the net investment return does not equal the assumed investment rate at each age for at least 20 years from issue, or for the premium paying period if it is less than 20 years;

(r) Premiums for incidental insurance benefits shall be stated separately;

(s) Any other policy provisions required by this chapter;

(t) Such other items as are currently required for fixed benefit life insurance policies and are not inconsistent with this chapter.

E. Nonforfeiture, Partial Withdrawal, Policy Loan, and Partial Surrender Provisions. A variable life insurance policy delivered or issued for delivery in this State shall contain provisions which are not less favorable to the policyholder than the following:

(1) Nonforfeiture Benefits:

(a) A provision for nonforfeiture insurance benefits so that at least one benefit is offered on a fixed basis from the due date of the premium in default;

(b) Variable extended term insurance may not be offered;

(2) A provision for policy loans after 3 full years' premiums have been paid (which may at the option of the insurer be entitled and referred to as a partial withdrawal provision) not less favorable to the policyholder than the following:

(a) Up to 75 percent but if the loan is made from the general account not more than 90 percent of the policy's cash value may be borrowed;

(b) The amount borrowed, or any repayment thereof, does not affect the amount of the premium payable under the policy;

(c) The amount borrowed shall bear interest at a rate not to exceed the rate stated in Insurance Article, §16-207, Annotated Code of Maryland;

(d) Any indebtedness shall be deducted from the proceeds payable on death;

(e) Any indebtedness shall be deducted from the cash value upon surrender or in determining any nonforfeiture benefit;

(f) If the indebtedness exceeds the cash value for scheduled premium policies, the insurer shall give notice of intent to cancel the policy if the excess indebtedness is not repaid within 31 days after the date of mailing of the notice;

(g) The policy may provide that if, at any time, as long as premiums are duly paid, the variable death benefit is less than it would have been if no loan or withdrawal had ever been made, the policyholder may increase the variable death benefit up to what it would have been if there had been no loan or withdrawal by paying an amount not exceeding 110 percent of the corresponding increase in cash value and by furnishing such evidence of insurability as the insurer may request;

(h) The policy may specify a reasonable minimum amount which may be borrowed at any time, but this minimum does not apply to any automatic premium loan provision;

(i) A policy loan provision is not required if the policy is under the extended insurance nonforfeiture option;

(j) In addition to the foregoing, the policy may contain a partial surrender provision. However, this provision shall provide that the policyholder may request part of the cash value, and both the variable and minimum death benefits will be reduced in proportion to the percentage of the cash value received by the policyholder, and the premium for the remaining amount of insurance will also be reduced to the appropriate rates for the reduced amount of insurance. The policy may provide that a partial surrender provision may not require the insurer to reduce the amount of the minimum death benefit to less than the lowest amount of minimum death benefit which would have been issued to the insured under the insurance plans of the insurer at the time the policy was issued. The policy shall clearly provide that the policyholder has the option of electing to exercise the cash value privileges of the policy loan or partial withdrawal provision rather than the partial surrender provision;

(k) All policy loan, partial withdrawal, or partial surrender provisions shall be constructed so that variable life insurance policyholders who have not exercised these provisions are not disadvantaged by their exercise;

(l) Monies paid to the policyholders upon the exercise of a policy loan, partial withdrawal, or partial surrender provision shall be withdrawn from the separate account and shall be returned to the separate account upon repayment, except that a stock insurer may provide the monies for policy loans from the general account.

F. Other Policy Provisions. The following provisions may in substance be included in a variable life insurance policy or related form delivered or issued for delivery in this State:

(1) An exclusion for suicide within 2 years of the policy issue date, and an exclusion, to the extent of the increased death benefits only, for suicide within 2 years of any increase in death benefits which result from an application of the owner subsequent to the policy issue date;

(2) Incidental insurance benefits may be offered on a fixed basis only;

(3) Policies issued on a participating basis shall offer to pay dividend amounts in cash and may offer options so that the amount of the dividend may be:

(a) Credited against premium payments;

(b) Applied to provide paid-up amounts of additional fixed benefit whole life insurance;

(d) Deposited in the general account at a specified minimum rate of interest;

(e) Applied to provide paid-up amounts of fixed benefit 1-year term insurance;

(f) Deposited as a variable deposit in the separate account if the separate account is exempt pursuant to the federal Investment Company Act of 1940, §3(c) (11);

(4) A provision allowing the policyholder to elect in writing in the application for the policy or thereafter an automatic premium loan on a basis not less favorable than that required of policy loans or partial withdrawals under §E of this regulation, except that a restriction that no more than two consecutive premiums can be paid under this provision may be imposed.

Cross References

31.09.02.06B(2)

31.09.02.09A

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.05 Reserve Liabilities for Variable Life Insurance.

A. Reserve liabilities for variable life insurance policies shall be established under Insurance Article, Title 5, Subtitle 3, Annotated Code of Maryland, in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.

B. Reserve liabilities for the guaranteed minimum death benefit shall be the reserve needed to provide for the contingency of death occurring when the guaranteed minimum death benefit exceeds the death benefit that would be paid in the absence of the guarantee, and shall be maintained in the general account of the insurer, and shall be not less than the greater of the following minimum reserves:

(1) The aggregate total of the term costs, if any, covering a period of 1 full year from the valuation date of the guarantee on each variable life insurance contract, assuming an immediate one-third depreciation in the current value of the assets of the separate account followed by a net investment return equal to the assumed investment rate.

(2) The aggregate total of the attained age level reserves on each variable life insurance contract. The attained age level reserve on each variable life insurance contract may not be less than zero and shall equal the residue, as described in §B(2)(a) of this regulation of the prior year's attained age level reserve on the contract, with any such residue increased or decreased by a payment computed on an attained age basis as described in §B(2)(b) of this regulation.

(a) The residue of the prior year's attained age level reserve on each variable life insurance contract may not be less than zero and shall be determined by adding interest at the valuation interest rate to the prior year's reserve, deducting the tabular claims based on the excess, if any, of the guaranteed minimum death benefit over the death benefit that would be payable in the absence of the guarantee, and dividing the net result by the tabular probability of survival. The excess referred to in the preceding sentence shall be based on the actual level of death benefits that would have been in effect during the preceding year in the absence of the guarantee, taking appropriate account of the reserve assumptions regarding the distribution of death claim payments over the year.

(b) The payment referred to in §B(2) of this regulation shall be computed so that the present value of a level payment of that amount each year over the future premium paying period of the contract is equal to(a) minus (B) minus (C), when(a) is the present value of the future guaranteed minimum death benefit, (B) is the present value of the future death benefits that would be payable in the absence of the guarantee, and (C) is any residue, as described in §B(2)(a) of this regulation of the prior year's attained age level reserve on the variable life insurance contract. If the contract is paid up, the payment shall equal(a) minus (B) minus (C). The amounts of future death benefits referred to in (B) shall be computed assuming a net investment return of the separate account which may differ from the assumed investment rate or the valuation interest rate, or both, but may not exceed the maximum interest rate permitted for the valuation of life insurance contracts.

(3) The valuation interest rate and mortality table used in computing the two minimum reserves described in §B(1) and (2) of this regulation shall conform to permissible standards for the valuation of life insurance contracts. In determining the minimum reserve, the company may employ suitable approximations and estimates, including but not limited to groupings and averages.

C. Reserve liabilities for all fixed incidental insurance benefits shall be maintained in the general account in amounts determined in accordance with the actuarial procedures appropriate to these benefits.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.06 Separate Accounts.

The following requirements apply to establishment and administration of variable life insurance separate accounts:

A. Establishment and Administration of Separate Accounts.

(1) An insurer issuing variable life insurance in this State shall establish one or more separate accounts pursuant to Insurance Article, §§16-601—16-603, Annotated Code of Maryland.

(2) Assets in the separate account shall be owned by the insurer and the insurer may not be, or hold itself out to be, a trustee with respect to these assets. If and to the extent so provided under the applicable contracts, that portion of the assets of the separate account equal to the reserves and other contract liabilities with respect to the account may not be chargeable with liabilities arising out of any other business the insurer may conduct.

(3) If no law or other regulation provides for the custody of separate account assets and if the insurer itself is not the custodian of these assets, all contracts for custody shall be in writing and the Commissioner of the insurer's state of domicile shall approve of both the terms of the contract and the proposed custodian before the transfer of custody.

(4) Without the prior written approval of the Commissioner, an insurer may not employ in any material connection with the handling of separate account assets any person who:

(a) Within the last 10 years has been convicted of any felony, or of a misdemeanor arising out of this person's conduct involving embezzlement, fraudulent conversion, or misappropriation of funds or securities or involving violation of 18 U.S.C. §1341, 1342, or 1343;

(b) Within the last 10 years has been found by any state regulatory authority to have violated or has acknowledged violation of any provision of any state insurance law involving fraud, deceit, or knowing misrepresentation;

(c) Within the last 10 years has been found by federal or state regulatory authorities to have violated, or has acknowledged violation of, any provision of federal or state securities laws involving fraud, deceit, or knowing misrepresentation; or

(d) Within the past 10 years has signed a consent order with any federal or state regulatory authority that it will not in the future engage in any of the aforementioned violations.

(5) A person with access to the cash, securities, or other assets of the separate account shall be under bond in an amount of not less than the greater of $500,000 or 25 percent of the assets to which the person has access, but the bond need not exceed 5 million dollars.

(6) If an insurer establishes more than one separate account for variable life insurance, justification for the establishment of each additional separate account shall also be filed with the Commissioner and shall be subject to the Commissioner's approval. The creation of additional separate accounts to avoid lower maximum charges against the separate account is prohibited.

(7) The assets of the separate accounts established for variable life insurance policies shall be valued at least as often as variable benefits are determined but in any event at least monthly.

(8) A separate account exempt pursuant to the federal Investment Company Act of 1940, §3(c)(11), because of the tax qualified status of the policies funded thereby, may not be used to fund other variable life insurance policies.

(9) Except for separate accounts exempt pursuant to the federal Investment Company Act of 1940, §3(c)(11), variable life insurance separate accounts may not be used for variable annuities or for the investment of funds corresponding to dividend accumulations or other policyholder liabilities not involving life contingencies.

B. Amounts in the Separate Account.

(1) The insurer shall maintain in each variable life insurance separate account assets with a fair market value at least equal to the greater of the valuation reserves for the variable portion of the variable life insurance policies or the benefit base for the policies.

(2) The benefit base of any variable life insurance policy as of the beginning of any valuation period may not be less than the sum of the following factors after deducting amounts of any indebtedness pursuant to Regulation .04E(2) of this chapter:

(a) The valuation net premium for this period, for the variable portion of the policy, minus the discounted cost of term insurance for this period, based on the tabular mortality and interest rates used in determining valuation reserves; and

(b) The valuation terminal reserve, for the variable portion of the policy, at the end of the immediately preceding valuation period adjusted for the net investment return of the preceding period.

(3) In lieu of the minimum benefit base requirement specified in §B(1) and (2) of this regulation, an insurer may otherwise qualify under this section if it can be demonstrated, to the satisfaction of the Commissioner, that the policy benefits obtained over a 20-year period from the date of issue by the use of the insurer's benefit base are at least substantially equivalent in value to the benefits obtained by the use of the minimum benefit base specified above. The Commissioner may specify the range of net investment return to be used in this demonstration.

(4) Notwithstanding the actual reserve basis used for policies that do not meet standard underwriting requirements, the benefit base for these policies may be the same as for corresponding policies which do meet standard underwriting requirements.

C. Investments by the Separate Account.

(1) A sale, exchange, or other transfer of assets may not be made by an insurer or any of its affiliates between any of its separate accounts or between any other investment account and one or more of its separate accounts, unless:

(a) In case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the policies with respect to the separate account to which the transfer is made; and

(b) The transfer, whether into or from a separate account, is made by a transfer of cash, but other assets may be transferred if approved by the Commissioner in advance.

(2) Assets allocated to a variable life insurance separate account shall be held in cash or investments having a reasonably ascertainable market price. For purposes of this subsection, only the following shall be considered investments having a reasonably ascertainable market price:

(a) Liens in favor of the insurer against separate account policy reserves resulting from use by policyholders of cash values.

(b) Securities listed and traded on the New York Stock Exchange, the American Stock Exchange, or regional stock exchanges or successors to these exchanges having the same or similar qualifications.

(d) Shares of an investment company registered pursuant to the federal Investment Company Act of 1940. When the investment company issues book shares in lieu of share certificates, the book shares shall be deemed to be adequate evidence of ownership.

(e) Obligations of or guaranteed by the United States Government, the Canadian government, any state, or municipality or governmental subdivision of a state.

(f) Commercial paper issued by business corporations when the total of the paper issued by the corporation does not exceed in value a guaranteed short line of credit by a bank.

(g) Certificates of deposit issued by financial institutions the deposits of which are insured by the FDIC or FSLIC.

(h) New bond or debt issues which may reasonably be expected to be listed on an exchange regulated by the Securities Exchange Act of 1934.

(3) Not more than 25 percent of the assets allocated to a variable life insurance separate account may be invested in non-dividend paying stock, and then only if the issuer of this stock has not had a net operating loss in more than two of its twelve fiscal quarters immediately preceding the date of purchase of the stock, or has not had a net operating loss in more than two of its fiscal quarters from the date of its incorporation if it has not been incorporated for at least 3 years before the date of purchase of the stock.

(4) Notwithstanding any other provision of law or the provisions of §C(2)of this regulation, assets allocated to a variable life insurance separate account may not be invested in:

(a) Commodities or commodity contracts;

(b) Put and call options or combinations of these options;

(d) Purchases on margins;

(e) Letter or restricted stock;

(f) Units or other evidences of ownership of a separate account of another insurer, except those registered under the federal Investment Company Act of 1940; or

(g) Real estate or shares of a real estate investment trust except that up to 5 percent of the assets allocated to a variable life insurance separate account may be invested in the shares of real estate investment trusts listed as described in §C(2)(b) of this regulation.

D. Limitations on Ownership.

(1) A variable life insurance separate account may not purchase or otherwise acquire the securities of any issuer, other than securities issued or guaranteed as to principal and interest by the United States, if, immediately after this purchase or acquisition, the value of the investment, together with prior investments of the separate account in the security valued as required by these regulations, would exceed the greater of 5 percent of the value of the assets of the separate account or $10,000. The Commissioner may waive this limitation in writing if he believes the waiver will not render the operation of the separate account hazardous to the public or the policyholders in this State.

(2) A separate account may not purchase or otherwise acquire the voting securities of any issuer if as a result of the acquisition the insurer and its separate accounts, in the aggregate, will own more than 5 percent of the total issued and outstanding voting securities of the issuer. The Commissioner may waive this limitation in writing if he believes the waiver will not render the operation of the separate account hazardous to the public or the policyholders in this State or jeopardize the independent operation of the issuer of these securities.

(3) The percentage limitation specified in §D(1) of this regulation may not be construed to preclude the investment of the assets of separate accounts in shares of investment companies registered pursuant to the federal Investment Company Act of 1940, if the investments and investment policies of these investment companies comply substantially with the provisions of §C of this regulation, and other applicable portions of this regulation.

E. Valuation of Assets of a Variable Life Insurance Separate Account.

(1) Market Value.

(a) Investments of the separate account shall be valued at their market value on the date of valuation.

(b) Market value for investments traded on the recognized exchanges means the last reported sale price on the date of valuation. If there has been no sale on that date, the market value means the last reported bid quotation on the date of valuation.

(c) Market value for investments listed on the NASDAQ System means the last representative bid quotation on the valuation date. If an investment ceases to be listed but continues to be traded over the counter, it shall be valued at the lowest bid quotation as it appears on the National Quotation Bureau sheets.

(d) If the valuation date referred to in §E(1)(b) and (c) of this regulation is a day when the exchange or the NASDAQ System is not open for business, the valuation date shall be the last date when the exchange or the NASDAQ System was open for business.

(2) If an investment ceases to be traded, it shall be valued at fair value as determined in good faith by or at the direction of the Board of Directors of the insurer but not in excess of the last reported bid quotation. Within 30 days, notification of cessation of trading of any investment shall be reported by the insurer to the insurance commissioner of the state of domicile of the insurer. That commissioner shall within a reasonable period of time determine the method of valuation or disposition of this investment.

F. Separate Account Investment Policy.

(1) The investment policy of a separate account operated by a domestic insurer filed under Regulation .03B(3) of this chapter may not be changed without the approval of the Insurance Commissioner.

(2) With respect to changes of investment policy for which the Commissioner must give his approval, the following regulations shall apply:

(a) Approval shall be deemed to be given 60 days after the date the request for approval was filed with the Commissioner, unless he notified the insurer before the end of the 60-day period of his determination that the proposed change is a material change in the investment policy.

(b) If the change is deemed material by the Commissioner, he shall approve the change only if he determines, after a public hearing, that the change does not appear detrimental to the interest of the policyholders of the insurer.

(c) At least 30 days before any public hearing under §F(2)(b) of this regulation, the insurer shall mail a notice to each policyholder and to the insurance commissioner of each state in which the affected variable life insurance policies are being sold. This notice shall describe the proposed change in investment policy, list the reasons, designate the date and place of the public hearing, inform the policyholder of the procedures to be followed in commenting on the change, and describe the conduct of the meeting. This notice shall be in a form approved by the Commissioner.

(d) Within 60 days after the public hearing, the Commissioner shall approve or deny the proposed change in investment policy.

(e) If a policyholder objects to the proposed change and the change is allowed by the Commissioner, the objecting policyholder shall be given the option within 60 days of notification to the policyholder of the approval by the Commissioner of the change, of converting, without evidence of insurability, under one of the following options, to a fixed benefit life insurance policy issued by the insurer or an affiliate:

(i) If the policy is in force on a premium paying basis, either:

(aa) Conversion as of the original issue age to a substantially comparable permanent form of fixed benefit life insurance, based on the insurer's premium rates for fixed benefit life insurance at the original issue age, for an amount of insurance not exceeding the death benefit of the variable life insurance policy on the date of conversion; or

(bb) Conversion as of the attained age to a substantially comparable permanent form of fixed benefit life insurance for an amount of insurance not exceeding the excess of the death benefit of the variable life insurance policy on the date of conversion over its cash value on the date of conversion if the policyholder elects to surrender the variable life policy for its cash value, or the death benefit payable under any paid-up insurance option if the policyholder elects the nonforfeiture option under the variable life policy.

(ii) If the policy is in force as paid-up variable life insurance, then conversion will be to a substantially comparable paid-up fixed benefit life insurance policy for an amount of insurance not exceeding the death benefit of the variable life insurance policy on the date of conversion. If conversion is made pursuant to §F(2)(e)(i)(aa) or F(2)(e)(ii) of this regulation then:

(aa) If the cash value of the variable life insurance policy exceeds the cash value of the fixed benefit life insurance policy, the difference shall be paid to the policyholder;

(bb) If the cash value of the fixed benefit life insurance policy exceeds the cash value of the variable life insurance policy, the difference shall be paid by the policyholder; and

(cc) Any indebtedness under the variable life insurance policy shall become indebtedness under the fixed benefit policy, provided that any excess of this indebtedness over the cash value of the fixed benefit policy on the date of conversion shall be deducted from any amount otherwise payable to the policyholder.

G. Charges Against a Variable Life Insurance Separate Account. The insurer shall disclose in writing, before or contemporaneously with delivery of the policy, each charge that may be made against the separate account, including:

(1) Taxes or reserves for taxes attributable to investment gains and income of the separate account;

(2) Actual cost of reasonable brokerage fees and similar direct acquisition and sales costs incurred in the purchase or sale of separate account assets;

(3) Actuarially determined costs of insurance (tabular costs) and the release of reserves and benefit base consistent with the release of separate account liabilities;

(4) Charges for administrative expenses and investment management expenses, including internal costs attributable to the investment management of assets of the separate account;

(5) A charge, at a rate specified in the policy for mortality and expense guarantees;

(6) Any amounts in excess of those required to be held in the separate account; and

(7) Charges for incidental insurance benefits.

H. Standards of Conduct. An insurer seeking approval to enter into the variable life insurance business in this State shall adopt by formal action of its Board of Directors and file with the Commissioner a written statement specifying the standards of conduct of the insurer, its officers, directors, employees, and affiliates with respect to investments of variable life insurance separate accounts and variable life insurance operations. These standards of conduct shall be binding on the insurer and those to whom it refers and shall contain at a minimum the items contained in §I(2) of this regulation.

I. Conflicts of Interest.

(1) Rules under any provision of the insurance laws of this State or any regulation applicable to the officers and directors of insurance companies with respect to conflicts of interest shall apply also to members of any separate account's committee or other similar body. An officer or director of the company or any member of any managing committee or body of a separate account may not receive directly or indirectly a commission or other compensation with respect to the purchase or sale of assets of the separate account. The board of directors of the insurer shall be responsible for all acts concerning the separate account.

(2) Unless otherwise approved in writing by the Commissioner in advance of the transaction, with respect to variable life insurance separate accounts, an insurer or affiliate of an insurer may not:

(a) Sell to or purchase from any separate account established by the insurer any securities or other property, other than variable life insurance policies;

(b) Purchase or allow to be purchased for any separate account securities of which the insurer or an affiliate is the insurer, or securities of a corporation in which an officer or director of the insurer or an affiliate or any member of the managing committee or body owns 3 percent or more of the common stock or shares;

(c) Accept compensation, other than a regular salary or wages from the insurer or affiliate, for the sale or purchase of securities to or from any separate account other than as provided in §I(3)(c) of this regulation;

(d) Engage in a joint transaction, participation, or common undertaking by which the insurer of an affiliate participates with any separate account in a transaction in which an insurer or any of its affiliates obtains an advantage in the price of quality of the item purchased, in the service received, or in the cost of the service, and the insurer or any of its other affiliates is disadvantaged in any of these respects by the same transaction;

(e) Borrow money or securities from any separate account other than under a policy loan provision.

(3) No provision of this chapter may be construed to prohibit:

(a) The investment of separate account assets in securities issued by one or more investment companies registered pursuant to the federal Investment Company Act of 1940 which is sponsored or managed by the insurer or an affiliate, and the payment of investment management or advisory fees on the assets.

(b) The combination of orders for the purchase or sale of securities for the insurer, an affiliate, any separate accounts, or any one or more of them, which is for their mutual benefit or convenience as long as any securities so purchased or the proceeds of any sale of securities are allocated among the participants on some predetermined basis expressed in writing which is designed to assure the equitable treatment of all participants.

(c) An insurer or an affiliate to act as a broker or dealer in connection with the sale of securities to or by the separate account. However, a commission, fee, or remuneration charged may not exceed the minimum broker's commission established for any transaction by any national securities exchange through which the transaction could be effected, or when the charges are subject to negotiation, or when no minimum charge is applicable, then the charge shall be consistent with the charges prevailing in the ordinary course of business in the community where the transaction is effected.

(d) The rendering of investment management or investment advisory services by an insurer or affiliate, for a fee, subject to the provisions of this chapter.

(4) Upon the written request of an insurer or an affiliate, the Commissioner may approve a particular transaction or series of proposed transactions which would otherwise be prohibited under §I(2) of this regulation, if the Commissioner determines that this transaction is not unfair or inequitable to persons affected under the circumstances of the transactions.

J. Investment Advisory Services to a Separate Account.

(1) An insurer may not enter into a contract under which any person undertakes, for a fee, to regularly furnish investment advice to the insurer with respect to its separate accounts maintained for variable life insurance policies, unless:

(a) The person providing the advice is registered as an investment adviser under the federal Investment Advisers Act of 1940; or

(b) The insurer has filed with the Commissioner and continues to file annually the following information and statements concerning the proposed adviser:

(i) The name and form of organization, state of organization, and its principal place of business;

(ii) The names and addresses of its partners, officers, directors, and persons performing similar functions, or, if this investment adviser is an individual, of the individual;

(iii) A written standard of conduct complying in substance with the requirements of §H of this regulation, which has been adopted by the investment adviser and is applicable to the investment adviser, its officers, directors, and affiliates;

(iv) A statement provided by the proposed adviser as to whether the adviser or a person associated with the adviser:

(aa) Has been convicted within 10 years of any felony, or of a misdemeanor arising out of this person's conduct as an employee, salesman, officer or director of an insurance company, a bank, an insurance agent, a securities broker, or an investment adviser, involving embezzlement, fraudulent conversion, or misappropriation of funds or securities, or involving the violation of 18 U.S.C. §1341, 1342, or 1343;

(bb) Has been permanently or temporarily enjoined by order, judgement, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, or dealer, or as an affiliated person or as an employee of an investment company, bank, or insurance company, or from engaging in or continuing conduct or practice in connection with any of these activities;

(cc) Has been found by federal or state regulatory authorities to have willfully violated, or has acknowledged willful violation of, any provision of federal or state securities laws or state insurance laws or of any rule or regulation under these laws;

(dd) The adviser or a person associated with the adviser has within the last 10 years signed a consent order with a federal or state regulatory authority that the adviser or associated person may not in the future engage in any of the aforementioned violations; or

(ee) Has been censured, denied an investment adviser registration, had a registration as an investment adviser revoked or suspended, or been barred or suspended from being associated with an investment adviser by order of federal or state regulatory authorities; and

(c) The investment advisory contract shall be in writing and provide that it may be terminated by the insurer without penalty to the insurer or the separate account upon no more than 60 days' written notice to the investment adviser.

(2) After notice and opportunity for hearing, the Commissioner may require, by order, the investment advisory contract to be terminated if he deems continued operation to be hazardous to the public or the insurer's policyholders.

Cross References

31.09.02.02B(4)

31.09.02.03B(1)

31.09.02.03B(2)

31.09.02.03C(4)

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.07 Information Furnished to Applicants.

A. An insurer delivering or issuing for delivery in this State a variable life insurance policy shall deliver to the applicant for the policy, and obtain a written acknowledgement of receipt from the applicant coincident with or before the execution of the application, the following information:

(1) A summary explanation, in nontechnical terms, of the principal features of the policy, including a description of the manner in which the variable benefits will reflect the investment experience of the separate account and the factors which affect the variation. This explanation shall include notices of the provisions required by Regulation .04D(1)(e) and D(6) of this chapter.

(2) A statement of the investment policy of the separate account, including:

(a) A description of the investment objective and orientation intended for the separate account and the principal types of investments intended to be made; and

(b) Any restriction or limitations on the manner in which the operations of the separate account are intended to be conducted.

(3) A statement of the net investment return of the separate account for each of the last 10 years for which the separate account was in existence.

(4) A statement describing, as an approximate percentage of an annual gross premium for each year and for the life of the policy, all commission or equivalent payments to be paid to all agents or other persons as a result of the proposed sale for each year of the policy for which payments are to be made. As used in this subsection, commissions means all monies and other valuable consideration, including but not limited to prizes, bonuses paid directly or indirectly to, for, or on behalf of the selling agent as compensation for services in the sale of variable life insurance.

(5) A statement of the annual taxes, brokerage fees, and similar costs, and the charges, expressed as an annual percentage, levied against the separate account during the previous year.

(6) A summary of the method to be used in valuing assets held by the separate account.

(7) A summary of the federal income tax liabilities of the policy applicable to the insured, the policy owner, and the beneficiary.

(8) If the applicant is furnished illustrations of benefits payable under a variable life insurance contract, these illustrations shall be prepared by the insurer and may not include projections of past investment experience into the future or attempted predictions of future investment experience, provided that nothing in this subsection prohibits the use of hypothetical assumed rates of return to illustrate possible levels of benefits if it is made clear that the assumed rates are hypothetical only.

(9) A prominent statement either in contrasting color or in boldface type at least four points larger than the type size of the largest type used in the text of any provision on the page, providing in substance the following information:

(a) The purpose of this variable life insurance policy is to provide insurance protection for the beneficiary named in the policy;

(b) A claim is not made that this variable life insurance policy is in any way similar or comparable to a systematic investment plan of mutual fund.

B. The requirements of this regulation shall be deemed to have been satisfied to the extent that a disclosure containing information required by this regulation is delivered, either in the form of:

(1) A prospectus included in a registration statement relating to the policies which satisfies the requirements of the federal Securities Act of 1933 and which was declared effective by the Securities and Exchange Commission; or

(2) All information and reports required by the federal Employee Retirement Income Security Act of 1974 if the policies are exempted from the registration requirements of the federal Securities Act of 1933 pursuant to §3(a)(2).

Cross References

31.09.02.03G(1)(b)

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.08 Applications.

The application for a variable life insurance policy shall contain:

A. A prominent statement that the death benefit may be variable or fixed under specified conditions;

B. A prominent statement that cash values may increase or decrease in accordance with the experience of the separate account (subject to any specified minimum guarantees);

C. Questions designed to elicit information which enables the insurer to determine the suitability of variable life insurance for the applicant.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.09 Reports to Policyholders.

An insurer delivering or issuing for delivery in this State a variable life insurance policy shall mail to each variable life insurance policyholder at his or her last known address the following reports:

A. Within 30 days after each anniversary of the policy, a statement or statements of the cash surrender value, death benefit, any partial withdrawal or policy loan, any interest charge, and any optional payments allowed pursuant to Regulation .04E of this chapter under the policy computed as of the policy anniversary date. This statement may be furnished within 30 days after a specified date in each policy year as long as the information contained in it is computed as of a date not more than 45 days before the mailing of the notice. This statement shall state in contrasting color or distinctive type that, in accordance with the investment experience of the separate account, the cash values and the variable death benefit may increase or decrease, and shall prominently identify any value described which may be recomputed before the next statement required by this section. If the policy guarantees that the variable death benefit on the next policy anniversary date will not be less than the variable death benefit specified in the statement, the statement shall be modified to indicate this. For flexible premium policies, the report required by this paragraph shall:

(1) Contain a reconciliation of the change since the previous report in cash value and cash surrender value, if different, because of payments made (less deductions for expense charges), withdrawals, investment experience, insurance charges, and any other changes made against the cash value; and

(2) Show the projected cash value and cash surrender value, if different, as of 1 year from the end of the period covered by the report assuming that:

(a) Planned periodic premiums, if any, are paid as scheduled;

(b) Guaranteed costs of insurance are deducted; and

(c) The net return is equal to the guaranteed rate or, in the absence of a guaranteed rate, is not greater than zero. If the projected value is less than zero, a warning message shall be included that states that the policy may be in danger of terminating without value in the next 12 months unless additional premium is paid.

B. Annually, a statement or statements including:

(1) A summary of the financial statement of the separate account based on the annual statement last filed with the Commissioner;

(2) The net investment return of the separate account for the last year and, for each year after the first, a comparison of the investment rate of the separate account during the last year with the investment rate during prior years, up to a total of 5 years when available;

(3) A list of investments held by the separate account as of a date not earlier than the end of the last year for which an annual statement was filed with the Commissioner;

(4) Charges, taxes, and brokerage fees determined on an accrual basis payable by the separate account during the previous year, each expressed as a dollar amount and a percentage and the total expressed as a dollar amount and as a percentage of the assets of the separate account;

(5) A statement of any change, since the last report, in the investment objective and orientation of the separate account, in any investment restriction or material quantitative or qualitative investment requirement applicable to the separate account, or in the investment adviser of the separate account;

(6) The name of each broker or dealer handling portfolio transactions on behalf of the separate account in which the insurer or an affiliate has a controlling interest and the nature of these transactions and the amount of compensation received by the broker or dealer from business originating with the separate account;

(7) The names and principal occupations of each principal executive officer and each director of the insurer; and

(8) The names of all parents of the insurer and the basis of control of the insurer, and the name of any person who is known to own, of record or beneficially, 10 percent or more of the outstanding voting securities of the company.

C. For flexible premium policies, if the amounts available under the policy on any processing day to pay the charges authorized by the policy are less than the amount necessary to keep the policy in force, until the next processing day, a report indicating the minimum payment required under the terms of the policy to keep it in force and the length of the grace period for payment of the amount.

Cross References

31.09.02.03G(1)(c)

31.09.02.04D(1)(b)(ii)

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.10 Foreign Companies.

If the law or regulation in the place of domicile of a foreign company provides a degree of protection to the policyholders and the public which is substantially similar to that provided by these regulations, the Commissioner may consider compliance with the law or regulation as compliance with these regulations.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.11 Qualification of Producers for the Sale of Variable Life Insurance.

A. Qualification to Sell Variable Life Insurance.

(1) A person may not sell or offer for sale in this State any variable life insurance policy unless the person is a producer and has filed with the Commissioner, in a form satisfactory to the Commissioner, evidence that the person holds a license and other authorizations which may be required by any federal or State securities law for the solicitation, sale, or negotiation of variable life insurance.

(2) A person may not solicit, sell, or act or aid in any manner in the negotiation of a variable life insurance policy unless such person has been so qualified in accordance with the provisions of Insurance Article, §§10-105 and 10-109, Annotated Code of Maryland, and is licensed by the Commissioner to act as a producer with life and variable lines of authority.

B. Reports of Disciplinary Actions and Criminal Prosecution. A person qualified in this State under this regulation to act as a producer of variable life insurance policies shall report to the Commissioner in accordance with Insurance Article, §§10-126(f) and (g), Annotated Code of Maryland:

(1) Suspension or revocation of a producer license in any other state or territory of the United States;

(2) Imposition of disciplinary sanction, including suspension or expulsion from membership, suspension or revocation or denial of registration imposed upon the producer by any national securities exchange or national securities association or any federal, state, or territorial agency with jurisdiction over securities or variable life insurance;

(3) Judgment or injunction entered against the producer on the basis of conduct deemed to have involved fraud, deceit, misrepresentation, or violation of any insurance or securities law or regulation; or

(4) Criminal prosecution as described under Insurance Article, §10-126(g), Annotated Code of Maryland.

C. Refusal to Qualify Producer to Sell Variable Life Insurance — Suspension, Revocation, or Nonrenewal of Qualification. The Commissioner may reject an application or suspend, revoke, or refuse to renew a producer’s qualification under this regulation to solicit, sell, or negotiate variable life insurance policies upon any ground that would bar the applicant or producer from being licensed to solicit, sell, or negotiate life insurance policies in this State. The rules governing proceedings relating to the rejection of a producer’s application, suspension or revocation of a producer’s license or refusal to renew a producer’s license shall also govern proceedings under this regulation.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.12 Voting Rights.

To the extent an insurer deems it necessary to comply with any applicable state or federal laws, with respect to any separate account, including, without limitation, a separate account which is a management investment company or unit investment trust, the insurer may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of the account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with the company, to manage the business of the account.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.02.13 Separability and Applicability of Other Regulations.

A. If any provision of this chapter or its application to any person or circumstance is held to be invalid, the remainder of the chapter and the application of the provision to other persons or circumstances is not affected.

B. The provisions of COMAR 31.09.04 and any other regulations promulgated by the Commissioner with reference to contracts on a variable basis or with reference to life insurance or the conduct of the business of life insurance shall apply to variable life insurance to the extent that the provisions of the other regulations are not in conflict with the requirements of this chapter.

History

Administrative History: Effective date: July 1, 1979 (6:10 Md. R. 841)
Administrative History: Regulation .04C amended effective December 27, 1983 (10:24 Md. R. 2189)
Administrative History: Regulation .11A amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.43 to COMAR 31.09.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03C amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .03E amended effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .04 amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .04C amended effective August 6, 2012 (39:15 Md. R. 965)
Administrative History: Regulation .06G amended effective October 11, 2004 (31:20 Md. R. 1487)
Administrative History: Regulation .09A amended effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .09C adopted effective May 21, 2018 (45:10 Md. R. 504)
Administrative History: Regulation .11 amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .11A amended effective July 27, 2020 (47:15 Md. R. 713)
Authority: Insurance Article, §§2-109 and 16-601—16-603, Annotated Code of Maryland

31.09.03 Industrial Life Insurance—Dividends Required

COMAR 31.09.03.01 Dividends.

All policies of industrial life insurance heretofore or hereafter issued by any life insurance company authorized to do business in Maryland and operating as a mutual insurer; and all policies of industrial life insurance issued by any life insurance company operating as a mutual insurer at the time the policies were issued but which the insurer subsequently operates as a stock insurer; and all policies of industrial life insurance issued on or after January 1, 1941, by any stock insurer, which policies do not specifically state that they are nonparticipating or do not specifically state that they do not share in the surplus earnings of the company, shall have apportioned to them in the form of dividends payable on each anniversary date of each of the policies occurring on and after January 1, 1941, an equitable share of the policies in the surplus earnings of the insurer unless the insurer furnishes proof satisfactory to the Commissioner that the policies have not contributed to the surplus earnings of the insurer during the calendar year immediately preceding the policy anniversary. With the approval of the Commissioner, and if not in conflict with policy provisions, the insurer may elect that the dividends be credited on a specified date on each calendar year rather than on policy anniversaries.

History

Administrative History: Effective date: August 15, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.49 to COMAR 31.09.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 16-206, Annotated Code of Maryland

COMAR 31.09.03.02 Manner of Payment of Dividends.

The dividends shall be paid in the manner specified in the policy, or, if the policy does not specify a manner of payment, then the dividends shall, at the option of the insurer, or if the insurer does not make an election, then at the option of the policyholder, be:

A. Applied to provide paid-up additions to the policy;

B. Paid in cash;

C. Left to accumulate at a rate of interest not less than 2-1/2 percent, the accumulated dividends and interest to be payable on termination of the insurance if not previously credited to increase an operative nonforfeiture benefit under the policy; or

D. Applied to the payment of any premium payable under the policy or, if no further premiums are payable, the dividends shall be credited in accordance with one of the aforementioned methods.

History

Administrative History: Effective date: August 15, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.49 to COMAR 31.09.03 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 16-206, Annotated Code of Maryland

31.09.04 Contracts on a Variable Basis

COMAR 31.09.04.01 Authority and Purpose.

The issuance or delivery of contracts on a variable basis (hereinafter sometimes referred to as “contracts”) in Maryland in any manner not in compliance with this chapter shall be deemed to be the transaction of insurance business hazardous to policyholders and the public, and contrary to the public interest.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.02 Definitions.

A. In this chapter the following terms have the meanings indicated.

B. Terms Defined.

(1) “Contracts on a variable basis” means annuity contracts, as defined in Insurance Article, §1-101(e), Annotated Code of Maryland, which provide for payments varying directly with the investment experience of a segregated asset account, hereinafter referred to as “variable contract account”, as distinguished from “fixed annuity contracts”. This definition does not include any of the forms of insurance prohibited by Insurance Article, §§16-112 and 27-207, Annotated Code of Maryland.

(2) “Fixed annuity contracts” or “guaranteed annuity contracts” means annuity contracts, as defined in Insurance Article, §1-101(e), Annotated Code of Maryland, which provide for payment of fixed dollar amounts guaranteed in the contract.

C. A participating annuity contract providing for payment by the insurer of dividends or participation in the divisible surplus accruing under the contract in addition to fixed dollar payments guaranteed in the contract shall be deemed a fixed annuity contract and not a contract on a variable basis if, according to assumptions made by the insurer at the time the contract is issued, at least 50 percent of the consideration for the contract is required to support the fixed dollar guarantees.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.03 Qualifications of Producers.

A. Qualification to Sell Variable Annuity Contracts.

(1) A person may not sell or offer for sale in this State any variable annuity contract unless the person is a producer and has filed with the Commissioner, in a form satisfactory to the Commissioner, evidence that the person holds a license and other authorizations which may be required by any federal or State securities law for the solicitation, sale, or negotiation of variable annuities.

(2) A person may not in this State solicit, sell, or act or aid in any manner in the negotiation of any variable contract unless the person has been so qualified in accordance with the provisions of Insurance Article, §§10-105 and 10-109, Annotated Code of Maryland, and is licensed by the Commissioner to act as a producer with life and variable lines of authority.

B. Reports of Disciplinary Actions and Criminal Prosecution. A person qualified in this State under this regulation to act as a producer of variable annuity contracts shall report to the Commissioner in accordance with Insurance Article, §§10-126(f) and (g), Annotated Code of Maryland:

(1) Suspension or revocation of a producer license in any other state or territory of the United States;

(2) Imposition of disciplinary sanction, including:

(a) Suspension or expulsion from membership; or

(b) Suspension, revocation, or denial of registration imposed on the producer by any national securities exchange or national securities association or any federal, state, or territorial agency with jurisdiction over securities or variable annuity contracts;

(4) Criminal prosecution as defined in Insurance Article, §10-126(g), Annotated Code of Maryland.

C. Refusal to Qualify Producer to Sell Variable Annuity Contracts—Suspension, Revocation, or Nonrenewal of Qualification. The Commissioner may reject an application or suspend, revoke, or refuse to renew producer’s qualification under this regulation to solicit, sell, or negotiate variable annuity contracts upon any ground that would bar the applicant or producer from being licensed to solicit, sell, or negotiate life insurance policies in this State. The rules governing proceedings relating to the rejection of a producer’s application, suspension or revocation of a producer’s license, or refusal to renew a producer’s license shall also govern proceedings under this regulation.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.04 Qualifications of Insurers.

A. An insurer may issue the contracts provided it:

(1) Otherwise qualifies as a life insurance company;

(2) Has surplus assets or funds (within the meaning of Insurance Article, §4-105, Annotated Code of Maryland) as of the end of the preceding calendar year of at least $1,000,000; and

(3) Complies with one of the following:

(a) Is limited by its charter and bylaws exclusively to the sale of contracts on a variable basis, including additional benefits operating to safeguard the contract from lapse, or to provide a special surrender value, or special benefit, or annuity, in the event of total and permanent disability of the holder. An insurance company so limited may not be disqualified by reason of being a subsidiary of a stock or mutual insurance company transacting other lines of business.

(b) Has assets in excess of $50,000,000 and has been licensed for the sale of life insurance and annuities in this State for at least 10 consecutive years immediately before the date of issuance of the contracts on a variable basis.

(c) Has capital and surplus funds in excess of $10,000,000, and has been continuously and actively engaged in the sale of contracts on a variable basis in its state of domicile for at least 5 consecutive years immediately before the effective date of the authorization to issue the contracts in Maryland.

(d) By reason of its capital structure, surplus, amount of business in force, and plan of operations, in the opinion of the Commissioner, substantially conforms to the requirements of §A(3)(a), (b), or (c) of this regulation, or affords equivalent protection to contract holders; and provided further that the insurer shall have been specifically authorized by the Commissioner to issue the contracts after demonstrating to the Commissioner's satisfaction that it is qualified to do so.

B. In determining the qualifications of the insurer, the Commissioner shall consider, among other things:

(1) The history, reputation, and financial stability of the insurer;

(2) The character, experience, and competence of the directors and officers of the insurer;

(3) The proposed methods of advertising, soliciting, and selling the contracts; and

(4) Whether, in the case of a foreign or alien insurer, regulation under the laws of its state of domicile provides protection to the public and to contract holders substantially equal to that provided by the laws of Maryland and the regulations of the Maryland Insurance Administration.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.05 Filing, Approval of Forms.

A. A contract on a variable basis may not be issued or delivered in this State unless the form of the contract has been filed with and approved by the Commissioner and unless the form of application for the contract, and of any certificate to be used with the contract issued on a group basis, have been filed with and approved by the Commissioner.

B. The Commissioner shall disapprove or withdraw previous approval of the form of contract, application, or certificate for any of the reasons specified in Insurance Article, §12-205, Annotated Code of Maryland, or if:

(1) Sales of the contracts are being solicited by any means of advertising, communication, or dissemination of information which involves misleading or inadequate description of the provisions of the contract or which involves illustrations of benefits under the contracts based on projection into the future of past investment experience or on attempted predictions of future investment experience;

(2) The procedures to be followed by the insurer in determining the dollar amount of variable benefits or other contractual payments or values under the contract are inequitable or unreasonable;

(3) The expense, mortality, or investment increment factors stated in the contract are unreasonable; or

(4) The contracts do not conform to or are issued contrary to this chapter or any other regulations promulgated by the Commissioner.

Cross References

31.09.04.08I(3)

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.06 Attainment of Balance.

A. Before the issuance of any individual contract on a variable basis, the insurer shall reasonably satisfy itself that the total amounts being applied and proposed to be applied to provide the prospective annuitant with income on a variable basis will not substantially exceed the amount which would be required to purchase the income in a predetermined dollar amount which the annuitant can reasonably expect to receive.

B. In determining the reasonably expectable fixed dollar income, the insurer may consider, alone or in combination, any direct source, such as a pension, annuity, Social Security benefit, or trust fund, as well as any indirect source, such as an asset having a principal amount expressed in fixed dollars and capable of being used to produce a fixed dollar income, as, for example bonds, mortgages or life insurance policies.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.07 Contract Provisions.

A. Any contract on a variable basis issued or delivered in this State shall contain a statement of the essential features of the procedure to be followed by the insurer in determining the dollar amount of variable benefits or other contractual payments or values under the contract and shall state in clear terms that this amount may decrease or increase according to this procedure. A contract, and any certificate evidencing variable benefits issued pursuant to the contract on a group basis, and any application for the contract or certificate shall have prominently printed on its first page in boldface type not less than 10 point, a clear statement that payments and termination values provided by the contract are variable and not guaranteed as to dollar amount.

B. A contract issued or delivered in this State shall stipulate the expense, mortality, and investment increment factors to be used in computing the dollar amount of variable benefits or other contractual payments or values under the contract, and shall guarantee that expense and mortality experience will not adversely affect the dollar amount.

C. A contract shall contain all of the standard or uniform provisions required by Insurance Article, Annotated Code of Maryland, except that the Commissioner will give consideration to waiving the requirements of former Article 48A, §408A, Annotated Code of Maryland (transferred to the Session Laws by §6, Ch. 57, Acts of 1997), upon a showing by the insurer satisfactory to the Commissioner that the requirements are inconsistent with the purposes of the contract.

D. An individual contract on a variable basis may not be issued or delivered in this State unless it contains in substance the following provisions:

(1) That in event of default in payment of any consideration beyond the period of grace allowed by the contract for the payment thereof, the insurer will make payment of the value of the contract in accordance with an equitable plan specified in the contract, this payment to commence not later than the date contractual payments by the insurer would have begun if there had been no default.

(2) That upon request of the contract holder received by the insurer at least 90 days before the date contractual payments by the insurer would otherwise begin, the insurer will make payment of the value of the contract in accordance with an equitable plan specified in the contract which may be selected by the contract holder, this plan to become effective as of the date contractual payments under the contract would otherwise begin, unless another date is requested by the contract holder and agreed to by the insurer.

(3) That the insurer will mail to the contract holder at least once in each contract year, a report in a form approved by the Commissioner which shall include a statement of the number of units credited to the contract, the dollar value of a unit, and the dollar value of the total number of units credited, all this information to be furnished as of a stated date which shall be not more than 2 months before the date of mailing.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.08 Administration and Accounting Procedures.

A. Any domestic life insurer specifically authorized by the Commissioner to issue contracts on a variable basis and any foreign or alien life insurer specifically authorized by the Commissioner to deliver these contracts in Maryland may establish and operate one or, upon express approval by the Commissioner, more than one, segregated asset accounts to be known as variable contract accounts. An insurer which has established a separate investment account as defined in Insurance Article, §5-512, Annotated Code of Maryland, may, upon express approval by the Commissioner, use the same segregated asset account as both a separate investment account and a variable contract account.

B. Except as may be otherwise specifically provided by the contract, all amounts received in connection with any contract on a variable basis shall be placed in the appropriate variable contract account, and all the liabilities of the contract shall be set up in that account.

C. The investments and liabilities of a variable contract account at all times shall be clearly identifiable and distinguishable in the books or other records of the insurer from the other investments and liabilities of the insurer. An insurer may not hypothecate any of the assets of any variable contract account or borrow on the security of these assets. An investment, other than cash, in any variable contract account, in any separate account, or in the insurer's general investment account may not be transferred by sale, exchange, substitution, or otherwise from one account to another except with the Commissioner's approval.

D. Assets allocated to a variable contract account shall be owned by the insurer and the insurer may not be, or hold itself out to be, a trustee with respect to these assets.

E. An insurer issuing a contract on a variable basis shall, annually on or before March first, submit to the Commissioner a true statement for the business of its variable contract accounts. This statement shall be in such form and content as is approved or adopted for current use by the National Association of Insurance Commissioners or its successor organization and as supplemented for additional information required by the Commissioner and shall include details as to all of the income, disbursements, assets, and liability items associated with the variable contract accounts.

F. The valuation of variable contract account assets for all purposes, including annual statements of the insurer to the Commissioner, shall be determined in accordance with the market value of the assets notwithstanding the application of other valuation methods to assets of the insurer other than the assets of the variable contract accounts. The valuation may be made as of such valuation dates as the insurer shall establish from time to time, except as otherwise required for the annual statements to the Commissioner. To accomplish the valuation at market value any equity security purchased for variable contract account shall be a security:

(1) Which is listed or admitted to trading on a securities exchange located in the United States of America or Canada; or

(2) Which is publicly held and traded in the over-the-counter market as defined by the Commissioner and as to which market quotations have been available.

G. The reserve liability for contracts on a variable basis shall be established by the Commissioner pursuant to the requirements of Insurance Article, Title 5, Subtitle 3, Annotated Code of Maryland, and in accordance with actuarial procedures that recognize the variable nature of the benefits provided.

H. Investments.

(1) An insurer may not invest more than $10,000 or 5 percent of any one variable contract account, whichever is greater, in the stock or shares of any one corporation, mutual fund, or investment company, except that during the first year of operation of a variable contract account having total assets of less than one million dollars, the insurer may invest up to 10 percent of the account, or $10,000 if greater, in these stock or shares provided the account is not a segregated asset account which also serves as a separate investment account as defined in Insurance Article, §5-512, Annotated Code of Maryland. However, with express approval of the Commissioner, an insurer may invest a greater proportion of the assets of a variable contract account which does not serve as a separate investment account in the shares of a nonaffiliated open-end diversified management investment company registered with the Securities and Exchange Commission under the federal Investment Company Act of 1940, as amended (an open-end diversified management investment company so registered being hereinafter sometimes referred to as “management company”), if the investment policy of the nonaffiliated management company conforms to the investment requirements of this chapter. The term “affiliated” or “affiliate” as used in this chapter, except in Regulation .09 of this chapter, means an “affiliated person” as defined in the federal Investment Company Act of 1940, as amended.

(2) An insurer may not purchase for a variable contract account common stock or shares of any corporation in excess of 5 percent of the total issued and outstanding common stock or shares of that corporation. However, with express approval of the Commissioner, an insurer may purchase in excess of 5 percent of the total number of outstanding shares of an open-end diversified management investment company registered with the Securities and Exchange Commission under the federal Investment Company Act of 1940, as amended.

(3) An insurer may not purchase for a variable contract account common stock or shares of any corporation unless investment in the common stock or shares of any corporation is authorized as a permissible investment under Insurance Article, §§16-601—16-603, Annotated Code of Maryland.

(4) An insurer may not purchase for a variable contract account any securities of a corporation which is a subsidiary or affiliate of the insurer or in which a subsidiary or affiliate of the insurer or a director or officer of the insurer owns 3 percent or more of the common stock or shares.

(5) An insurer may purchase securities or other investments for its variable contract accounts through licensed brokers or by direct placement, but these purchases may not be made directly or indirectly from a director, officer, subsidiary, or affiliate of the insurer.

(6) Assets of a variable contract account may be sold for cash in a bona fide sale made directly to the purchasers or through licensed brokers but these sales may not be made directly or indirectly to any director, officer, subsidiary, or affiliate of the insurer.

(7) An insurer may not purchase or sell any of the investments of a variable contract account through a broker who is a director or officer of the insurer or of an affiliate or subsidiary of the insurer.

(8) To the extent approved by the Commissioner, the restrictions of §H(4), (5), (6), and (7) of this regulation are not applicable to investments in the shares of an affiliated open-end diversified management investment company registered with the Securities and Exchange Commission under the federal Investment Company Act of 1940, as amended, which management company has been approved by the Commissioner for the variable contract account in accordance with §I of this regulation.

I. With the express approval of the Commissioner, an insurer may invest all or any portion of the assets of a variable contract account which does not serve as a separate investment account in the shares of an affiliated open-end diversified management investment company registered with the Securities and Exchange Commission under the federal Investment Company Act of 1940, as amended, if the insurer, the affiliated management company, and the sponsor and/or holding company, as the case may be, of the insurer and the affiliated management company agree that:

(1) The investments to be made by the affiliated open-end diversified management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, will conform to the requirements of §H of this regulation, which, except for the provisions of the insurer, would otherwise be required to observe had the investments been made for a variable contract account of the insurer;

(2) An investment, other than cash, may not be transferred by sale, exchange, substitution, or otherwise between the insurer, the affiliated management company, and any sponsor, parent, or holding company except with the Commissioner's approval;

(3) In determining compliance with the provisions of Regulation .05B(3) of this chapter, the sales load and other charges, if any, to be made by the affiliated management company shall be added to any charges made in the variable annuity contract of the insurer;

(4) The Commissioner may at any time conduct such examination of the affiliated management company and of the sponsor, parent, or holding company as he deems necessary, the cost of which is to be borne by the insurer in accordance with Insurance Article, §2-208, Annotated Code of Maryland; and

(5) The insurer and the affiliated management company will establish such additional procedures and restrictions as the Commissioner deems necessary to safeguard the interests of contract holders.

(6) Approval under this section shall, to the extent permitted by the Commissioner, supersede the restrictions contained in §H of this regulation. Any approval under this section may be withdrawn by the Commissioner upon 30 days written notice to the insurer, which notice shall specify the reason for the withdrawal. At any time during the 30-day period, the Commissioner may suspend approval under this section by written notice or by telegram, the suspension to become effective immediately upon receipt of the communication from the Commissioner. During suspension of approval, or following withdrawal of approval, the insurer may make no further investments in the affiliated management company unless approval is reinstated.

J. While serving as an elected or appointed officer or as a director or trustee of an insurer authorized to issue contracts on a variable basis, a person may not receive directly or indirectly any commission on the business transactions of the insurer.

K. In connection with the allocation of investment expenses, or in any other respect, an insurer may not discriminate unfairly between variable contract accounts, separate accounts, and the insurer's general investment account, but this provision does not require the insurer to follow uniform investment policies for all its accounts.

L. Maximum Asset Deduction Charge.

(1) The maximum asset deduction charge which an insurer may make against a variable contract account that applies to individual variable contracts for investment expenses and annuity mortality guarantees may not exceed 1-1/2 percent in the aggregate. This maximum charge shall be reduced by the amount of any asset deduction charge for investment expenses made by an affiliated open-end diversified management investment company in which the assets of the variable contract account are invested in accordance with the provisions of §I of this regulation.

(2) The maximum asset deduction charge referred to in §L(1) of this regulation may be increased by the amount of any reasonable additional charge made for guaranteeing the asset values of individual accounts as of specified dates.

(3) The maximum charges allowable under §L(1) of this regulation shall be reduced to reasonably reflect any charges for annuity mortality guarantees made by the insurer by means of deductions from the gross premiums or contributions paid under the contract, if the deductions are not allocated to the variable contract account.

M. For each contract on a variable basis, the insurer shall maintain a history record card, a ledger sheet or a comparable record, showing in addition to the usual stipulated payment or contract consideration information, each net annuity consideration applied and the increment and accumulated balance on either a unit or dollar value basis.

N. Right to Vote.

(1) Variable annuity contract owners shall have the right to vote with respect to the following matters affecting the variable contract account:

(a) The election of members to the variable contract committee or board;

(b) Amendments to the investment policies or objectives of the variable contract account required to be submitted to a vote of contract owners in accordance with the federal Investment Company Act of 1940 as amended or under any other statute;

(d) Any other matters required or determined to be submitted to contract owners for approval or disapproval.

(2) Notice of the voting rights of each contract owner shall be given by furnishing him with a prospectus containing the information or by other proper written notice.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

COMAR 31.09.04.09 Group Contracts.

A contract on a variable basis may be issued as an individual contract or as a group contract, but any contract shall be considered as being issued on a group basis only if it conforms to the description in one of the following sections:

A. A contract issued to an employer providing a plan of retirement annuities for covered employees on the date of issue, the stipulated payments on the contract to be remitted by the employer and to be paid either wholly by the employer or jointly by the employer and the employees. The employees eligible under the contract shall be all of the employees of the employer, or all of any class or classes of employees determined by conditions pertaining to employment, but the contract may exclude classes of employees determined by age. The contract may provide that the term “employees” shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of the affiliated corporations, proprietors, or partnerships is under common control. The contract may provide that the term “employees” shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. A director of a corporate employer may not be eligible under the contract unless the person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. An individual proprietor or partner may not be eligible under the contract unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership.

B. A contract issued to a labor union providing a plan of retirement annuities for at least 25 covered members on the date of issue, the stipulated payments under the contract to be remitted by the union and to be paid wholly from funds contributed by the union, or by the employer or employers of the persons covered, or by both, or partly from these funds and partly from funds contributed by members covered under the contract, but this contract may not require that the entire cost be derived from funds contributed by the insured members specifically for the stipulated payments under it. The members eligible under the contract shall be all of the members of the union or all of any specified class or classes of members determined by conditions pertaining to their employment, or to membership in the union, or to both, but the contract may exclude classes of members determined by age.

C. A contract issued to the trustees of a fund established by an employer or by two or more employers, or by an association of employers which has been in existence for at least 5 years (or with express approval of the Commissioner if less than 5 years), or by one or more labor unions, or by one or more employers and one or more labor unions, providing a plan of retirement annuities for all of the employees of the employer or employers, or all of the employees of the member employers of the association, or all of any class or classes of the employees determined by conditions pertaining to their employment, or all of the members of the union or unions, or all of any class or classes of members determined by conditions pertaining to their employment or to membership in the union, or to both, but the contract may exclude classes of employees or members determined by age. The contract may provide that the term “employees” shall include the individual proprietor or partners if an employer is an individual proprietor or a partnership. A director of a corporate employer may not be eligible under the contract unless the person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. An individual proprietor or partner may not be eligible under the contract unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. The contract may provide that the term “employees” shall include the trustees or their employees, or both, if their duties are principally connected with the trusteeship. The contract shall cover at least 100 persons at date of issue. The contract shall provide that the stipulated payments shall be remitted by the trustees and shall be paid wholly from funds contributed by the employer or employers of the persons covered, or by the union or unions, or by both, or partly from these funds and partly from funds contributed by the persons covered under the contract, but this contract may not require that the entire cost be derived from funds contributed by the covered persons specifically for the stipulated payments under it.

D. A contract issued to an association of persons having a common calling, occupation, or profession, which association was organized and maintained in good faith for purposes other than obtaining annuities and has been in existence for at least 5 years, or with express approval of the Commissioner if less than 5 years, or to the trustees of a fund established by the association, providing a plan of retirement annuities for all the members and employees of the association or all of any specified class or classes of the members and employees. The contract may provide that the terms “employees” or “members” shall include the trustees or their employees, or both, if their duties are principally connected with the trusteeship. The contract shall cover at least 100 persons at date of issue. The contract shall provide that the stipulated payments shall be remitted by the association or by the trustees and shall be paid wholly from funds contributed by the association, or partly from these funds and partly from funds contributed by the persons covered under the contract, or wholly from funds contributed specifically for that purpose by the persons covered under the contract.

E. A contract issued to one or more departments of any federal or state government, or their subdivisions, or of any state college or university, or to an association of persons employed in any such department, which association was organized and maintained in good faith for purposes other than obtaining annuities and has been in existence for at least 5 years, or with express approval of the Commissioner if less than 5 years, or to the trustees of a fund established by a department or association, providing a plan of retirement annuities for all of the employees of the department or all of the members of the association or all of any specified class or classes of employees or members. The contract may provide that the terms “employees” or “members” shall include the trustees or their employees, or both, if their duties are principally connected with the trusteeship. The contract shall cover at least 100 persons at date of issue. The contract shall provide that the stipulated payments shall be remitted by the department, association, or trustees and shall be paid wholly from funds contributed by the department or association, or partly from these funds and partly from funds contributed by the persons covered under the contract, or wholly from funds contributed specifically for that purpose by the persons covered under the contract.

Cross References

31.09.04.08H(1)

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective November 1, 1973
Administrative History: Regulation .03 amended effective August 22, 1988 (15:17 Md. R. 2048)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.42 to COMAR 31.09.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 25, 2016 (43:8 Md. R. 498)
Administrative History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .08L amended effective April 25, 2016 (43:8 Md. R. 498)
Authority: Insurance Article, §§2-109, 8-442(d), and 16-601—16-603, Annotated Code of Maryland

31.09.05 Replacement of Life Insurance and Annuities

COMAR 31.09.05.01 Purpose.

The purpose of this chapter is to:

A. Regulate the activities of insurers and insurance producers with respect to the replacement of existing life insurance and annuities; and

B. Protect the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement or financed purchase transactions by:

(1) Ensuring that purchasers receive information to make a decision in the purchasers' own best interests;

(2) Reducing the opportunity for misrepresentation and incomplete disclosure; and

(3) Establishing penalties for failure to comply with the requirements of this chapter.

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.02 Scope.

A. “Direct Solicitation” Defined. In this regulation, the term “direct solicitation” does not include any group meeting:

(1) Held by an insurance producer solely for the purpose of educating individuals about or enrolling individuals in a plan or arrangement; or

Initiated by an individual employee or group member, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual employee or group member.

B. Exempted Transactions. Unless specifically included, this chapter does not apply to transactions involving the following:

(1) Credit life insurance;

(2) Group life insurance or group annuities if there is no direct solicitation of individuals by an insurance producer;

(3) An application to an insurer that issued an existing life insurance policy or existing annuity contract if:

(a) A contractual change or a conversion privilege is being exercised;

(b) The existing life insurance policy or existing annuity contract is being replaced by the same insurer under a program filed with and approved by the Commissioner; or

(4) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer;

(5) Except as provided in §C of this regulation, life insurance policies or annuity contracts used to fund:

(a) An employee pension or welfare benefit plan that is covered by ERISA;

(b) A plan described by 26 U.S.C. §401(a), 401(k), or 403(b), if the plan, for purposes of ERISA, is established or maintained by an employer;

(c) A governmental or church plan defined in 26 U.S.C. §414, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under 26 U.S.C. §457 of the Internal Revenue Code;

(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor; or

(e) Any other benefit plan qualifying for income tax deductibility of premiums under Title 26 of the United States Code (Internal Revenue Code);

(6) New coverage provided under a life insurance policy or annuity contract if the cost is borne wholly by the insured's employer or by an association of which the insured is a member;

(7) Existing life insurance that is a nonconvertible term life insurance policy that will expire in 5 years or less and cannot be renewed;

(8) Immediate annuities that are purchased with proceeds from an existing annuity contract; or

(9) Structured settlements.

C. Plan or Arrangement Funded Solely by Elective Employee Contributions. Notwithstanding §B(5) of this regulation, this chapter applies to a life insurance policy or annuity contract used to fund a plan or arrangement funded solely by contributions an employee elects to make, whether on a pretax or aftertax basis, if:

(1) The insurer has been notified that plan participants may choose from among two or more insurers; and

(2) There is a direct solicitation of an individual employee by an insurance producer for the purchase of an annuity contract or life insurance policy.

D. Section B(8) of this regulation does not exclude from this chapter an immediate annuity purchased with proceeds from an existing life insurance policy.

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Direct-response solicitation” means a solicitation made:

(a) Through a sponsoring or endorsing entity; or

(b) Individually solely by mail, telephone, internet, or other mass communication medium.

(2) “ERISA” means the federal Employee Retirement Income and Security Act of 1974.

(3) Existing Annuity Contract.

(a) “Existing annuity contract” means an annuity contract that is in force.

(b) “Existing annuity contract” includes an annuity contract that is within an unconditional refund period.

(4) “Existing insurer” means an insurer whose life insurance policy or annuity contract is or will be changed or affected in a manner described in §B(11) of this regulation.

(5) Existing Life Insurance Policy.

(a) “Existing life insurance policy” means an individual life insurance policy that is in force.

(b) “Existing life insurance policy” includes a life insurance policy that is:

(i) Under a binding or conditional receipt;

(ii) Within a conditional refund period; or

(iii) On a paid-up or extended-term basis.

(6) “Financed purchase” means the purchase of a new life insurance policy involving the actual or intended use of funds obtained by the withdrawal, surrender, or borrowing from values of an existing life insurance policy contract to pay all or part of a premium due on the new life insurance policy.

(7) “Illustration” means a presentation or depiction that includes nonguaranteed elements of a life insurance policy over a period of years as defined in COMAR 31.09.09.

(8) “Insurance producer” has the meaning stated in Insurance Article, §1-101(u), Annotated Code of Maryland.

(9) “Policy summary” means:

(a) For life insurance policies or annuity contracts other than universal life insurance policies, a written statement regarding a life insurance policy or annuity contract that contains, to the extent applicable, the following information:

(i) Current death benefit;

(ii) Annual life insurance policy or annuity contract premium;

(iii) Current cash surrender value;

(iv) Current dividend;

(v) Application of current dividend; and

(vi) Amount of outstanding loan; or

(b) For universal life insurance policies, a written statement that contains at least the:

(i) Beginning and end date of the current report period;

(ii) Life insurance policy value at the end of the previous report period and at the end of the current report period;

(iii) Total amounts that have been credited or debited to the life insurance policy value during the current report period, identifying each by type, for example, interest, mortality, expense, and riders;

(iv) Current death benefit at the end of the current report period on each life covered by the life insurance policy;

(v) Net cash surrender value of the life insurance policy as of the end of the current report period; and

(vi) Amount of outstanding loans, if any, as of the end of the current report period.

(10) “Registered contract” means a variable annuity contract or variable life insurance policy subject to the prospectus delivery requirements of Title 15, Chapter 2A, Subchapter I of the United States Code (Securities Act of 1933).

(11) “Replacement” means a transaction in which a new life insurance policy or annuity contract is to be purchased, and it is known or should be known to the proposing insurance producer, or to the proposing insurer if there is no insurance producer, that by reason of the transaction, an existing life insurance policy or existing annuity contract has been or is to be:

(a) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;

(b) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other life insurance policy or annuity contract values;

(c) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) Reissued with any reduction in cash value; or

(e) Used in a financed purchase.

(12) “Replacing insurer” means an insurer that issues or proposes to issue a new life insurance policy or annuity contract:

(a) To replace an existing life insurance policy or existing annuity contract; or

(b) Through a financed purchase.

(13) “Sales material” means a sales illustration or any other written, printed, or electronically presented information that is:

(a) Created, completed, or provided by the insurer or insurance producer; and

(b) Used in the presentation to the owner of a life insurance policy or annuity contract related to the life insurance policy or annuity contract purchased.

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.04 Duties of Insurance Producer.

A. Signed Statement. An insurance producer who initiates an application for a life insurance policy or annuity contract shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the insurance producer as to whether the applicant has any existing life insurance policy or existing annuity contract.

B. Applicant Without Existing Life Insurance Policy or Existing Annuity Contract. If the applicant does not have an existing life insurance policy or existing annuity contract, the insurance producer's duties with respect to replacement are complete upon the fulfillment of the requirement in §A of this regulation.

C. Applicant With Existing Life Insurance Policy or Existing Annuity Contract.

(1) If the applicant has an existing life insurance policy or existing annuity contract, the insurance producer shall present and, unless declined, read to the applicant, not later than at the time of taking the application, a notice regarding replacement in the form contained in Regulation .10 of this chapter or other substantially similar notice approved by the Commissioner.

(2) Notwithstanding §C(1) of this regulation, approval is not required if amendments to the notice are limited to the omission of references not applicable to the product being sold or replaced.

(3) The notice shall be signed by both the applicant and the insurance producer attesting that the notice has been:

(a) Read aloud by the insurance producer or that the applicant did not wish the notice to be read aloud; and

(b) Left with the applicant.

D. Contents of Notice.

(1) The notice shall include a:

(a) List of each life insurance policy or annuity contract proposed to be replaced, properly identified by name of insurer, the insured or annuitant, and life insurance policy or annuity contract number if available; and

(b) Statement as to whether each life insurance policy or annuity contract will be replaced or whether a life insurance policy will be used as a source of financing for the new life insurance policy or annuity contract.

(2) If a life insurance policy or annuity contract number has not been issued by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.

E. Sales Material.

(1) In connection with a replacement transaction, the insurance producer shall leave the original or a copy of all sales material with the applicant at the time an application for a new life insurance policy or annuity contract is completed.

(2) With respect to electronically presented sales material, the insurance producer shall provide to the owner of a life insurance policy or annuity contract the original or a copy of all sales material in printed form not later than the time of delivery of the life insurance policy or annuity contract.

F. Provision of Information to the Insurer. Except as provided in Regulation .06D of this chapter, in connection with a replacement transaction, the insurance producer shall submit to the insurer to which an application for a life insurance policy or annuity contract is presented:

(1) A copy of each document required by this regulation;

(2) A statement identifying any preprinted or electronically presented insurer-approved sales materials used; and

(3) Copies of individualized sales materials, including illustrations related to the specific life insurance policy or annuity contract purchased.

Cross References

31.09.05.05D(1)

31.09.05.05E

31.09.05.06A(4)

31.09.05.06D

31.09.05.06D(1)(b)

31.09.05.06D(2)(a)

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.05 Duties of Insurers that Use Insurance Producers.

A. System of Supervision and Control.

(1) An insurer shall maintain a system of supervision and control to ensure compliance with the requirements of this chapter that includes, at a minimum, procedures to:

(a) Inform its insurance producers of the requirements of this regulation and incorporate the requirements of this regulation into all relevant insurance-producer training manuals prepared by the insurer;

(b) Provide to each insurance producer a written statement of the insurer's position with respect to the acceptability of replacements that provides guidance to its insurance producer as to the appropriateness of these transactions;

(c) Review the appropriateness of each replacement transaction that the insurance producer does not indicate is in accord with §A(1)(b) of this regulation;

(d) Confirm that the requirements of this regulation have been met; and

(e) Detect transactions that are replacements of existing life insurance policies or existing annuity contracts by the existing insurer, but that have not been reported as replacements by the applicant or insurance producer.

(2) Compliance with this section may include systematic customer surveys, interviews, confirmation letters, and programs of internal monitoring.

B. Capacity to Monitor Replacements.

(1) An insurer shall:

(a) Have the capacity to monitor each insurance producer's life insurance policy and annuity contract replacements for that insurer; and

(b) On request, make all records regarding replacements available for inspection by the Commissioner.

(2) The capacity to monitor shall include the ability to produce records for each insurance producer's:

(a) Life insurance replacements, including financed purchases, as a percentage of the insurance producer's total annual sales for life insurance;

(b) Number of lapses of life insurance policies as a percentage of the insurance producer's total annual sales for life insurance;

(d) Number of transactions that are unreported replacements of existing life insurance policies or existing annuity contracts by the existing insurer detected by the insurer's monitoring system as required by §A(1)(e) of this regulation; and

(e) Replacements, indexed by replacing insurance producer and existing insurer.

C. Signed Statement and Notice. An insurer shall require with or as a part of each application for life insurance or an annuity:

(1) A statement signed by the applicant and insurance producer indicating whether the applicant has an existing life insurance policy or existing annuity contract; and

(2) If the applicant has an existing life insurance policy or existing annuity contract, a completed notice regarding replacements as contained in Regulation .10 of this chapter.

D. Production of Information. If an applicant has an existing life insurance policy or existing annuity contract, an insurer shall be able to produce copies of the following items for at least 5 years after the termination or expiration of the proposed life insurance policy or annuity contract:

(1) The sales material required by Regulation .04F of this chapter;

(2) The basic illustration and any supplemental illustrations related to the specific life insurance policy or annuity contract that is purchased; and

(3) The insurance producer's and applicant's signed statements with respect to financing and replacement.

E. Sales Material and Illustrations. An insurer shall ascertain and ensure that the sales material and illustrations required by Regulation .04F of this chapter:

(1) Meet the requirements of this regulation; and

(2) Are complete and accurate for the proposed life insurance policy or annuity contract.

F. Application That Does Not Meet Requirements. If an application does not meet the requirements of this regulation, an insurer shall:

(1) Notify the insurance producer and applicant; and

(2) Fulfill the outstanding requirements.

G. Record Keeping. An insurer shall maintain records in paper, photograph, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document.

Cross References

31.09.05.09B(2)

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.06 Duties of Replacing Insurers that Use Insurance Producers.

A. In General. If a replacement is involved in a transaction, the replacing insurer shall:

(1) Verify that the required forms are received and are in compliance with this chapter;

(2) Notify any other existing insurer that may be affected by the proposed replacement within 5 business days after:

(a) Receipt of a completed application indicating replacement at the home office of the replacing insurer; or

(b) A replacement is identified, if not indicated on the application;

(3) Mail to an existing insurer a copy of the available illustration or life insurance policy summary for the proposed life insurance policy or available disclosure document for the proposed annuity contract within 5 business days after a request from the existing insurer;

(4) Be able to produce copies of the notification regarding replacement required by Regulation .04C of this chapter, indexed by insurance producer, for at least 5 years or until the next regular market conduct examination by the insurance department of an insurer's state of domicile, whichever is later; and

(5) Provide to the owner of the life insurance policy or annuity contract notice of the right to return the life insurance policy or annuity contract within 30 days after the delivery of the life insurance policy or annuity contract and receive:

(a) An unconditional full refund of all premiums or considerations paid on the life insurance policy or annuity contract, including any life insurance policy fees or charges; or

(b) In the case of a variable life insurance policy or variable annuity contract, a payment of:

(i) The cash surrender value provided under the variable life insurance policy or variable annuity contract; and

(ii) The fees and other charges deducted from the gross premiums or considerations or imposed under the variable life insurance policy or variable annuity contract, including surrender charges.

B. Registered Contract. With respect to a registered contract, an insurer need not comply with §A(3) of this regulation if the insurer provides to the existing insurer, within 5 business days after a request from the existing insurer:

(1) Premium or annuity contract contribution amounts; and

(2) Identification of the appropriate prospectus or offering circular.

C. Replacing Insurer and Existing Insurer Are the Same. If the replacing insurer and the existing insurer in a transaction are the same, or subsidiaries or affiliates under common ownership or control, the replacing insurer:

(1) Shall allow credit for the period of time that has elapsed under the incontestability and suicide period of the replaced life insurance policy or annuity contract up to the face amount of the existing life insurance policy or existing annuity contract; and

(2) With regard to financed purchases, may limit the credit to the amount that the face amount of the existing life insurance policy is reduced by the use of existing life insurance policy values to fund the new life insurance policy or annuity contract.

D. Insurer that Requires Use of Approved Sales Material. If an insurer prohibits the use of sales material other than materials approved by the insurer, as an alternative to the requirements made of an insurer under Regulation .04F of this chapter, the insurer may:

(1) Require with each application a statement signed by the insurance producer that:

(a) The insurance producer used only insurer-approved sales material; and

(b) Copies of all sales material were left with the applicant in accordance with Regulation .04E of this chapter;

(2) Within 10 days after the issuance of the life insurance policy or annuity contract:

(a) Notify the applicant by written or by verbal communication by a person whose duties are separate from the marketing area of the insurer, that the insurance producer has stated that copies of all sales material have been left with the applicant in accordance with Regulation .04E of this chapter;

(b) Provide the applicant with a toll-free telephone number to contact insurer personnel involved in the compliance function if copies of all sales material have not been left with the applicant; and

(3) Be able to produce a copy of the letter or other verification in the life insurance policy or annuity contract file for at least 5 years after the termination or expiration of the life insurance policy or annuity contract.

Cross References

31.09.05.04F

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.07 Duties of Existing Insurer.

A. In General. For replacement transactions, the existing insurer shall:

(1) Retain and be able to produce all replacement notifications received, indexed by replacing insurer, for at least 5 years or until the conclusion of the next regular market conduct examination conducted by the insurance department of the insurer's state of domicile, whichever is later; and

(2) Within 5 business days after receipt of a request from an owner of a life insurance policy or annuity contract, send a letter to the owner of the life insurance policy or annuity contract of the right to receive information regarding the existing life insurance policy or annuity contract values including, if available, an in-force illustration, or life insurance policy summary if an in-force illustration cannot be produced within 5 business days after receipt of a notice that an existing life insurance policy or annuity contract is being replaced.

B. Registered Contract. With respect to a registered contract, an insurer need not comply with §A(2) of this regulation if the insurer provides to the owner of the life insurance policy or annuity contract, within 5 business days after receipt of a request from the owner:

(1) Premium or annuity contract contribution amounts; and

(2) Identification of the appropriate prospectus or offering circular.

C. Request to Borrow, Surrender, or Withdraw Life Insurance Policy Values.

(1) Upon receipt of a request to borrow, surrender, or withdraw life insurance policy values, an existing insurer shall send a notice, within 14 business days after receipt of the request, advising the owner of the life insurance policy that the release of life insurance policy values may affect the guaranteed elements, nonguaranteed elements, face amount, or surrender value of the life insurance policy from which the values are released.

(2) The existing insurer shall send the notice separate from the check if the check is sent to anyone other than the owner of the life insurance policy.

(3) In the case of consecutive automatic premium loans, the existing insurer is required to send the notice only at the time of the first loan.

Cross References

31.09.09.05B

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.08 Duties of Insurers with Respect to Direct Response Solicitations.

A. Inquiry Regarding Intent. For an application initiated as a result of a direct response solicitation, the insurer shall require, with or as part of each completed application for a life insurance policy or annuity contract, a statement asking whether the applicant, by applying for the proposed life insurance policy or annuity contract, intends to replace, discontinue, or change an existing life insurance policy or existing annuity contract.

B. Duties of Insurer if Replacement or Change Is Not Intended. If the applicant indicates a replacement or change is not intended or if the applicant fails to respond to the statement, the insurer shall send the applicant, with the life insurance policy or annuity contract, the notice regarding replacement in Regulation .11 of this chapter, or other substantially similar notice approved by the Commissioner.

C. Duties of Insurer if Insurer Proposes Replacement or if Replacement Intended.

(1) If an insurer has proposed a replacement or if the applicant indicates a replacement is intended, and the insurer continues with the replacement, the insurer shall:

(a) Provide an applicant or prospective applicant with the life insurance policy or annuity contract a notice, as described in Regulation .12 of this chapter, or other substantially similar notice approved by the Commissioner; and

(b) Comply with the requirements of Regulation .06A(2) and (3) of this chapter, if the applicant furnishes the names of the existing insurers, and the requirements of Regulation .06A(4) and (5) and C of this chapter.

(2) If an insurer is required to provide a notice pursuant to §C(1)(a) of this regulation, the insurer may delete the references to the insurance producer, including the insurance producer's signature, and references not applicable to the product being sold or replaced, without having to obtain approval of the form from the Commissioner.

(3) The insurer's obligation to obtain the applicant's signature shall be satisfied if the insurer can demonstrate that it has made a diligent effort to secure a signed copy of the notice required by §C(1)(a) of this regulation.

(4) The requirement to make a diligent effort shall be satisfied if the insurer includes in the mailing a self-addressed postage-prepaid envelope with instructions for the return of the signed notice required by §C(1)(a) of this regulation.

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.09 Violations and Penalties.

A. Prohibition on Twisting. A failure to comply with this chapter is a violation of Insurance Article, §27-213, Annotated Code of Maryland, including:

(1) Deceptive or misleading information set forth in sales material;

(2) Failing to ask the applicant, in completing the application, the pertinent questions regarding the possibility of financing or replacement;

(3) Intentional incorrect recording of an answer;

(4) Advising an applicant to respond negatively to any question regarding replacement in order to prevent notice to the existing insurer; or

(5) Advising the owner of a life insurance policy or annuity contract to write directly to the insurer in such a way as to attempt to obscure the identity of the replacing insurance producer or insurer.

B. Intent to Finance New Policy With Existing Policy Value—Individual Transaction—Prima Facie Case.

(1) For purposes of a regulatory review of an individual transaction only, it is deemed prima facie evidence of a policyholder's intent to finance the purchase of a new life insurance policy with existing life insurance policy values if a withdrawal, surrender, or borrowing involving the life insurance policy values of an existing life insurance policy is used to pay premiums:

(a) On a new life insurance policy owned by the same policyholder and issued by the same insurer; and

(b) Within 4 months before or 13 months after the effective date of the new life insurance policy.

(2) The prima facie standard established by §B(1) of this regulation is not intended to increase or decrease the monitoring obligations of an insurer under Regulation .05A(1)(e) of this chapter.

C. Replacement After Indication That Replacement Not Intended—Pattern of Action—Prima Facie Case.

(1) The owner of a life insurance policy or annuity contract may replace an existing life insurance policy or existing annuity contract after indicating in, or as a part of, an application for new coverage that replacement is not the intention of the owner.

(2) Notwithstanding §C(1) of this regulation, if owners of life insurance policies or annuity contracts of the same insurance producer have a pattern of replacing life insurance policies or annuity contracts after indicating on the application that replacement is not their intention, the pattern of action is prima facie evidence of the insurance producer's:

(a) Knowledge that replacement was intended in connection with the identified transactions; and

(b) Intent to violate this chapter.

D. Provision of Information. If it is determined that the requirements of this regulation have not been met, the replacing insurer shall provide to the owner of the life insurance policy or annuity contract:

(1) An in-force illustration, if available, or life insurance policy summary for the replacement life insurance policy or available disclosure document for the replacement annuity contract; and

(2) The appropriate notice regarding replacements in Regulation .10 or .12 of this chapter.

E. Penalties.

(1) An insurance producer who violates this chapter is subject to:

(a) A penalty under Insurance Article, §10-126, Annotated Code of Maryland; and

(b) Forfeiture of commissions or compensation paid to the insurance producer as a result of a transaction in connection with which a violation occurred.

(2) An insurer that violates this chapter is subject to a penalty under Insurance Article, §4-113, Annotated Code of Maryland.

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.10 Replacement Form A.

REPLACEMENT OF LIFE INSURANCE OR ANNUITIES

This document shall be signed by the applicant and the insurance producer, if there is one, and a copy left with the applicant.

You are contemplating the purchase of a life insurance policy or annuity contract. In some cases this purchase may involve discontinuing or changing an existing life insurance policy or annuity contract. If so, a replacement is occurring. Financed purchases are also considered replacements.

A replacement occurs when a new life insurance policy or annuity contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing life insurance policy or annuity contract, or an existing life insurance policy or annuity contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase.

A financed purchase occurs when the purchase of a new life insurance policy involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the life insurance policy values, including accumulated dividends, of an existing life insurance policy to pay all or part of any premium or payment due on the new life insurance policy. A financed purchase is a replacement.

You should carefully consider whether a replacement is in your best interest. You will pay acquisition costs and there may be surrender costs deducted from your life insurance policy or annuity contract. You may be able to make changes to your existing life insurance policy or annuity contract to meet your insurance needs at less cost. A financed purchase will reduce the value of your existing life insurance policy and may reduce the amount paid upon the death of the insured.

We want you to understand the effects of replacements before you make your purchase decision and ask that you answer the following questions and consider the questions on the back of this form.

Are you considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating your existing life insurance policy or annuity contract?

_____YES _____NO

Are you considering using funds from your existing policies or annuity contracts to pay premiums due on the new life insurance policy or annuity contract?

_____YES _____NO

If you answered “yes” to either of the above questions, list each existing life insurance policy or annuity contract you are contemplating replacing (include the name of the insurer, the insured or annuitant, and the life insurance policy or annuity contract number if available) and whether each life insurance policy or annuity contract will be replaced or used as a source of financing:

| INSURER NAME | ANNUITY CONTRACT OR LIFE INSURANCE POLICY # | INSURED ANNUITANT | REPLACED (R) OR FINANCING (F) | | --- | --- | --- | --- | | 1. ______________________________________________________________________ | | | | | 2. ______________________________________________________________________ | | | | | 3._______________________________________________________________________ | | | |

Make sure you know the facts. Contact your existing company or its agent for information about the old life insurance policy or annuity contract. If you request one, an in-force illustration, life insurance policy summary, or available disclosure document must be sent to you by the existing insurer. Ask for and keep all sales material used by the insurance producer in the sales presentation. Be sure you make an informed decision.

The existing life insurance policy or annuity contract is being replaced because:

I certify that the responses herein are, to the best of my knowledge, accurate.

Applicant's Printed Name

Applicant's Signature

_________________Date

Insurance Producer's Printed Name

Insurance Producer's Signature

_________________Date

I do not want this notice read aloud to me. (Applicants must initial only if they do not want the notice read aloud.)

A replacement may not be in your best interest, or your decision could be a good one. You should make a careful comparison of the costs and benefits of your existing life insurance policy or annuity contract and the proposed life insurance policy or annuity contract. One way to do this is to ask the company or insurance producer that sold you your existing life insurance policy or annuity contract to provide you with information concerning your existing life insurance policy or annuity contract. This may include an illustration of how your existing life insurance policy or annuity contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare life insurance policies or annuity contracts. You should discuss the following with your insurance producer to determine whether replacement or financing your purchase makes sense:

PREMIUMS: Are they affordable?

Could they change?

You are older—are premiums higher for the proposed new life insurance policy?

How long will you have to pay premiums on the new life insurance policy? On the old life insurance policy?

LIFE INSURANCE POLICY VALUES: New policies usually take longer to build cash values and to pay dividends.

Acquisition costs for the old life insurance policy may have been paid, and you will incur costs for the new one.

What surrender charges do the policies have?

What expense and sales charges will you pay on the new life insurance policy?

Does the new life insurance policy provide more insurance coverage?

INSURABILITY: If your health has changed since you bought your old life insurance policy, the new one could cost you more, or you could be turned down.

You may need a medical exam for a new life insurance policy.

Claims on most new policies for up to the first 2 years can be denied based on inaccurate statements.

Suicide limitations may begin anew on the new coverage.

IF YOU ARE KEEPING THE OLD LIFE INSURANCE POLICY AS WELL AS THE NEW LIFE INSURANCE POLICY:

How are premiums for both policies being paid?

How will the premiums on your existing life insurance policy be affected?

Will a loan be deducted from death benefits?

What values from the old life insurance policy are being used to pay premiums?

IF YOU ARE SURRENDERING AN ANNUITY OR LIFE PRODUCT:

Will you pay surrender charges on your old annuity contract?

What are the interest rate guarantees for the new annuity contract?

Have you compared the annuity contract charges or other life insurance policy expenses?

OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS:

What are the tax consequences of buying the new life insurance policy?

Is this a tax-free exchange? (See your tax advisor.)

Is there a benefit from favorable “grandfathered” treatment of the old life insurance policy under the Internal Revenue Code?

Will the existing insurer be willing to modify the old life insurance policy?

How does the quality and financial stability of the new company compare with your existing company?

Cross References

31.09.05.04C(1)

31.09.05.05C(2)

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.11 Replacement Form B.

REPLACING YOUR LIFE INSURANCE POLICY OR ANNUITY?

Are you thinking about buying a new life insurance policy or annuity and discontinuing or changing an existing one? If you are, your decision could be a good one—or a mistake. You will not know for sure unless you make a careful comparison of your existing benefits and the proposed life insurance policy or annuity contract's benefits.

Make sure you understand the facts. You should ask the company or insurance producer that sold you your existing life insurance policy or annuity contract to give you information about it.

Hear both sides before you decide. This way you can be sure you are making a decision that is in your best interest.

Cross References

31.09.05.08B

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

COMAR 31.09.05.12 Replacement Form C.

IMPORTANT NOTICE:

REPLACEMENT OF LIFE INSURANCE OR ANNUITIES

A replacement occurs if a new life insurance policy or annuity contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing life insurance policy or annuity contract, or an existing life insurance policy or annuity contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase.

A financed purchase occurs if the purchase of a new life insurance policy involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the life insurance policy values, including accumulated dividends, of an existing life insurance policy, to pay all or part of a premium or payment due on the new life insurance policy. A financed purchase is a replacement.

We want you to understand the effects of replacements and ask that you answer the following questions and consider the questions on the back of this form.

Are you considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating your existing life insurance policy or annuity contract?

_____YES _____NO

Are you considering using funds from your existing policies or annuity contracts to pay premiums due on the new life insurance policy or annuity contract?

_____YES _____NO

Please list each existing life insurance policy or annuity contract you are contemplating replacing (include the name of the insurer, the insured, and the life insurance policy or annuity contract number if available) and whether each life insurance policy or annuity contract will be replaced or used as a source of financing:

Make sure you know the facts. Contact your existing company or its insurance producer for information about the old life insurance policy or annuity contract. If you request one, an in-force illustration, life insurance policy summary, or available disclosure document must be sent to you by the existing insurer. Ask for and keep all sales material used by the insurance producer in the sales presentation. Be sure that you make an informed decision.

I certify that the responses herein are, to the best of my knowledge, accurate.

Applicant's Printed Name

Applicant's Signature

_________________Date

A replacement may not be in your best interest, or your decision could be a good one. You should make a careful comparison of the costs and benefits of your existing life insurance policy or annuity contract and the proposed life insurance policy or annuity contract. One way to do this is to ask the company or insurance producer that sold you your existing life insurance policy or annuity contract to provide you with information concerning your existing life insurance policy or annuity contract. This may include an illustration of how your existing life insurance policy or annuity contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare policies or annuity contracts. You should discuss the following with your agent to determine whether replacement or financing your purchase makes sense:

PREMIUMS: Are they affordable?

Could they change?

You are older—are premiums higher for the proposed new life insurance policy?

How long will you have to pay premiums on the new life insurance policy? On the old life insurance policy?

LIFE INSURANCE POLICY VALUES: New policies usually take longer to build cash values and to pay dividends.

Acquisition costs for the old life insurance policy may have been paid, and you will incur costs for the new one.

What surrender charges do the policies have?

What expense and sales charges will you pay on the new life insurance policy?

Does the new life insurance policy provide more insurance coverage?

INSURABILITY: If your health has changed since you bought your old life insurance policy, the new one could cost you more, or you could be turned down.

You may need a medical exam for a new life insurance policy.

Claims on most new policies for up to the first 2 years can be denied based on inaccurate statements.

Suicide limitations may begin anew on the new coverage.

IF YOU ARE KEEPING THE OLD LIFE INSURANCE POLICY AS WELL AS THE NEW LIFE INSURANCE POLICY:

How are premiums for both policies being paid?

How will the premiums on your existing life insurance policy be affected?

Will a loan be deducted from death benefits?

What values from the old life insurance policy are being used to pay premiums?

IF YOU ARE SURRENDERING AN ANNUITY OR LIFE PRODUCT:

Will you pay surrender charges on your old annuity contract?

What are the interest rate guarantees for the new annuity contract?

Have you compared the annuity contract charges or other life insurance policy expenses?

OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS:

What are the tax consequences of buying the new life insurance policy?

Is this a tax-free exchange? (See your tax advisor.)

Is there a benefit from favorable “grandfathered” treatment of the old life insurance policy under the Internal Revenue Code?

Will the existing insurer be willing to modify the old life insurance policy?

How does the quality and financial stability of the new company compare with your existing company?

Cross References

31.09.05.08C(1)(a)

History

Administrative History: Effective date: May 1, 1962
Administrative History: Amended effective August 1, 1967; March 1, 1968; May 1, 1968
Administrative History: Chapter revised effective January 1, 1980 (6:15 Md. R. 1278)
Administrative History: Chapter revised effective April 1, 1985 (12:3 Md. R. 244)
Administrative History: Chapter recodified from COMAR 09.30.31 to COMAR 31.09.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Regulations .01—.12 repealed and new Regulations .01—.12 adopted effective January 1, 2002 (28:15 Md. R. 1401)
Administrative History: Regulation .02B amended effective March 10, 2008 (35:5 Md. R. 642)
Administrative History: Regulation .03B amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .06A amended effective October 14, 2002 (29:20 Md. R. 1594); October 8, 2018 (45:20 Md. R. 921)
Administrative History: Regulation .07C amended effective October 14, 2002 (29:20 Md. R. 1594)
Administrative History: Regulation .09B amended effective October 14, 2002 (29:20 Md. R. 1594)
Authority: Insurance Article, §§2-109 and 27-213, Annotated Code of Maryland

31.09.06 Notice of Nonforfeiture Provisions in Lapsed Life Policies

COMAR 31.09.06.01 Notice Requirement.

For any industrial or ordinary policy of insurance on the life of a resident of this State issued by any life insurance company or fraternal benefit society operating in Maryland, when the policy has a cash, paid-up, or extended insurance or other equity at the time of lapse and when none of these equities is automatically granted by the policy without application by the insured, upon lapse of the policy, written notice shall be mailed to the last known address of the insured within not less than 30 days before the expiry of the period within which the insured may apply for the equity value. This notice shall state the nature of the equity to which the insured is entitled and the date before which application for the equity is required to be made.

History

Administrative History: Effective date: February 27, 1941
Administrative History: Amended effective May 1, 1968
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.50 to COMAR 31.09.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective October 24, 2016 (43:21 Md. R. 1169)
Authority: Insurance Article, §2-109 and Title 16, Subtitle 3, Annotated Code of Maryland

31.09.07 Charitable Gift Annuities

COMAR 31.09.07.01 Applicability.

A. This chapter is applicable to annuity agreements issued to donors who are Maryland residents, under a special permit in accordance with Insurance Article, §16-114, Annotated Code of Maryland.

B. This chapter is applicable to any charitable gift annuity issued to a Maryland resident after the effective date of these regulations.

C. This chapter is applicable to organizations in or outside Maryland if the organization solicits annuity agreements in Maryland.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Commissioner” means the Insurance Commissioner of Maryland.

(2) “Organization” means every educational or religious organization, hospital, or community foundation authorized to issue annuities under a permit issued in accordance with Insurance Article, §16-114(b), Annotated Code of Maryland.

(3) “Qualified actuary” means an individual who is a member in good standing of the American Academy of Actuaries and is qualified to sign statements of actuarial opinion in accordance with the American Academy of Actuaries’ standards.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.03 Required Reserves.

A. The organization shall maintain assets at least equal to the sum of the reserves on its outstanding annuity agreements.

B. The reserves on the outstanding annuity agreements shall be consistent with the assumptions underlying the rates adopted by the American Council on Gift Annuities which are in effect at the time of issuance of the gift annuity.

C. In determining the appropriate reserves, a deduction shall be made for all or any portion of an annuity risk which is reinsured by an authorized insurer or accredited reinsurer.

D. As part of the organization’s annual audit report, the organization shall submit a statement by a certified public accountant or qualified actuary verifying the existence of adequate reserves among the organization’s assets.

E. The statement required under §D of this regulation may be incorporated into a certified public accountant's annual audit report.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.04 Investment Requirements.

A. The reserve assets shall be segregated.

B. The segregated reserve assets shall be invested in the same manner and subject to the same standards as are applicable under Estates and Trust Article, §15-402, Annotated Code of Maryland.

C. The general assets of the organization shall be liable for annuity agreements to the extent that the segregated fund is inadequate.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.05 Disclosure Requirements.

A. Before accepting consideration for an annuity agreement the organization shall obtain separate signed statements from a prospective donor acknowledging that the prospective donor has been informed that:

(1) Payments made under charitable gift annuities are backed solely by the full faith and credit of the organization; and

(2) Payments made under charitable gift annuities are not insured or otherwise guaranteed by any government entity.

B. The requirement under §A of this regulation may be satisfied by having the acknowledgement be part of the annuity agreement which is signed by the donor.

C. The organization shall retain the annuity agreement or, if applicable, the separate signed statement for so long as the obligation to pay annuity benefits continues.

Cross References

31.09.07.06G

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.06 Filing Requirements for Special Permits.

The following material shall be submitted by an organization applying for a special permit to issue charitable gift annuities:

A. Proof of exemption under §501 of the Internal Revenue Code;

B. Description of the organization's activities and number of years of active operation in this State;

C. Copy of the most recent independently audited financial statement;

D. Payout rates proposed to be provided under the charitable immediate and deferred gift annuity agreements;

E. Description of the proposed investment of contributed funds;

F. Copy of the organization's bylaws;

G. Copy of the statement required by Regulation .05A of this chapter;

H. Copy of the organization's forms used as charitable gift annuity contracts;

I. Copies of any solicitation material or descriptive literature proposed to be used with charitable gift annuities; and

J. Other material requested by the Commissioner in order to determine that the applicant is an organization which is eligible for the special permit in accordance with Insurance Article, §16-114(b), Annotated Code of Maryland.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

COMAR 31.09.07.07 Withdrawal of Permit.

The permit issued to an organization may be withdrawn by the Commissioner upon a finding that the organization failed to comply with the standards established by this chapter after an appropriate notice to and opportunity for the organization to conform to the standards set forth.

History

Administrative History: Effective date: August 14, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.03 to COMAR 31.09.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .03C amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03D amended effective April 6, 2020 (47:7 Md. R. 385)
Administrative History: Regulation .04B amended effective December 19, 2016 (43:25 Md. R. 1386)
Authority: Insurance Article, §§2-109 and 16-114, Annotated Code of Maryland

31.09.08 Group Annuity Contracts

COMAR 31.09.08.01 Purpose.

The purpose of this chapter is to regulate the issuance of group annuity contracts with the objective of providing that they not be issued on an impracticable basis or in a manner which may be hazardous to policyholders and the public.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.02 Scope.

This chapter is applicable to all group annuity contracts whether issued on a fixed or a variable basis or on any basis providing a combination of both fixed and variable benefits.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.03 Exceptions.

A. These regulations do not apply to:

(1) An annuity contract issued on an individual basis providing annuity benefits to individual or joint owners and providing further annuity benefits to one or more other individuals on the death of the original annuitant or joint annuitants;

(2) An annuity contract issued on an individual basis to provide annuity benefits to one or more persons on the death of a named individual;

(3) Annuity benefits provided as settlement options under individual life insurance policies; or

(4) Annuity benefits provided as settlement options under group policies of whole life insurance.

B. These regulations are not applicable to annuity agreements with donors issued under a special permit in accordance with Insurance Article, §16-114, Annotated Code of Maryland.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.04 Definition.

“Group annuity” means a contract:

A. Purporting to provide annuity benefits to more than one individual;

B. Issued to:

(1) An employer or two or more employers in the same industry;

(2) An association of employers which has been in existence for at least 5 years, unless the Commissioner expressly waives the 5-year requirement;

(3) A labor union;

(4) An association of labor unions;

(5) An association composed of one or more labor unions and one or more employers;

(6) An association of persons having a common calling, occupation, or profession, which association was organized and maintained in good faith for purposes other than obtaining annuities and which has been in existence for at least 5 years, unless the Commissioner expressly waives the 5-year requirement;

(7) One or more departments of the federal government or of a state government or their subdivisions;

(8) An association of persons employed in one or more departments of the federal government or of a state government or their subdivisions which association was organized and maintained in good faith for purposes other than obtaining annuities and which has been in existence for at least 5 years, unless the Commissioner expressly waives the 5-year requirement;

(9) A college or university;

(10) An association of persons employed in a college or university, which association was organized and maintained in good faith for purposes other than obtaining annuities and which has been in existence for at least 5 years, unless the Commissioner expressly waives the 5-year requirement;

(11) An association of alumni of a college or university, which association was organized and maintained in good faith for purposes other than obtaining annuities and which has been in existence for at least 5 years, unless the Commissioner expressly waives the 5-year requirement; or

(12) The trustees of a:

(a) Fund established by an entity referred to in §B(1)—(11) of this regulation; or

(b) Trust which permits individuals for whom contributions are made to individual retirement annuities or similar programs for which favorable federal income tax treatment exists under §403b or 408b of the Internal Revenue Code of 1954; and

C. Issued for the purpose of providing annuity benefits to:

(1) If the plan is noncontributory:

(a) Employees of the employer or employers,

(b) Members of the labor union or association, or

(2) If the plan is contributory, the employees or members who agree to contribute to the cost of the annuity; or

(3) Individuals under a trust described in §B(12)(b) of this regulation.

Cross References

31.09.08.05F

31.09.08.06D

31.09.08.07A

31.09.08.07B

31.09.08.07C

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.05 Employees.

In addition to those persons traditionally considered to be employees, employees may include:

A. If the employer is an individual proprietor or partnership, the proprietor or the partner;

B. If the employer is a corporation, the directors of the corporation;

C. If the business of the employer and any affiliated corporations, proprietorships, or partnerships is under common control, the employees of one or more affiliated corporations, proprietorships, or partnerships;

D. Independent contractors under contract to the employer and employees of the independent contractor;

E. Retired and terminated employees; and

F. Employees of a trustee under a trust referred to in Regulation .04B(12) of this chapter if their principal duties are connected with the trusteeship.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.06 Members.

Members may, but need not, include:

A. Employees of a union or association;

B. Members of a union or association who have retired;

C. Employees of the members of an eligible association; or

D. Employees of a trustee under a trust referred to in Regulation .04B(12) of this chapter if their principal duties are connected with the trusteeship.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

COMAR 31.09.08.07 Eligible Groups.

A. An insurer may not deliver in this State a contract purporting to provide annuity benefits to more than one individual unless the contract conforms to the definition of a group annuity contract contained in Regulation .04 of this chapter.

B. If a contract providing annuity benefits to more than one individual is delivered in this State before the effective date of these regulations, an insurer may not include additional annuitants under the contract if the contract does not conform to the definition of a group annuity contract contained in Regulation .04 of this chapter.

C. Except as provided under §D of this regulation, an insurer may not include any resident of Maryland under any contract delivered in another jurisdiction which purports to provide annuity benefits to more than one individual if the contract does not conform to the definition of a group annuity contract contained in Regulation .04 of this chapter.

D. An insurer may include a resident of Maryland under a contract delivered in another jurisdiction which purports to provide annuity benefits to more than one individual if both of the following requirements are satisfied:

(1) A finding by the Commissioner that the type of group to be covered is the subject of an approval from the Commissioner for the solicitation of policies issued in another jurisdiction under Insurance Article, §15-310, Annotated Code of Maryland, in the case of group health insurance, or Insurance Article, §17-101(c), Annotated Code of Maryland, in the case of group life insurance; and

(2) The group annuity contract contains a nonforfeiture provision or provisions which in the opinion of the Commissioner is equitable to the annuitants.

History

Administrative History: Effective date: February 23, 1987 (14:4 Md. R. 417)
Administrative History: Regulation .07C amended and D adopted effective January 29, 1996 (23:2 Md. R. 95)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.71 to COMAR 31.09.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§1-101(d), 2-109, 12-203, 12-205, 12-209, 16-114, and 16-501, Annotated Code of Maryland

31.09.09 Life Insurance Illustrations

COMAR 31.09.09.01 Purpose.

The purpose of this chapter is to provide rules for life insurance policy illustrations that will protect consumers and foster consumer education. The chapter provides illustration formats, prescribes standards to be followed when illustrations are used, and specifies the disclosures that are required in connection with illustrations. The goals of this chapter are to ensure that illustrations do not mislead purchasers of life insurance and to make illustrations more understandable. Insurers will, as far as possible, eliminate the use of footnotes and caveats and define terms used in the illustration in language that can be understood by a typical person within the segment of the public to which the illustration is directed.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.02 Applicability and Scope.

This chapter applies to all group and individual life insurance policies and certificates except:

A. Variable life insurance;

B. Individual and group annuity contracts;

C. Credit life insurance; or

D. Life insurance policies with no illustrated death benefits on any individual exceeding $10,000.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Actuarial Standards Board” means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.

(2) “Basic illustration” means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.

(3) “Contract premium” means the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration.

(4) “Currently payable scale” means a scale on nonguaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next 95 days.

(5) Disciplined Current Scale.

(a) “Disciplined current scale” means a scale on nonguaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer.

(b) “Disciplined current scale” includes further guidance contained in standards established by the Actuarial Standards Board which may be relied upon if the standards:

(i) Are consistent with all provisions of this chapter;

(ii) Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred;

(iii) Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and

(iv) Do not permit assumed expenses to be less than minimum assumed expenses.

(6) “Generic name” means a short title descriptive of the policy being illustrated such as whole life, term life, or flexible premium adjustable life.

(7) “Guaranteed elements” means the premiums, benefits, values, credits, or charges under a policy of life insurance that are guaranteed and determined at issue.

(8) “Illustrated scale” means a scale on nonguaranteed elements, as defined in §B(14) of this regulation, currently being illustrated that is not more favorable to the policy owner than the lesser of the:

(a) Disciplined current scale; or

(b) Currently payable scale.

(9) “Illustration” means a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years and that is one of the following three types:

(a) Basic illustration;

(b) Supplemental illustration; or

(10) “Illustration actuary” means an actuary meeting the requirements of Regulation .11 of this chapter who certifies to illustrations based on the standard of practice promulgated by the Actuarial Standards Board.

(11) “In force illustration” means an illustration furnished at any time after the policy that it depicts has been in force for 1 year or more.

(12) “Lapse-supported illustration” means an illustration of a policy form failing the test of self-supporting as defined in §B(18) of this regulation under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first 5 years and 100 percent policy persistent after that.

(13) “Minimum assumed expenses” means the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form.

(14) “Nonguaranteed elements” means the premiums, benefits, values, credits, or charges under a policy of life insurance that are not guaranteed or not determined at issue.

(15) “Non-term group life” means a group policy or individual policies of life insurance issued to members of an employer group or other permitted group when:

(a) Every plan of coverage was selected by the employer or other group representative;

(b) Some portion of the premium is paid by the group or through payroll deduction; and

(16) “Policy owner” means the owner named in the policy or the certificate holder in the case of a group policy.

(17) “Premium outlay” means the amount of out-of-pocket premium assumed to be paid by the policy owner or other premium payer.

(18) “Self-supporting illustration” means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the 15th policy anniversary or the 20th policy anniversary for second-or-later-to-die policies (or upon policy expiration, if sooner), the accumulated value of all policy cash flows equals or exceeds the total policy owner value available. For this purpose, policy owner value includes cash surrender values and any other illustrated benefit amounts available at the policy owner's election.

(19) “Supplemental illustration” means an illustration furnished in addition to a basic illustration that meets the applicable requirements of this chapter, and that may be presented in a format differing from the basic illustration, but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.04 Incorporation by Reference.

The Actuarial Standard of Practice No. 24 Compliance with the NAIC Life Insurance Illustrations Model Regulation (Adopted by the Actuarial Standards Board, December 1995) is incorporated by reference.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.05 Policies To Be Illustrated.

A. Each insurer marketing policies to which this chapter is applicable shall notify the Commissioner whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on the effective date of this chapter, the insurer shall identify in writing those forms and whether or not an illustration will be used with the forms. For policy forms filed after the effective date of this chapter, the identification shall be made at the time of filing. Any previous identification may be changed by notice to the Commissioner.

B. Except as required by COMAR 31.09.05.07B(2) and .09A, if the insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for a policy using that form before the first policy anniversary is prohibited.

C. If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with this chapter is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished to an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.

D. Potential enrollees of non-term group life subject to this chapter shall be furnished a quotation with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and nonguaranteed basis appropriate to the group and the coverage. This quotation is not considered an illustration for purposes of this chapter, but all information provided shall be consistent with the illustrated scale. A basic illustration shall be provided at delivery of the certificate to enrollees for non-term group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer shall make a basic illustration available to any non-term group life enrollee who requests it.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.06 General Rules and Prohibitions.

A. An illustration used in the sale of a life insurance policy shall:

(1) Satisfy the applicable requirements of this chapter;

(2) Be clearly labeled “life insurance illustration”; and

(3) Contain the following basic information:

(a) Name of insurer,

(b) Name and business address of the producer or insurer's authorized representative, if any,

(d) Underwriting or rating classification upon which the illustration is based,

(e) Generic name of the policy, the company product name, if different, and the form number,

(f) Initial death benefit, and

(g) Dividend option election or application of nonguaranteed elements, if applicable.

B. When using an illustration in the sale of a life insurance policy, an insurer or its producers, or other authorized representatives may not:

(1) Represent the policy as anything other than a life insurance policy;

(2) Use or describe nonguaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

(3) State or imply that the payment or amount of nonguaranteed elements is guaranteed;

(4) Use an illustration that does not comply with the requirements of this chapter;

(5) Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

(6) Provide an applicant with an incomplete illustration;

(7) Represent in any way that premium payments are not required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;

(8) Use the term “vanish” or “vanishing premium”, or a similar term that implies the policy becomes paid up, to describe a plan for using nonguaranteed elements to pay a portion of future premiums;

(9) Use an illustration that is lapse supported, except for policies than can never develop nonforfeiture values; or

(10) Use an illustration that is not self-supporting.

C. If an interest rate used to determine the illustrated nonguaranteed elements is shown, it may not be greater than the earned interest rate underlying the disciplined current scale.

D. The insurer may choose to designate each year the method of determining assumed expenses for all policy forms from the following:

(1) Fully allocated expenses;

(2) Marginal expenses; and

(3) A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the Commissioner.

E. Marginal expenses may be used only if greater than a generally recognized expense table. If no generally recognized expense table is approved, fully allocated expenses shall be used.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.07 Standards for Basic Illustrations.

A. Format.

(1) A basic illustration shall conform with the requirements of this section.

(2) The illustration shall be labeled with the date on which it was prepared.

(3) Each page, including any explanatory notes or pages, shall be numbered and show its relationship to the total number of pages in the illustration; for example, the fourth page of a seven page illustration shall be labeled “page 4 of 7 pages”.

(4) The assumed dates of payment receipt and benefit pay-out within a policy year shall be clearly identified.

(5) If the age of the proposed insured is shown as a component of the tabular detail, the age shall be issue age plus the number of years the policy is assumed to have been in force.

(6) The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay.

(7) Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed.

(8) If the illustration shows any nonguaranteed elements, those elements cannot be based on a scale more favorable to the policy owner than the insurer's illustrated scale at any duration. These elements shall be clearly labeled as nonguaranteed.

(9) The guaranteed elements, if any, shall be:

(a) Shown before corresponding nonguaranteed elements; and

(b) Specifically referred to on any page of an illustration that shows or describes only the nonguaranteed elements; for example, “see page one for guaranteed elements”.

(10) The account or accumulation value of a policy, if shown, shall be:

(a) Identified by the name this value is given in the policy being illustrated; and

(b) Shown in close proximity to the corresponding value available upon surrender.

(11) The value available upon surrender shall be:

(a) Identified by the name this value is given in the policy being illustrated; and

(b) The amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans, and policy loan interests, as applicable.

(12) Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form.

(13) Any illustration of nonguaranteed elements shall be accompanied by a statement indicating that the:

(a) Benefits and values are not guaranteed;

(b) Assumptions on which they are based are subject to change by the insurer; and

(14) If the illustration shows that the premium payer may have the option to allow policy charges to be paid using nonguaranteed values, the illustration shall clearly disclose that a charge continues to be required and that, depending on actual results, the premium payer may need to continue or resume premium outlays. Similar disclosure shall be made for premium outlay of lesser amounts or shorter duration than the contract premium. If a contract premium is due, the premium outlay display may not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up.

(15) If the applicant plans to use dividends or policy values, guaranteed or nonguaranteed, to pay all or a portion of the contract premium or policy charges, or for any other purpose, the illustration may reflect those plans and the impact on future policy benefits and values.

B. Narrative Summary. A brief illustration shall include the following:

(1) A brief description of the policy being illustrated, including a statement that it is a life insurance policy;

(2) A brief description of the premium outlay or contract premium, as applicable, for the policy;

(3) A brief description of any policy features, riders, or options, guaranteed or nonguaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy;

(4) Identification and a brief definition of column headings and key terms used in the illustration; and

(5) A statement containing in substance that: “This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.”

C. Numeric Summary.

(1) Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years 5, 10, and 20, and at age 70, if applicable, on the following three bases:

(a) Policy guarantees;

(b) Insurer's illustrated scale; and

(i) Dividends at 50 percent of the dividends contained in the illustrated scale used,

(ii) Nonguaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used, and

(iii) All nonguaranteed charges, including but not limited to term insurance charges, and mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.

(2) For multiple life policies, the summary shall show policy years 5, 10, 20, and 30 for each of the three bases identified in §C(1) of this regulation.

(3) In addition, if coverage would cease before policy maturity or age 100, the year in which coverage ceases shall be identified for each of the three bases identified in §C(1) of this regulation.

D. Statements. Statements substantially similar to the following shall be included on the same page as the numeric summary and signed by the applicant, or the policy owner in the case of an illustration provided at time of delivery, as required in this chapter:

(1) A statement to be signed and dated by the applicant or policy owner reading as follows: “I have received a copy of this illustration and understand that any nonguaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed.”; and

(2) A statement to be signed and dated by the insurance producer or other authorized representative of the insurer reading as follows: “I certify that this illustration has been presented to the applicant and that I have explained that any nonguaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration.”

E. Tabular Detail.

(1) A basic illustration shall include the following for at least each policy year from 1 to 10 and for every fifth policy year after that ending at age 100, policy maturity, or final expiration and, except for term insurance beyond the twentieth year, for any year in which the premium outlay and contract premium, if applicable, is to change:

(a) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable;

(b) The corresponding guaranteed death benefit, as provided in the policy; and

(2) For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium.

(3) Nonguaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer's current practice is to pay terminal dividends. If any nonguaranteed elements are shown, they shall be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a nonguaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.

F. For a policy that does not require payment of a specific contract premium, the illustration required in §B(2) of this regulation shall show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the Internal Revenue Code.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.08 Standards for Supplemental Illustrations.

A. A supplemental illustration may be provided if:

(1) It is appended to, accompanied by, or preceded by a basic illustration that complies with this chapter;

(2) The nonguaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration;

(3) It contains the same statement required of a basic illustration that nonguaranteed elements are not guaranteed; and

(4) For a policy that:

(a) Has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration, or

(b) Does not require a contract premium, the premium outlay underlying the supplemental illustration is equal to the premium outlay shown in the basic illustration.

B. The supplemental illustration shall include a notice referring to the basic illustration for guaranteed elements and other important information.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.09 Delivery of Illustration and Record Retention.

A. If a basic illustration is used by an insurance producer or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with this chapter, shall be:

(1) Submitted to the insurer at the time of policy application; and

(2) Provided to the applicant.

B. If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of this chapter, shall be labeled “revised illustration”, and shall be signed and dated by the applicant or policy owner and producer or other authorized representative of the insurer not later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

C. If no illustration is used by an insurance producer or other authorized representative in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the producer or representative shall certify to that effect in writing on a form provided by the insurer. On the same form, the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided not later than at the time of the policy delivery. This form shall be submitted to the insurer at the time of policy application.

D. If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed not later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

E. If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurer's obligation under this section is satisfied if the insurer can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort is deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.

F. A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either an illustration was not used or that the policy was applied for other than as illustrated, shall be retained by the insurer until 3 years after the policy is no longer in force. A copy need not be retained if a policy is not issued.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.10 Annual Report; Notice to Policy Owners.

A. In the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:

(1) For universal life policies, the report shall include the following:

(a) The beginning and end date of the current report period;

(b) The policy value at the end of the previous report period and at the end of the current report period;

(c) The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type, such as interest, mortality, expense, and riders;

(d) The current death benefit at the end of the current report period on each life covered by the policy;

(e) The net cash surrender value of the policy as of the end of the current report period;

(f) The amount of outstanding loans, if any, as of the end of the current report period; and

(g) One of the following:

(i) For fixed premium policies: if, assuming guaranteed interest, mortality and expense loads, and continued scheduled premium payments, the policy's net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report, or

(ii) For flexible premium policies: if, assuming guaranteed interest, mortality and expense loads, the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report; or

(2) For all other policies, if applicable:

(a) Current death benefit;

(b) Annual contract premium;

(d) Current dividend;

(e) Application of current dividend; and

(f) Amount of outstanding loan.

B. Insurers writing life insurance policies that do not build nonforfeiture values shall only be required to provide an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.

C. If the annual report does not include an in force illustration, it shall contain the following notice displayed prominently: “IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling (insurer's phone number), writing to (insurer's name) at (insurer's address) or contacting your agent. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance department.” The insurer may vary the sequential order of the methods for obtaining an in force illustration.

D. Upon the request of the policy owner, the insurer shall furnish an in force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration shall comply with the requirements of Regulations .06A and B and .07A and E of this chapter. A signature or other acknowledgment of receipt of this illustration is not required.

E. If an adverse change in nonguaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of the change prominently displayed.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.11 Annual Certifications.

A. The board of directors of each insurer shall appoint one or more illustration actuaries.

B. The illustration actuary shall certify that the disciplined current scale used in illustrations is in conformity with the Actuarial Standard of Practice No. 24 Compliance with the NAIC Life Insurance Illustrations Model Regulations, promulgated by the Actuarial Standards Board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of this chapter.

C. The illustration actuary:

(1) Shall be a member in good standing of the American Academy of Actuaries;

(2) Shall be familiar with the standard of practice regarding life insurance policy illustrations;

(3) May not have been found by the Commissioner, following appropriate notice and hearing to have:

(a) Violated any provision of, or any obligation imposed by, the insurance law, or other law, in the course of dealings as an illustration actuary,

(b) Been found guilty of fraudulent or dishonest practices,

(d) Resigned or been removed as an illustration actuary within the past 5 years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards;

(4) May not fail to notify the Commissioner of any action taken by a commissioner of another state similar to that under §C(3) of this regulation;

(5) Shall disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous 5 years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale; and

(6) Shall disclose in the annual certification one of the following methods used to allocate overhead expenses for all illustrations:

(a) Fully allocated expenses,

(b) Marginal expenses, or

(c) A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the Commissioner.

D. Filing of Certification.

(1) The illustration actuary shall file a certification with the board of directors of the insured and with the Commissioner as follows:

(a) Annually for all policy forms for which illustrations are used; and

(b) Before a new policy form is illustrated.

(2) If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the Commissioner promptly.

E. If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the Commissioner promptly of this inability to certify.

F. A responsible officer of the insurer, other than the illustration actuary, shall certify annually that the:

(1) Illustration formats meet the requirements of this chapter and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary; and

(2) Company has provided its agents with information about the expense allocation method used by the company in its illustrations and disclosed as required in §C(6) of this regulation.

G. The annual certifications shall be provided to the Commissioner before each year by a date determined by the insurer.

H. If an insurer changes the illustration actuary responsible for all or a portion of the company's policy forms, the insurer shall notify the Commissioner of that fact promptly and disclose the reason for the change.

I. The following shall be disclosed in the annual certification:

(1) If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies; and

(2) If nonguaranteed elements illustrated for both new and in force policies are not consistent with the nonguaranteed elements actually being paid, charged, or credited to the same or similar forms.

Cross References

31.09.09.03B(10)

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.12 Penalties.

In addition to any other penalties provided by the laws of this State, an insurer or producer that violates a requirement of this chapter is guilty of a violation of Insurance Article, §§27-202 and 27-203, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.09.13 Separability.

If any provision of this chapter or its application to any person or circumstance is for any reason held to be invalid by any court of law, the remainder of the chapter and its application to other persons or circumstances are not affected.

History

Administrative History: Effective date: January 1, 1998 (24:23 Md. R. 1610)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.27 to COMAR 31.09.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 27-202, and 27-203, Annotated Code of Maryland

31.09.10 Separate Account Investments under Funding Agreements

COMAR 31.09.10.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Funding agreement” means a contract described in Insurance Article, §16-113, Annotated Code of Maryland, whereby an insurer may accept and accumulate funds and make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies.

(2) “Separate account” means an account:

(a) That is segregated from, and maintained separately from, an insurer's general account; and

(b) To which amounts paid to a Maryland-domiciled insurer under a funding agreement are allocated, as authorized by Insurance Article, §16-113, Annotated Code of Maryland.

History

Administrative History: Effective date: June 19, 2006 (33:12 Md. R. 999)
Authority: Insurance Article, §16-113, Annotated Code of Maryland

COMAR 31.09.10.02 Plan of Operation Requirements.

A. A Maryland-domiciled insurer may not issue a funding agreement for which a separate account will be used unless prior to delivery or issuance for delivery in the State, the form of the contract and the plan of operation have been filed with and approved by the Commissioner.

B. A Maryland-domiciled insurer shall include in its plan of operation for a funding agreement for which a separate account will be used a statement of investment policy for the separate account and any supplemental account, including:

(1) Requirements for diversification, maturity, type, and quality of assets; and

(2) As applicable, target duration for matching funding agreement liabilities or the degree to which the investment policy is likely to match the performance of an interest rate series or index on which the funding agreement is based.

History

Administrative History: Effective date: June 19, 2006 (33:12 Md. R. 999)
Authority: Insurance Article, §16-113, Annotated Code of Maryland

COMAR 31.09.10.03 Investment Requirements.

A. Application of Insurance Article, §5-511, Annotated Code of Maryland.

(1) Subject to §A(2) of this regulation, and Insurance Article, §16-113(d)(3), Annotated Code of Maryland, amounts allocated to a separate account and any resulting accumulations shall be invested and reinvested in accordance with the classes of investments, and the limitations on classes of investments, set forth in Insurance Article, §5-511, Annotated Code of Maryland.

(2) For the purpose of applying Insurance Article, §5-511, Annotated Code of Maryland, pursuant to §A(1) of this regulation, separate account assets shall be treated as admitted assets and be subject to the requirements and limitations of Insurance Article, §5-511, Annotated Code of Maryland, that apply to admitted assets.

B. Notwithstanding §A of this regulation, amounts allocated to a separate account and any resulting accumulations are not subject to the requirements and limitations set forth in Insurance Article, §5-511, Annotated Code of Maryland if the insurer obtains:

(1) Prior approval from the Commissioner for the amounts not to be subject to the requirements and limitations set forth in Insurance Article, §5-511, Annotated Code of Maryland; and

(2) Written consent of the holder of the funding agreement to the terms of the investment policy for the separate account.

History

Administrative History: Effective date: June 19, 2006 (33:12 Md. R. 999)
Authority: Insurance Article, §16-113, Annotated Code of Maryland

31.09.11 Viaticals

COMAR 31.09.11.01 Verification of Coverage for Life Insurance Policies.

A. An insurer shall respond to a request for verification of coverage submitted by a viatical settlement provider or a viatical settlement broker within 30 days after the request is received.

B. The request by the viatical settlement provider or viatical settlement broker shall include all items required by Insurance Article, §8-610.1(a), Annotated Code of Maryland.

C. An insurer may charge a fee as set forth in Insurance Article, §8-610.1(b), Annotated Code of Maryland.

History

Administrative History: Effective date: March 12, 2007 (34:5 Md. R. 562)
Authority: Insurance Article, §§2-209 and 8-610.1, Annotated Code of Maryland;Ch. 146, Acts of 2006

COMAR 31.09.11.02 Form.

A. The “Verification of Coverage for Life Insurance Policies” form adopted by the Commissioner under §B of this regulation shall be used.

B. The form required in §A of this regulation shall read as follows:

FORM AT END OF CHAPTER

Attachments

31.09.11.02-form

History

Administrative History: Effective date: March 12, 2007 (34:5 Md. R. 562)
Authority: Insurance Article, §§2-209 and 8-610.1, Annotated Code of Maryland;Ch. 146, Acts of 2006

31.09.12 Suitability in Annuity Transactions

COMAR 31.09.12.01 Purpose.

A. The purpose of this chapter is to require producers to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers, at the time of the transaction, are effectively addressed.

B. Nothing provided in this chapter shall be construed to create or imply a private cause of action for a violation of this chapter or to subject a producer to civil liability under the best interest standard of care outlined in Regulation .04 of this chapter or under standards governing the conduct of a fiduciary or a fiduciary relationship.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.02 Scope.

A. In General. This chapter applies to any sale or recommendation of an annuity.

B. Exceptions. Unless otherwise specifically included, this chapter does not apply to transactions involving:

(1) Direct response solicitations if there is no recommendation based on information collected from the consumer pursuant to this regulation;

(2) Contracts used to fund:

(a) An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act;

(b) A plan described by 26 U.S.C. §§401(a), 401(k), 403(b), 408(k), or 408(p) if established or maintained by an employer;

(c) A government or church plan defined in 26 U.S.C. §414, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under 26 U.S.C. §457; or

(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;

(3) Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or

(4) Formal prepaid funeral contracts.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined:

(1) “Annuity” means an annuity that is an insurance product under State law that is individually solicited, whether the product is classified as an individual or group annuity.

(2) “Cash compensation” means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer.

(3) “Comparable standards” means:

(a) With respect to broker-dealers and registered representatives of broker-dealers, applicable SEC and FINRA rules pertaining to best interest obligations and supervision of annuity recommendations and sales, including, but not limited to, Regulation Best Interest and any amendments or successor regulations thereto;

(b) With respect to investment advisers registered under federal securities laws or investment adviser representatives, the fiduciary duties and all other requirements imposed on such investment advisers or investment adviser representatives by contract or under the Investment Advisers Act of 1940, including, but not limited to, the Form ADV and interpretations; and

(c) With respect to plan fiduciaries or fiduciaries, the duties, obligations, prohibitions, and all other requirements attendant to such status under ERISA or the IRC and any amendments or successor statutes thereto.

(4) “Consumer profile information” means information that is reasonably appropriate to determine whether a recommendation addresses the consumer’s financial situation, insurance needs, and financial objectives, including, at a minimum, the following:

(a) Age;

(b) Annual income;

(d) Financial experience;

(e) Insurance needs;

(f) Financial objectives;

(g) Intended use of the annuity;

(h) Financial time horizon;

(i) Existing assets or financial products, including investment, annuity and insurance holdings;

(j) Liquidity needs;

(k) Liquid net worth;

(l) Risk tolerance, including, but not limited to, willingness to accept non-guaranteed elements in the annuity;

(m) Financial resources used to fund the annuity; and

(n) Tax status.

(5) “Continuing education credit” or “CE credit” means 1 hour of continuing education as defined in COMAR 31.03.02.02B(9).

(6) “ERISA” means the Employee Retirement and Income Security Act.

(7) “Financial professional” means a producer that is regulated and acting as:

(a) A broker-dealer registered under federal securities laws or a registered representative of a broker-dealer;

(b) An investment adviser registered under federal securities laws or an investment adviser representative associated with the federal registered investment adviser; or

(c) A plan fiduciary under 29 CFR §2510.3-21 or fiduciary under 26 U.S.C. §4975(e)(3), or any amendments or successor statutes thereto.

(8) “FINRA” means the Financial Industry Regulatory Authority or a succeeding agency.

(9) “Insurer” has the meaning stated in Insurance Article, §1-101(v), Annotated Code of Maryland.

(10) “Intermediary” means an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurer’s annuities by producers.

(11) Material Conflict of Interest.

(a) “Material conflict of interest” means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation.

(b) “Material conflict of interest” does not include cash compensation or non-cash compensation.

(12) “Non-cash compensation” means any form of compensation that is not cash compensation, including, but not limited to, health insurance, office rent, office support and retirement benefits.

(13) “Non-guaranteed elements” means the premiums, credited interest rates (including any bonus), benefits, values, dividends, non-interest based credits, charges, or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation.

(14) “Producer” means:

(a) A licensed insurance producer as defined in Insurance Article, §1-101(w), Annotated Code of Maryland; and

(b) An insurer if no producer is involved.

(15) “Provider” has the meaning stated in COMAR 31.03.02.02B(15).

(16) Recommendation.

(a) “Recommendation” means advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, an exchange, or a replacement of an annuity in accordance with that advice.

(b) “Recommendation” does not include general communication to the public, generalized customer services assistance or administrative support, general educational information and tools, prospectuses, or other product and sales material.

(17) “Replacement” has the meaning stated in COMAR 31.09.05.03B(11).

(18) “SEC” means the United States Securities and Exchange Commission.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.04 Best Interest Obligations.

A. The requirements under this regulation do not create a fiduciary obligation or relationship and only create a regulatory obligation as established in this chapter.

B. A producer, when making a recommendation of an annuity, shall act in the best interest of the consumer under the circumstances known by the producer at the time the recommendation is made, without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest.

C. A producer is considered to be acting in the best interest of the consumer if the producer satisfies the obligations described in §§D—G of this regulation.

D. Care Obligation.

(1) The producer, in making a recommendation, shall exercise reasonable diligence, care, and skill to:

(a) Know the consumer’s financial situation, insurance needs, and financial objectives;

(b) Understand the available recommendation options after making a reasonable inquiry into options available to the producer;

(c) Have a reasonable basis to believe the recommended option effectively addresses the consumer’s financial situation, insurance needs, and financial objectives over the life of the product, as evaluated in light of the consumer profile information; and

(d) Communicate the basis or bases of the recommendation.

(2) The requirements under §D(1) of this regulation include making reasonable efforts to obtain consumer profile information from the consumer prior to the recommendation of an annuity.

(3) The requirements under §D(1) of this regulation require a producer to consider the types of products the producer is authorized and licensed to recommend or sell that address the consumer’s financial situation, insurance needs, and financial objectives.

(4) The requirements under §D(1) of this regulation do not require analysis or consideration of any products outside the authority and license of the producer or other possible alternative products or strategies available in the market at the time of the recommendation.

(5) Producers shall be held to standards applicable to producers with similar authority and licensure.

(6) The factors generally relevant in making a determination whether an annuity effectively addresses the consumer’s financial situation, insurance needs, and financial objectives are the consumer profile information, characteristics of the insurer, and product costs, rates, benefits, and features.

(7) The level of importance of each factor described in §D(6) of this regulation may vary depending on the facts and circumstances of a particular case, but each factor may not be considered in isolation.

(8) The requirements under §D(1) of this regulation include having a reasonable basis to believe the consumer would benefit from certain features of the annuity, such as annuitization, death or living benefit, or other insurance-related features.

(9) The requirements under §D(1) of this regulation apply to the particular annuity as a whole and the underlying subaccounts to which funds are allocated at the time of purchase or exchange of an annuity, and riders and similar product enhancements, if any.

(10) The requirements under §D(1) of this regulation do not mean the annuity with the lowest one-time or multiple occurrence compensation structure shall necessarily be recommended.

(11) The requirements under §D(1) of this regulation do not mean the producer has ongoing monitoring obligations under the care obligation under this section, although such an obligation may be separately owed under the terms of a fiduciary, consulting, investment advising or financial planning agreement between the consumer and the producer.

(12) In the case of an exchange or replacement of an annuity, the producer shall consider the whole transaction, which includes taking into consideration whether:

(a) The consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living, or other contractual benefits, or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements;

(b) The replacing product would substantially benefit the consumer in comparison to the replaced product over the life of the product; and

(c) The consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 60 months.

(13) Nothing in this chapter shall be construed to require a producer to obtain any license other than a producer license with the appropriate line of authority to sell, solicit, or negotiate insurance in this State, including but not limited to any securities license, in order to fulfill the duties and obligations contained in this chapter, provided the producer does not give advice or provide services that are otherwise subject to securities laws or engage in any other activity requiring other professional licenses.

E. Disclosure Obligation.

(1) Prior to the recommendation or sale of an annuity, the producer shall prominently disclose the following information to the consumer:

(a) A description of the scope and terms of the relationship with the consumer and the role of the producer in the transaction;

(b) An affirmative statement on whether the producer is licensed and authorized to sell the following products:

(i) Fixed annuities;

(ii) Fixed indexed annuities;

(iii) Variable annuities;

(iv) Life insurance;

(v) Mutual funds;

(vi) Stocks and bonds; and

(vii) Certificates of deposit;

(c) An affirmative statement describing the insurer the producer is authorized, contracted, appointed, or otherwise able to sell insurance products for, using the following descriptions:

(i) One insurer;

(ii) From two or more insurers; or

(iii) From two or more insurers although primarily contracted with one insurer;

(d) A description of the sources and types of cash compensation and non-cash compensation to be received by the producer, including whether the producer is to be compensated for the sale of a recommended annuity by commission as part of premium or other remuneration received from the insurer, intermediary, or other producer or by fee as a result of a contract for advice or consulting services; and

(e) A notice of the consumer’s right to request additional information regarding cash compensation described in §E(3) of this regulation.

(2) The disclosure described in §E(1) of this regulation shall be in a format substantially similar to that specified in Regulation .11 of this chapter.

(3) Upon request of the consumer or the consumer’s designated representative, the producer shall disclose:

(a) A reasonable estimate of the amount of cash compensation to be received by the producer, which may be stated as a range of amounts or percentages; and

(b) Whether the cash compensation is a one-time or multiple occurrence amount and, if a multiple occurrence amount, the frequency and amount of the occurrence, which may be stated as a range of amounts or percentages.

(4) Prior to or at the time of the recommendation or sale of an annuity, the producer shall have a reasonable basis to believe the consumer has been informed of various features of the annuity, such as the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity, mortality and expense fees, investment advisory fees, any annual fees, potential charges for and features of riders or other options of the annuity, limitations on interest returns, potential changes in non-guaranteed elements of the annuity, insurance and investment components, and market risk.

(5) The disclosure obligation under §E of this regulation is intended to supplement and not replace the disclosure requirements under COMAR 31.15.04.05.

F. Conflict of Interest Obligation. A producer shall identify and avoid or reasonably manage and disclose material conflicts of interest, including material conflicts of interest related to an ownership interest.

G. Documentation Obligation.

(1) At the time of recommendation or sale, a producer shall:

(a) Make a written record of any recommendation and the basis for the recommendation subject to this regulation;

(b) Obtain a consumer signed statement documenting:

(i) A consumer’s refusal to provide the consumer profile information, if any; and

(ii) A consumer’s understanding of the ramifications of not providing the consumer’s consumer profile information or of providing insufficient consumer profile information; and

(c) Obtain a consumer signed statement acknowledging the annuity transaction is not recommended if a consumer decides to enter into an annuity transaction that is not based on the producer’s recommendation.

(2) The statement described in §G(1)(b) of this regulation shall be in a format substantially similar to that specified in Regulation .12 of this chapter.

(3) The statement described in §G(1)(c) of this regulation shall be in a format substantially similar to that specified in Regulation .13 of this chapter.

H. Application of the Best Interest Obligation.

(1) Any requirement applicable to a producer under this subsection shall apply to every producer who has exercised material control or influence in the making of a recommendation and has received direct compensation as a result of the recommendation or sale, regardless of whether the producer has had any direct contact with the consumer.

(2) Activities such as providing or delivering marketing or educational materials, product wholesaling or other back office product support, and general supervision of a producer do not, in and of themselves, constitute material control or influence.

I. Transactions Not Based on a Recommendation.

(1) Except as provided under §I(2) of this regulation, a producer shall have no obligation to a consumer under §§B—G of this regulation related to any annuity transaction if:

(a) No recommendation is made;

(b) A recommendation is made and is later found to have been prepared based on materially inaccurate information provided by the consumer;

(c) A consumer refuses to provide relevant consumer profile information and the annuity transaction is not recommended; or

(d) A consumer decides to enter into an annuity transaction that is not based on a recommendation of the producer.

(2) An insurer’s issuance of an annuity subject to §I(1) of this regulation shall be reasonable under all the circumstances actually known to the insurer at the time the annuity is issued.

Cross References

31.09.12.01B

31.09.12.05A

31.09.12.05B(6)

31.09.12.11

31.09.12.12

31.09.12.13

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.05 Supervision System.

A. Except as permitted under Regulation .04I of this chapter, an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity would effectively address the particular consumer’s financial situation, insurance needs, and financial objectives based on the consumer’s consumer profile information.

B. An insurer shall establish and maintain a supervision system that is reasonably designed to achieve the insurer’s and its producers’ compliance with this regulation, including, but not limited to, the following:

(1) The insurer shall establish and maintain reasonable procedures to inform its producers of the requirements of this regulation and shall incorporate the requirements of this regulation into relevant producer training manuals;

(2) The insurer shall establish and maintain standards for producer product training and shall establish and maintain reasonable procedures to require its producers to comply with the requirements of Regulation .08 of this chapter;

(3) The insurer shall provide product-specific training and training materials which explain all material features of its annuity products to its producers;

(4) The insurer shall establish and maintain procedures for the review of each recommendation prior to issuance of an annuity that are designed to ensure there is a reasonable basis to determine that the recommended annuity would effectively address the particular consumer’s financial situation, insurance needs, and financial objectives. Such review procedures may:

(a) Apply a screening system for the purpose of identifying selected transactions for additional review; and

(b) Be accomplished electronically or through other means including, but not limited to, physical review. An electronic or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria;

(5) The insurer shall establish and maintain reasonable procedures to detect recommendations that are not in compliance with Regulations .04, .06, and .07 of this chapter. An insurer may comply with this section by applying sampling procedures or by confirming the consumer profile information or other required information under this section after issuance or delivery of the annuity. The procedures described in this section may include, but are not limited to:

(a) Confirmation of the consumer’s profile information;

(b) Systematic consumer surveys;

(d) Confirmation letters;

(e) Producer statements or attestations; or

(f) Programs of internal monitoring;

(6) The insurer shall establish and maintain reasonable procedures to assess, prior to or upon issuance or delivery of an annuity, whether a producer has provided to the consumer the information required to be provided under this Regulation .04 of this chapter;

(7) The insurer shall establish and maintain reasonable procedures to identify and address suspicious consumer refusals to provide consumer profile information;

(8) The insurer shall establish and maintain reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific annuities within a limited period of time;

(9) The requirements of §B(8) of this regulation are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits, or other employee benefits by employees if those benefits are not based upon the volume of sales of a specific annuity within a limited period of time; and

(10) On an annual basis, the insurer shall provide a written report to senior management, including to the senior manager responsible for audit functions, that details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.

C. Nothing in this regulation restricts an insurer from contracting for performance of a function, including maintenance of procedures, required under this regulation.

D. An insurer is responsible for taking appropriate corrective action and may be subject to sanctions and penalties pursuant to Regulation .09 of this chapter, regardless of whether the insurer contracts for performance of a function and regardless of the insurer’s compliance with this section. An insurer’s supervision system under this regulation shall include supervision of contractual performance under this regulation, including, but not limited to:

(1) Monitoring and, as appropriate, conducting audits to assure that the contracted function is properly performed; and

(2) Annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has a reasonable basis to represent, and does represent, that the function is properly performed.

E. An insurer is not required to include in its system of supervision:

(1) A producer’s recommendations to consumers of products other than the annuities offered by the insurer; or

(2) Consideration of or comparison to options available to the producer or compensation relating to those options other than annuities or other products offered by the insurer.

Cross References

31.09.12.07D

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.06 Prohibited Practices.

A producer or insurer may not dissuade or attempt to dissuade a consumer from:

A. Truthfully responding to an insurer’s request for confirmation of the consumer profile information;

B. Filing a complaint; or

C. Cooperating with the investigation of a complaint.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.07 Safe Harbor.

A. Recommendations and sales of annuities made in compliance with comparable standards shall satisfy the requirements under this chapter.

B. This regulation applies to all recommendations and sales of annuities made by financial professionals in compliance with business rules, controls, and procedures that satisfy a comparable standard even if such standard would not otherwise apply to the product or recommendation at issue.

C. Nothing in this regulation shall limit the Commissioner’s ability to investigate and enforce the provisions of this chapter.

D. Nothing in §A of this regulation shall limit the insurer’s obligation to comply with Regulation .05A of this chapter, although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional.

E. For §A of this regulation to apply, an insurer shall:

(1) Monitor the relevant conduct of the financial professional seeking to rely on §A of this regulation or the entity responsible for supervising the financial professional, such as the financial professional’s broker-dealer or an investment adviser registered under federal securities laws using information collected in the normal course of an insurer’s business; and

(2) Provide to the entity responsible for supervising the financial professional seeking to rely on §A of this regulation, such as the financial professional’s broker-dealer or investment adviser registered under federal securities laws, information and reports that are reasonably appropriate to assist such entity to maintain its supervision system.

F. A financial professional who is not explicitly acting in compliance with the relevant comparable standards is not eligible for the safe harbor under §A of this regulation and is subject to compliance with the requirements of this chapter.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.08 Producer Training.

A. A producer may not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer’s standards for product training.

B. A producer may rely on insurer-provided product-specific training standards and materials to comply with §A of this regulation.

C. Training Requirements.

(1) A producer who engages in the sale of annuity products shall complete a one-time four-credit training course approved by the Maryland Insurance Administration and provided by a Maryland Insurance Administration approved education provider.

(2) A producer who holds a life insurance line of authority on the effective date of this regulation and who desires to sell annuities shall complete the requirements of §C(1) of this regulation within 6 months after the effective date of this regulation.

(3) An individual who obtains a life insurance line of authority on or after the effective date of this regulation may not engage in the sale of annuities until the annuity training course required under §C(1) of this regulation has been completed.

(4) The minimum length of the training required under §C(1) of this regulation shall be sufficient to qualify for at least four continuing education credits but may be longer.

(5) The training required under §C(1) of this regulation shall include information on the following topics:

(a) The types of annuities and various classifications of annuities;

(b) Identification of the parties to an annuity;

(d) The application of income taxation of qualified and non-qualified annuities;

(e) The primary uses of annuities; and

(f) Appropriate standard of conduct, sales practices, replacement, and disclosure requirements.

(6) Providers of courses intended to comply with §C(1) of this regulation:

(a) Shall cover all topics listed in the prescribed outline;

(b) May not present any marketing information or provide training on sales techniques or provide specific information about a particular insurer’s products; and

(7) A provider of an annuity training course intended to comply with §C(1) of this regulation shall comply with the rules and guidelines applicable to producer continuing education courses as set forth in COMAR 31.03.02.

(8) Within 6 months after the effective date of this regulation, a producer who has completed an annuity training course approved by the Maryland Insurance Administration prior to the effective date of this regulation shall complete either:

(a) A new four-credit training course approved by the Maryland Insurance Administration after the effective date of this regulation; or

(b) An additional one-time one-credit training course approved by the Maryland Insurance Administration and provided by the Maryland Insurance Administration approved education provider on appropriate sales practices, replacement, and disclosure requirements under this chapter.

(9) Annuity training courses may be conducted and completed by classroom or self-study methods in accordance with COMAR 31.03.02.

(10) A provider of annuity training shall comply with the reporting requirements and shall issue certificates of completion in accordance with COMAR 31.03.02.

(11) The satisfaction of the training requirements of another state that are substantially similar to the requirements of this section shall be deemed to satisfy the training requirements of this regulation.

(12) The satisfaction of the components of the training requirements of any course or courses with components substantially similar to the provisions of §C of this regulation shall be deemed to satisfy the training requirements of this regulation.

(13) An insurer shall verify that a producer has completed the annuity training course required under this subsection before allowing the producer to sell an annuity product for that insurer.

(14) An insurer may satisfy its responsibility under this regulation by obtaining certificates of completion of the training course or obtaining reports provided by commissioner-sponsored database systems or vendors or from a reasonably reliable commercial database vendor that has a reporting arrangement with approved insurance education providers.

Cross References

31.09.12.05B(2)

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.09 Compliance and Penalties.

A. An insurer is responsible for compliance with this chapter.

B. If a violation of this chapter occurs, because of either the action or the inaction of the insurer or its producer, the Commissioner may order:

(1) An insurer to take reasonably appropriate corrective action for any consumer harmed by the insurer’s, or by its producer’s, violation of this chapter;

(2) A general agency, independent agency, or a producer to take reasonably appropriate corrective action for any consumer harmed by the producer’s violation of this chapter; and

(3) Appropriate penalties and sanctions.

C. Penalties.

(1) A producer who violates this chapter is subject to a penalty or other appropriate sanction under Insurance Article, §10-126, Annotated Code of Maryland.

(2) An insurer that violates this chapter is subject to a penalty or other appropriate sanction under Insurance Article, §4-113, Annotated Code of Maryland.

Cross References

31.09.12.05D

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.10 Record Keeping.

A. Insurers, general agents, independent agencies, and producers shall maintain or be able to make available to the Commissioner records of the information collected from the consumer and other information used in making the recommendations that were the basis for insurance transactions for 7 years after the insurance transaction is completed by the insurer.

B. An insurer is permitted, but is not required, to maintain documentation on behalf of a producer.

C. Records required to be maintained by this regulation may be maintained in paper, photographic, micro processed, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document, if the copy of the record is maintained in a manner that:

(1) Is clear and legible;

(2) Accurately reproduces the original document in its entirety, including any attachments to the document;

(3) Is capable of producing a clear and legible hard copy of the original document; and

(4) Preserves evidence of any signature contained on the document.

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.11 Producer Disclosure for Annuities Form.

The form to be used for providing the disclosure required by Regulation .04E(1) of this chapter can be found here:

FORM AT END OF CHAPTER

Cross References

31.09.12.04E(2)

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.12 Consumer Refusal to Provide Information Form.

The form to be used for obtaining the consumer signed statement required by Regulation .04G(1)(b) of this chapter can be found here:

FORM AT END OF CHAPTER

Cross References

31.09.12.04G(2)

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

COMAR 31.09.12.13 Consumer Decision to Purchase Annuity Not Based on Recommendation Form.

The form to be used for obtaining the consumer signed statement required by Regulation .04G(1)(c) of this chapter can be found here:

FORM AT END OF CHAPTER

Cross References

31.09.12.04G(3)

Attachments

31.09.12.11-form

31.09.12.12-form

31.09.12.13-form

History

Administrative History: Effective date: July 1, 2007 (34:8 Md. R. 768)
Administrative History: ——————
Administrative History: Chapter revised effective November 1, 2011 (38:10 Md. R. 618)
Administrative History: ——————
Administrative History: Regulations .01—.11 repealed and new Regulation .01—.13 adopted effective October 8, 2022 (49:8 Md. R. 501)
Authority: Insurance Article, §§2-109(a), 4-113, 10-126(a)(13) and (d), 27-102, 27-202, and 27-203, Annotated Code of Maryland

31.09.13 Military Sales Practices

COMAR 31.09.13.01 Purpose.

A. The purpose of this chapter is to set forth standards to protect active duty service members of the United States Armed Forces from dishonest and predatory insurance sales practices by declaring certain identified practices to be false, misleading, deceptive, or unfair.

B. Nothing in this chapter may be construed to create or imply a private cause of action for a violation of this chapter.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.02 Scope.

This chapter applies only to the solicitation or sale of any life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States Armed Forces.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.03 Incorporation by Reference.

In this chapter, the following documents are incorporated by reference:

A. 38 U.S.C. §1965 et seq. (2007);

B. Internal Revenue Code, 26 U.S.C. §501(c)(23) (2007);

C. Department of Defense DoD Instruction 1344.07—Personal Commercial Solicitation on DoD Installations (March 30, 2006);

D. Truth in Savings Act, 12 U.S.C. §4301 et seq. (2007), and the regulations promulgated under it; and

E. §10 of the “Military Personnel Financial Services Protection Act,” Pub. L. No. 109-290, p.16.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.04 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Active Duty.

(a) “Active duty” means full-time duty in the active military service of the United States and includes members of the reserve component, National Guard and Reserve, while serving under published orders for active duty or full-time training.

(b) “Active duty” does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of less than 31 calendar days.

(2) “Annuity” means annuity as defined in Insurance Article, §1-101(d), Annotated Code of Maryland.

(3) “Department of Defense (DoD) Personnel” means all active duty service members and all civilian employees, including nonappropriated fund employees and special government employees, of the Department of Defense.

(4) “Door-to-door” means a solicitation or sales method whereby an insurance producer proceeds randomly or selectively from household to household without prior specific appointment.

(5) “General advertisement” means an advertisement having as its sole purpose the promotion of the reader's or viewer's interest in the concept of insurance, or the promotion of the insurer or the insurance producer.

(6) “Insurance producer” has the meaning stated in Insurance Article, §1-101(u), Annotated Code of Maryland.

(7) “Insurer” has the meaning stated in Insurance Article, §1-101(v), Annotated Code of Maryland.

(8) “Known” or “knowingly” means, depending on its use in this chapter, the insurance producer or insurer had actual awareness, or in the exercise of ordinary care should have known, at the time of the act or practice complained of, that the person solicited:

(a) Is a service member; or

(b) Is a service member with a pay grade of E-4 or below.

(9) “Life insurance” has the meaning stated in Insurance Article, §1-101(x), Annotated Code of Maryland.

(10) “Military installation” means any federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty, including barracks, transient housing, and family quarters.

(11) “MyPay” is a Defense Finance and Accounting Service (DFAS) web-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms.

(12) “Service member” means any active duty officer, commissioned and warrant, or enlisted member of the United States Armed Forces.

(13) Side Fund.

(a) “Side fund” means a fund or reserve that is part of or otherwise attached to a life insurance policy by rider, endorsement, or other mechanism which accumulates premium or deposits with interest or by other means.

(b) “Side fund” does not include:

(i) Accumulated value or cash value or secondary guarantees provided by a universal life policy;

(ii) Cash values provided by a whole life policy which are subject to standard nonforfeiture law for life insurance; or

(iii) A premium deposit fund which contains only premiums paid in advance which accumulate at interest, imposes no penalty for withdrawal, does not permit funding beyond future required premiums, is not marketed or intended as an investment, and does not carry a commission, either paid or calculated.

(14) “Specific appointment” means a prearranged appointment agreed upon by both parties and definite as to place and time.

(15) “United States Armed Forces” means all components of the Army, Navy, Air Force, Marine Corps, and Coast Guard.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.05 Exemptions.

A. This chapter does not apply to solicitations or sales involving:

(1) Credit insurance;

(2) Group life insurance or group annuities where there is no in-person, face-to-face solicitation of individuals by an insurance producer or where the contract or certificate does not include a side fund;

(3) An application to the existing insurer that issued the existing policy or contract when:

(a) A contractual change or a conversion privilege is being exercised;

(b) The existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner; or

(4) Individual health policies, including disability income policies;

(5) Contracts offered by Service members' Group Life Insurance (SGLI) or Veterans' Group Life Insurance (VGLI), as authorized by 38 U.S.C. §1965 et seq. (2007);

(6) Life insurance contracts offered through or by a nonprofit military association, qualifying under 26 U.S.C. §501(c)(23) (2007), and which are not underwritten by an insurer; or

(7) Contracts used to fund:

(a) An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);

(b) A plan described by §401(a), 401(k), 403(b), 408(k), or 408(p) of the Internal Revenue Code, as amended, if established or maintained by an employer;

(c) A government or church plan defined in §414 of the Internal Revenue Code, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under §457 of the Internal Revenue Code;

(d) A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;

(e) Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or

(f) Prearranged funeral contracts.

B. Nothing in this chapter may be construed to abrogate the ability of nonprofit organizations to educate members of the United States Armed Forces in accordance with Department of Defense DoD Instruction 1344.07—Personal Commercial Solicitation on DoD Installations.

C. For purposes of this chapter, general advertisements, direct mail, and internet marketing do not constitute solicitation.

D. Telephone Marketing.

(1) Telephone marketing does not constitute solicitation, if the caller:

(a) Explicitly and conspicuously discloses that the product concerned is life insurance or annuity; and

(b) Makes no statements that avoid a clear and unequivocal statement that life insurance or annuity is the subject matter of the solicitation.

(2) Nothing in this section may be construed to exempt an insurer or insurance producer from this chapter in any in-person, face-to-face meeting established as a result of the solicitation exemptions identified in this regulation.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.06 Practices Declared False, Misleading, Deceptive, or Unfair on a Military Installation.

A. The following acts or practices when committed on a military installation by an insurer or insurance producer with respect to the in-person, face-to-face solicitation of life insurance or annuity are prohibited as false, misleading, deceptive, or unfair:

(1) Knowingly soliciting the purchase of any life insurance product or annuity door-to-door or without first establishing a specific appointment for each meeting with the prospective purchaser;

(2) Soliciting service members in a group or mass audience or in a captive audience where attendance is not voluntary;

(3) Knowingly making appointments with or soliciting service members during their normally scheduled duty hours;

(4) Making appointments with or soliciting service members in barracks, day rooms, unit areas, transient personnel housing, or other areas where the installation commander has prohibited solicitation;

(5) Soliciting the sale of life insurance or annuity without first obtaining permission from the installation commander or the commander's designee;

(6) Posting unauthorized bulletins, notices, or advertisements;

(7) Failing to present DD Form 2885, Personal Commercial Solicitation Evaluation, to service members solicited or encouraging service members solicited not to complete or submit a DD Form 2885, as set forth in §C of this regulation; and

(8) Knowingly accepting an application or issuing a policy for life insurance or annuity, on the life of an enlisted member of the United States Armed Forces without first obtaining for the insurer's files a completed copy of any required form which confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance established by regulations, directives, or rules of the DoD or any branch of the Armed Forces.

B. The following acts or practices when committed on a military installation by an insurer or insurance producer constitute corrupt practices, improper influences, or inducements and therefore prohibited as false, misleading, deceptive or unfair:

(1) Using DoD personnel, directly or indirectly, as a representative or agent in any official or business capacity, with or without compensation with respect to the solicitation or sale of life insurance or annuity to service members; and

(2) Using an insurance producer to participate in any United States Armed Forces sponsored education or orientation program.

C. Personal Commercial Solicitation Evaluation Form.

FORM AT END OF CHAPTER

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.07 Practices Declared False, Misleading, Deceptive, or Unfair Regardless of Location.

A. The following acts or practices by an insurer or insurance producer constitute corrupt practices, improper influences, or inducements, regardless of location, and therefore, are prohibited as false, misleading, deceptive, or unfair:

(1) Submitting, processing, or assisting in the submission or processing of any allotment form or similar device used by the United States Armed Forces to direct a service member's pay to a third party for the purchase of life insurance or annuity, which acts include but are not limited to:

(a) Using or assisting in using a service member's “MyPay” account; or

(b) Using another similar internet or electronic medium for such purposes.

(2) Knowingly receiving funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship.

(3) Employing any device or method, or entering into any agreement whereby funds received from a service member by allotment for the payment of insurance premiums are identified on the service member's Leave and Earnings Statement or equivalent or successor form as Savings or Checking and where the service member has no formal banking relationship as defined in §A(2) of this regulation;

(4) Entering into any agreement with a depository institution for the purpose of receiving funds from a service member whereby the depository institution, with or without compensation, agrees to accept direct deposits from a service member with whom it has no formal banking relationship;

(5) Using DoD personnel, directly or indirectly, as a representative or agent in any official or unofficial capacity with or without compensation with respect to the solicitation or sale of life insurance or annuity to service members who are junior in rank or grade, or to the family members of such personnel;

(6) Offering or giving anything of value, directly or indirectly, to DoD personnel to procure their assistance in encouraging, assisting, or facilitating the solicitation or sale of life insurance or annuity to another service member;

(7) Knowingly offering or giving anything of value to a service member with a pay grade of E-4 or below for his or her attendance to any event where an application for life insurance or annuity is solicited; and

(8) Advising a service member with a pay grade of E-4 or below to change his or her income tax withholding or State of legal residence for the sole purpose of increasing disposable income to purchase life insurance or annuity.

B. Section A(1) of this regulation does not prohibit:

(1) Assisting a service member by providing insurer information; or

(2) Premium information necessary to complete any allotment form.

C. For purposes of §B(2) of this regulation, a formal banking relationship is established when the depository institution:

(1) Provides the service member a deposit agreement and periodic statements and makes the disclosures required by the Truth in Savings Act, 12 U.S.C. §4301 et seq. (2007), and the regulations promulgated under it; and

(2) Permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums.

D. Prohibited Practices—Source.

(1) The following acts or practices by an insurer or insurance producer regarding source, sponsorship, approval, or affiliation are prohibited as false, misleading, deceptive, or unfair:

(a) Making any representation, or using any device, title, descriptive name, or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer, or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned, or recommended by the U.S. Government, the United States Armed Forces, any state or federal agency, or government entity; and

(b) Soliciting the purchase of any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the United States Armed Forces in a manner that has the tendency or capacity to confuse or mislead a service member into believing that either the insurer, insurance producer, or insurance product is affiliated, connected or associated with, endorsed, sponsored, sanctioned, or recommended by the U.S. Government or the United States Armed Forces.

(2) Examples of prohibited insurance producer titles under §D(1)(a) of this regulation include, but are not limited to:

(a) Battalion Insurance Counselor;

(b) Unit Insurance Advisor;

(d) Veteran's Benefits Counselor.

(3) Nothing in this chapter may be construed to prohibit a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning, including:

(a) Chartered Life Underwriter (CLU);

(b) Chartered Financial Consultant (ChFC);

(d) Master of Science In Financial Services (MSFS); or

(e) Masters of Science Financial Planning (MS).

E. Prohibited Practices—Costs and Returns. The following acts or practices by an insurer or insurance producer regarding premiums, costs, or investment returns are prohibited as false, misleading, deceptive, or unfair:

(1) Using or describing the credited interest rate on a life insurance policy or annuity contract in a manner that implies that the credited interest rate is a net return on premium paid; and

(2) Misrepresenting the mortality costs of a life insurance product, including stating or implying that the product costs nothing or is free.

F. The following acts or practices by an insurer or insurance producer regarding SGLI or VGLI are false, misleading, deceptive, or unfair:

(1) Making any false, misleading, or deceptive representations regarding the availability, suitability, amount, cost, exclusions, or limitations to coverage provided to a service member or dependents by SGLI or VGLI;

(2) Making any false, misleading, or deceptive representations regarding conversion requirements, including the costs of coverage, exclusions, or limitations to coverage of SGLI or VGLI to private insurers; or

(3) Suggesting, recommending, or encouraging a service member to cancel or terminate his or her SGLI policy, or issuing a life insurance policy which replaces an existing SGLI policy unless the replacement will take effect upon or after the service member's separation from the United States Armed Forces.

G. The following acts or practices by an insurer or insurance producer regarding disclosure are prohibited as false, misleading, deceptive, or unfair:

(1) Deploying, using, or contracting for any lead generating materials designed exclusively for use with service members that do not clearly and conspicuously disclose that the recipient will be contacted by an insurance producer, if done for the purpose of soliciting the purchase of life insurance or annuity;

(2) Failing to disclose that a solicitation for the sale of life insurance or annuity will be made when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser;

(3) Failing to clearly and conspicuously disclose the fact that the product being sold is life insurance;

(4) Failing to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by §10 of the “Military Personnel Financial Services Protection Act,” Pub. L. No. 109-290, p.16; and

(5) When the sale is conducted in-person face-to-face with an individual known to be a service member, failing to provide the applicant at the time the application is taken:

(a) An explanation of any free look period with instructions on how to cancel if a policy is issued; and

(b) Either a copy of the application or a written disclosure, that:

(i) Shall clearly and concisely set out the type of life insurance, the death benefit applied for, and its expected first year cost; or

(ii) May be satisfied by a basic illustration that meets the requirements of COMAR 31.09.09 which shall be considered sufficient to meet this requirement for a written disclosure.

H. Definitions.

(1) In this section, the following terms have the meanings indicated.

(2) Terms Defined.

(a) “Insurable needs” are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant's estate and/or survivors or dependents.

(b) “Other military survivor benefits” include:

(i) The death gratuity;

(ii) Funeral reimbursement;

(iii) Transition assistance;

(iv) Survivor and dependents' educational assistance;

(v) Dependency and indemnity compensation;

(vi) TRICARE healthcare benefits;

(vii) Survivor housing benefits and allowances;

(viii) Federal income tax forgiveness; and

(ix) Social Security survivor benefits.

(3) The following acts or practices by an insurer or insurance producer with respect to the sale of certain life insurance products or annuities are false, misleading, deceptive, or unfair:

(a) Recommending the purchase of any life insurance product which includes a side fund to a service member in pay grades E-4 and below unless the insurer has reasonable grounds for believing that the life insurance death benefit, standing alone, is suitable;

(b) Offering for sale or selling a life insurance product which includes a side fund to a service member in pay grades E-4 and below who is currently enrolled in SGLI, unless, after the completion of a needs assessment, the insurer demonstrates that the applicant's SGLI death benefit, together with any other military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant's insurable needs for life insurance;

(i) Interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;

(ii) The applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product that satisfies the following requirements;

(iii) The effective rate of return will consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage;

(iv) The schedule is provided for at least each policy year from 1 to 10 and for every fifth policy year thereafter ending at age 100, policy maturity, or final expiration; and

(v) By default funds accumulated in the side fund are diverted and transferred to pay, reduce, or offset any premiums due;

(d) Offering for sale or selling any life insurance contract which after considering all policy benefits, including but not limited to endowment, return of premium or persistency, does not comply with standard nonforfeiture law for life insurance; and

(e) Selling any life insurance product to an individual known to be a service member that excludes coverage if the insured's death is related to war, declared or undeclared, or any act related to military service except for an accidental death coverage which may be excluded.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.08 Severability.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid for any reason, the invalidity does not affect the other provisions or any other application of these sections which can be given effect without the invalid provisions or application. To this end all provisions of this chapter are declared to be severable.

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.13.09 Effective Date.

This chapter is effective May 1, 2008, and shall apply to acts or practices committed on or after the effective date.

Attachments

31.09.13.06-form

History

Administrative History: Effective date: May 1, 2008 (35:3 Md. R. 290)
Authority: Insurance Article, §§27-101, et seq., Title 27; Annotated Code of Maryland

COMAR 31.09.14 Retained Asset Accounts [Repealed]

History

Administrative History: Effective date: February 8, 2010 (37:3 Md. R. 178)
Administrative History: Regulation .05 amended effective February 21, 2011 (38:4 Md. R. 264)
Administrative History: ——————
Administrative History: Chapter repealed effective November 14, 2011 (38:23 Md. R. 1423)

31.09.15 Universal Life Insurance

COMAR 31.09.15.01 Purpose.

The purpose of this chapter is to establish standards for universal life insurance policies in order to accommodate the development and issuance of universal life insurance.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.02 Scope.

This chapter applies to all individual universal life insurance policies, except variable universal life insurance policies.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.03 Definitions.

A. As used in this chapter, the following terms have the meanings indicted.

B. Terms Defined.

(1) “Cash surrender value” means the net cash surrender value plus any amounts outstanding as policy loans.

(2) “Commissioner” means the Maryland Insurance Commissioner.

(3) “Fixed premium universal life insurance policy” means a universal life insurance policy other than a flexible premium universal life insurance policy.

(4) “Flexible premium universal life insurance policy” means a universal life insurance policy which permits the policyowner to vary, independently of each other, the amount or timing of one or more premium payments or the amount of insurance.

(5) “Interest-indexed universal life insurance policy” or “interest-indexed policy” means any universal life insurance policy where the interest credits are linked to an external referent.

(6) “Net cash surrender value” means the maximum amount payable to the policyowner upon surrender.

(7) “Policy value” means the amount to which separately identified interest credits and mortality, expense, or other charges are made under a universal life insurance policy.

(8) “Universal life insurance policy” means a life insurance policy where separately identified:

(a) Interest credits, other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts are made to the policy;

(b) Mortality charges are made to the policy; and

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.04 General Calculation Method for Reserves.

A. The minimum valuation standard for universal life insurance policies shall be

(1) The Commissioner's Reserve Valuation Method, as described in §B of this regulation for such policies; and

(2) The mortality tables and interest rates specified in §B(2) of this regulation.

B. Commissioner's Reserve Valuation Method.

(1) The terminal reserve for the basic policy and any benefits or riders for which premiums are not paid separately as of any policy anniversary shall be equal to the net level premium reserves less (C) and less (D), where:

(a) Reserves by the net level premium method shall be equal to ((A) - (B)) r where:

(i) The quantity(a) is the present value of all future guaranteed benefits at the date of valuation;

(ii) The quantity (B) is the quantity (PVFB) (ä_x+t/ä_x);

(iii) PVFB is the present value of all benefits guaranteed at issue assuming future guaranteed maturity premiums are paid by the policyowner and taking into account all guarantees contained in the policy or declared by the insurer;

(iv) The quantities ä_x and ä_x+t are present values of an annuity of one per year payable on policy anniversaries beginning at ages x and x+t, respectively, and continuing until the highest attained age at which a premium may be paid under the policy;

(v) The letter x is the issue age;

(vi) The letter t is the duration of the policy; and

(vii) The letter r is equal to one unless the policy is a flexible premium policy and the policy value is less than the guaranteed maturity fund, in which case “r” is the ratio of the policy value to the guaranteed maturity fund;

(b) The guaranteed maturity premium for flexible premium universal life insurance policies shall be that level gross premium, paid at issue and periodically thereafter over the period during which premiums are allowed to be paid, which will mature the policy on the latest maturity date, if any, permitted under the policy, otherwise at the highest age in the valuation mortality table, for an amount which is in accordance with the policy structure;

(c) The guaranteed maturity premium is calculated at issue based on all policy guarantees at issue (excluding guarantees linked to an external referent);

(d) The guaranteed maturity premium for fixed premium universal life insurance policies shall be the premium defined in the policy which at issue provides the minimum policy guarantees;

(e) The guaranteed maturity fund at any duration is that amount which, together with future guaranteed maturity premiums, will mature the policy based on all policy guarantees at issue;

(f) The quantity (C) is ((a) - (b)) (ä_x+t /ä_x) r where (a) - (b) is the amount, if any, that the present value, at the date of valuation, of the guaranteed benefits under the policy exceeds the present value, at the date of valuation, of any future modified net premiums for the policy, as described in Insurance Article, §5-307(a)(2), Annotated Code of Maryland, for the plan of insurance defined at issue by the guaranteed maturity premiums and all guarantees contained in the policy or declared by the insurer;

(g) The quantity (D) is the sum of any additional quantities analogous to the quantity (C) which arise because of structural changes in the policy, with each such quantity being determined on a basis consistent with that of the quantity (C) using the maturity date in effect at the time of the change;

(h) The guaranteed maturity premium, the guaranteed maturity fund, and the quantity (B) described in §B(1)(a)(ii) of this regulation shall be recalculated to reflect any structural changes in the policy; and

(i) The recalculation described in §B(1)(h) of this regulation shall be done in a manner consistent with the descriptions found in §B(1)(a)-(g) of this regulation.

(2) Future guaranteed benefits are determined by:

(a) Projecting the greater of the guaranteed maturity fund and the policy value, taking into account future guaranteed maturity premiums, if any, and using all guarantees of interest, mortality, expense deductions, and other deductions, contained in the policy or declared by the insurer; and

(b) Taking into account any benefits guaranteed in the policy or by declaration which do not depend on the policy value.

(3) All present values shall be determined using:

(a) An interest rate, or rates, specified by Insurance Article, §5-306(c), Annotated Code of Maryland, for policies issued in the same year;

(b) The mortality rates specified by Insurance Article, §5-304(b)(3), Annotated Code of Maryland, for policies issued in the same year or the mortality rates contained in another table as may be approved by the Commissioner for this purpose; and

(c) Any other tables needed to value supplementary benefits provided by a rider which is being valued together with the policy.

Cross References

31.09.15.05B(1)

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.05 Alternative Minimum Reserves.

A. If, in any policy year, the guaranteed maturity premium on a universal life insurance policy is less than the valuation net premium for the same universal life insurance policy, calculated by the valuation method actually used in calculating the reserve on the universal life insurance policy, but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the universal life insurance policy shall be the greater of:

(1) The reserve calculated according to the method, the mortality table, and the rate of interest actually used; and

(2) The reserve calculated according to the method actually used but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the Guaranteed Maturity Premium in each policy year for which the valuation net premium exceeds the Guaranteed Maturity Premium.

B. Reserves.

(1) For universal life insurance reserves on a net level premium basis, the valuation net premium is PVFB/ä_x where PVFB is as described in Regulation .04B(1)(a)(iii) of this chapter and ä_x and ä_x+t are as described in Regulation .04B(1)(a)(iv) of this chapter.

(2) For reserves on the Commissioners Reserve Valuation Method, the valuation net premium is PVFB/ä_x + ((a) - (b))/ä_x where(a) - (b) is the amount, if any, that the present value, at the date of valuation, of the guaranteed benefits under the policy exceeds the present value, at the date of valuation, of any future modified net premiums for the policy, as described in Insurance Article, §5-307(a)(2), Annotated Code of Maryland.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.06 Nonforfeiture Values for Flexible Premium Universal Life Insurance Policies.

A. Minimum cash surrender values for flexible premium universal life insurance policies shall be determined separately for the basic policy and for any benefits and riders for which premiums are paid separately.

B. The requirements in this regulation pertain to a basic policy and any benefits and riders for which premiums are not paid separately.

C. The minimum cash surrender value, before adjustment for indebtedness and dividend credits, available on a date as of which interest is credited to the policy shall be equal to:

(1) The accumulation to that date of the premiums paid; minus

(2) The accumulations to that date of:

(a) The benefit charges;

(b) The averaged administrative expense charges for the first policy year and any insurance-increase years;

(d) Initial and additional acquisition expense charges not exceeding the initial or additional expense allowances, respectively;

(e) Any service charges actually made, excluding charges for cash surrender or election of a paid-up nonforfeiture benefit; and

(f) Any deductions made for partial withdrawals; minus

(3) Any unamortized unused initial and additional expense allowances.

D. All accumulations in §C(1) and (2) of this regulation shall be at the actual rate or rates of interest at which interest credits have been made unconditionally to the policy, or have been made conditionally, but for which the conditions have since been met.

E. Interest on the premiums and on all charges referred to in §C(1)-(2) of this regulation shall be accumulated from and to such dates as are consistent with the manner in which interest is credited in determining the policy value.

F. Benefit Changes.

(1) The benefit charges listed in §C(2)(a) of this regulation shall include the charges made for mortality and any charges made for riders or supplementary benefits for which premiums are not paid separately.

(2) If benefit charges are substantially level by duration and develop low or no cash values, then the Commissioner shall have the right to require higher cash values unless the insurer provides adequate justification that the cash values are appropriate in relation to the policy's other characteristics.

G. Calculation of Administrative Expense Charges.

(1) The administrative expense charges referenced in §C(2)(b) and (c) of this regulation shall include the following if provided for by the policy:

(a) Charges per premium payment;

(b) Charges per dollar of premium paid;

(d) Periodic per policy charges; and

(e) Any other charges permitted by the policy to be imposed without regard to the policyowner's request for services.

(2) The averaged administrative expense charges referenced in §C(2)(b) of this regulation for any year shall be those which would have been imposed in that year if the charge rate or rates for each transaction or period within the year had been equal to the arithmetic average of the corresponding charge rates that the policy states will be imposed in policy years 2 through 20 in determining the policy value.

H. Calculation of Initial Acquisition Expense Charges.

(1) The initial acquisition expense charges referenced in §C(2)(d) of this regulation shall be the excess of the expense charges, other than service charges, actually made in the first policy year over the averaged administrative expense charges for that year.

(2) Additional acquisition expense charges referenced in §C(2)(d) of this regulation shall be the excess of the expense charges, other than service charges, actually made in an insurance-increase year over the averaged administrative expense charges for that year.

(3) An insurance-increase year shall be the year beginning on the date of increase in the amount of insurance by policyowner request or by the terms of the policy.

(4) The service charges referenced in §H(1) and (2) of this regulation shall include charges permitted by the policy to be imposed as the result of a policyowner's request for a service by the insurer, such as the furnishing of future benefit illustrations, or of special transactions.

I. Calculation of Initial Expense Allowance.

(1) The initial expense allowance referenced in §C(3) of this regulation shall be the allowance provided by Insurance Article, §16-309(b), Annotated Code of Maryland, for a fixed premium, fixed benefit endowment policy with a face amount equal to the initial face amount of the flexible premium universal life insurance policy, with level premiums paid annually until the highest attained age at which a premium may be paid under the flexible premium universal life insurance policy, and maturing on the latest maturity date permitted under the policy, if any, otherwise at the highest age in the valuation mortality table.

(2) The unused initial expense allowance shall be the excess, if any, of the initial expense allowance over the initial acquisition expense charges as described in §H of this regulation.

(3) If the amount of insurance is subsequently increased upon request of the policyowner, or by the terms of the policy, an additional expense allowance and an unused additional expense allowance shall be determined on a basis consistent with §I(1) and (2) of this regulation and with Insurance Article, §16-309(e), Annotated Code of Maryland, using the face amount and the latest maturity date permitted at that time under the policy.

(4) Unamortized Unused Expense Allowance.

(a) The unamortized unused initial expense allowance during the policy year beginning on the policy anniversary at age x+t, where x is the same issue age, shall be the unused initial expense allowance multiplied by ä_x+t/ä_x where ä_x+t and ä_x are present values of an annuity of one per year payable on policy anniversaries beginning at ages x+t and x, respectively, and continuing until the highest attained age at which a premium may be paid under the policy, both on the mortality and interest bases guaranteed in the policy.

(b) An unamortized unused additional expense allowance shall be the unused additional expense allowance multiplied by a similar ratio of annuities, with äx replaced by an annuity beginning on the date as of which the additional expense allowance was determined.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.07 Nonforfeiture Values for Fixed Premium Universal Life Insurance Policies.

A. For fixed premium universal life insurance policies, the minimum cash surrender values shall be determined separately for the basic policy and any benefits and riders for which premiums are paid separately.

B. The requirements in this regulation pertain to a basic policy and to any benefits and riders for which premiums are not paid separately.

C. The minimum cash surrender value, before adjustment for indebtedness and dividend credits, available on a date as of which interest is credited to the policy shall be equal to [(A)-(B)-(C)-(D)], where:

(1) The quantity(a) is the present value of all future guaranteed benefits;

(2) The quantity (B) is the present value of future adjusted premiums;

(3) The quantity (C) is the present value of any quantities analogous to the nonforfeiture net level premium which arise because of guarantees declared by the insurer after the issue date of the policy; and

(4) The quantity (D) is the sum of any quantities analogous to (B), as described in §C(2) of this regulation, which arise because of structural changes in the policy.

D. The adjusted premiums described in §C(2) of this regulation are calculated as described in Insurance Article, §16-309(b)(2), Annotated Code of Maryland.

E. The nonforfeiture net level premium is equal to the quantity PVFB/ä_x where:

(1) PVFB is the present value of all benefits guaranteed at issue assuming future premiums are paid by the policyowner and all guarantees are contained in the policy or declared by the insurer; and

(2) The quantity ä_x is the present value of an annuity of one per year payable on policy anniversaries beginning at age x and continuing until the highest attained age at which a premium may be paid under the policy.

F. The quantity ä_x shall be replaced by an annuity beginning on the date as of which the declaration described in §C(3) of this regulation became effective and payable until the end of the period covered by the declaration.

G. Future guaranteed benefits are determined by:

(1) Projecting the policy value, taking into account future premiums, if any, using all guarantees of interest, mortality, or expense deductions, contained in the policy or declared by the insurer; and

(2) Taking into account any benefits guaranteed in the policy or by declaration which do not depend on the policy value.

H. All present values shall be determined using:

(1) An interest rate, or rates, specified by Insurance Article, §16-309(j), Annotated Code of Maryland, for policies issued in the same year; and

(2) The mortality rates specified by Insurance Article, §16-309(i)(3) and (5), Annotated Code of Maryland, for policies issued in the same year or contained in such other table as may be approved by the Commissioner for this purpose.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.08 Minimum Paid-Up Nonforfeiture Benefits.

A. If a universal life insurance policy provides for the optional election of a paid-up nonforfeiture benefit, it shall be such that its present value shall be at least equal to the cash surrender value provided for by the policy on the effective date of the election.

B. The present value in §A of this regulation shall be based on mortality and interest standards at least as favorable to the policyowner as:

(1) In the case of a flexible premium universal life insurance policy, the mortality and interest basis guaranteed in the policy for determining the policy value; or

(2) In the case of a fixed premium policy the mortality and interest standards permitted for paid-up nonforfeiture benefits by Insurance Article, §§16-306 and 16-309(i), Annotated Code of Maryland.

C. In lieu of the paid-up nonforfeiture benefit described in §§A and B of this regulation, the insurer may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits, or, if applicable, a greater amount or earlier payment of endowment benefits.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.09 Mandatory Policy Provisions.

A. In addition to the applicable provisions of Insurance Article, Title 16, Annotated Code of Maryland, each universal life insurance policy shall include the provisions described in §§B-H of this regulation.

B. Periodic Disclosure to Policyowner.

(1) The policy shall provide that the policyowner will be sent, without charge, at least annually, a report that satisfies the requirements of Regulation .11 of this chapter, which will serve to keep the policyowner advised as to the status of the policy.

(2) The end of the current report period shall be not more than 3 months before the date of the mailing of the report.

C. Policy Guarantees.

(1) The policy shall provide guarantees of minimum interest credits and maximum mortality and expense charges.

(2) All values and data shown in the policy shall be based on guarantees.

D. Calculation of Cash Surrender Values.

(1) The policy shall contain at least a general description of the calculation of cash surrender values including the following information:

(a) The guaranteed maximum expense charges and loads;

(b) Any limitation on the crediting of additional interest;

(d) The guaranteed maximum mortality charges;

(e) Any other guaranteed charges; and

(f) Any surrender or partial withdrawal charges.

(2) The interest credits in §D(1)(b) of this regulation may not remain conditional for a period longer than 24 months.

E. Changes in Basic Coverage.

(1) If the policyowner has the right to change the basic coverage, any limitation on the amount or timing of the change of basic coverage shall be stated in the policy.

(2) If the policyowner has the right to increase the basic coverage, the policy shall state whether a new period of contestability or suicide, or both, is applicable to the additional coverage.

F. Grace Period and Lapse.

(1) The policy shall provide for written notice to be sent to the policyowner's last known address at least 30 days before termination of coverage.

(2) Flexible Premium Policies.

(a) A flexible premium policy shall provide for a grace period of at least 30 days after lapse.

(b) Unless otherwise defined in the policy, lapse shall occur on the date on which the net cash surrender value first equals zero.

G. Misstatement of Age or Sex.

(1) Except as stated in §G(2) of this regulation, if there is a misstatement of age or sex in the policy, the amount of the death benefit shall be that which would be purchased by the most recent mortality charge at the correct age or sex.

(2) The commissioner may approve other methods of adjustment than those described in §G(1) of this regulation for misstatement of age which are deemed satisfactory.

H. Maturity Date. If a policy provides for a maturity date, end date, or date after which the policy will no longer be in force, then the policy shall also contain a statement, in close proximity to that date, that it is possible that coverage may not continue to the maturity date even if scheduled premiums are paid in a timely manner, if such is the case.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.10 Disclosure Requirements.

Disclosure of information about the policy being applied for shall follow the standards in COMAR 31.09.09.

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.11 Periodic Disclosure to Policyowner.

A. Annual Report.

(1) The policy shall provide that the policyowner will be sent, without charge, at least annually, a report which will serve to keep the policyowner advised of the status of the policy.

(2) The end of the current report period shall be not more than 3 months before the date of the mailing of the report.

B. The annual report required by §A of this regulation shall include the following:

(1) The beginning and end of the current report period;

(2) The policy value at the end of the previous report period and at the end of the current report period;

(3) The total amounts which have been credited or debited to the policy value during the current report period, identifying each by type, such as interest, mortality, expense, and riders;

(4) The current death benefit at the end of the current report period on each life covered by the policy;

(5) The net cash surrender value of the policy as of the end of the current report period;

(6) The amount of outstanding loans, if any, as of the end of the current report period;

(7) Notice that the policyholder may request an illustration of current and future benefits and values;

(8) For fixed premium policies:

(a) How long the policy will continue in effect, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments; and

(b) If, assuming guaranteed interest, mortality, and expense loads and continued scheduled premium payments, the policy's net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect; and

(9) For flexible premium policies:

(a) How long the policy will continue in effect, assuming guaranteed interest, mortality and expense loads, and no further premium payments; and

(b) If, assuming guaranteed interest, mortality and expense loads, the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect.

Cross References

31.09.15.09B(1)

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.12 Interest-Indexed Universal Life Insurance Policies.

A. Initial Filing Requirements.

(1) The following information shall be submitted in connection with any filing of interest-indexed universal life insurance policies:

(a) A description of how the interest credits are determined, including:

(i) A description of the index;

(ii) The relationship between the value of the index and the actual interest rate to be credited;

(iii) The frequency and timing of determining the interest rate; and

(iv) The allocation of interest credits, if more than one rate of interest applies to different portions of the policy value;

(b) The insurer's investment policy, which includes a description of the following:

(i) How the insurer addressed the reinvestment risks;

(ii) How the insurer plans to address the risk of capital loss on cash outflows;

(iii) How the insurer plans to address the risk that appropriate investments may not be available or not available in sufficient quantities;

(iv) How the insurer plans to address the risk that the indexed interest rate may fall below the minimum contractual interest rate guaranteed in the policy;

(v) The amount and type of assets currently held for interest indexed policies; and

(vi) The amount and type of assets expected to be acquired in the future;

(c) If policies are linked to an index for a specified period less than to the maturity date of the policy, a description of the method used, or currently contemplated, to determine interest credits upon the expiration of the period;

(d) A description of any interest guarantee in addition to or in place of the index; and

(e) A description of any maximum premium limitations and the conditions under which they apply.

(2) All information received under this regulation shall be treated confidentially to the extent permitted by law.

B. Additional Filing Requirements.

(1) Annually, each insurer shall submit a Statement of Actuarial Opinion by the insurer's actuary similar to the example contained in Regulation .13 of this chapter.

(2) Annually, each insurer shall submit a description of the amount and type of assets currently held by the insurer with respect to its interest-indexed policies.

(3) Change in Investment Strategy.

(a) Before implementation, each domestic insurer shall submit a description of any material change in the insurer's investment strategy or method of determining the interest credits.

(b) A change in investment strategy is considered to be material if it would affect the form or definition of the index, such as any change in the information supplied in §A(1) of this regulation, or if it would significantly change the amount or type of assets held for interest-indexed policies.

Cross References

31.09.15.13

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

COMAR 31.09.15.13 Sample Statement of Actuarial Opinion.

The following form is a sample form that may be used for providing the statement of actuarial opinion as described in Regulation .12 of this chapter:

"Statement of Actuarial Opinion for Interest-Indexed Universal Life Insurance Policies

I, {insert name of actuary}, am {insert position or relationship to Insurer} for the XYZ Life Insurance Company (The Insurer) in the state of {Insert State of Domicile of Insurer}.

I am a member of the American Academy of Actuaries (or if not, state other qualifications to sign annual statement actuarial opinions).

I have examined the interest-indexed universal life insurance policies of the Insurer in force as of December 31, 20XX, encompassing _______ number of policies and $__________ of insurance in force.

I have considered the provisions of the policies. I have considered any reinsurance agreements pertaining to such policies, the characteristics of the identified assets, and the investment policy adopted by the Insurer as they affect future insurance and investment cash flows under such policies and related assets. My examination included such tests and calculations as I considered necessary to form an opinion concerning the insurance and investment cash flows arising from the policies and related assets.

I relied on the investment policy of the Insurer and on projected investment cash flows as provided by __________________________, Chief Investment Officer of the Insurer.

The tests were conducted under various assumptions as to future interest rates, and particular attention was given to those provisions and characteristics that might cause future insurance and investment cash flows to vary with changes in the level of prevailing interest rates.

In my opinion, the anticipated insurance and investment cash flows referred to above make good and sufficient provision for the contractual obligations of the Insurer under these insurance policies.

Signature of Actuary"

Cross References

31.09.15.12B(1)

History

Administrative History: Effective date: September 6, 2010 (37:18 Md. R. 1215)
Authority: Insurance Article, §§2-109, 5-312, 12-205(b)(4) and (8), 16-310(c), and 27-208(a), Annotated Code of Maryland

31.09.16 Accelerated Benefits

COMAR 31.09.16.01 Purpose.

The purpose of this chapter is to regulate accelerated benefit provisions in individual and group life insurance policies and to provide required standards of disclosure.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.02 Scope.

This chapter shall apply to all accelerated benefit provisions of individual and group life insurance policies issued or delivered in Maryland except those subject to Insurance Article, Title 18, Annotated Code of Maryland.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.03 Definitions.

A. In this chapter, the following terms have the meanings indicted.

B. Terms Defined.

(1) “Accelerated benefits” means benefits payable under a life insurance contract that:

(a) Are payable during the lifetime of the insured in anticipation of death or upon the occurrence of specified life-threatening or catastrophic conditions as defined by the policy or rider, to a policy owner or certificate holder;

(b) Reduce the death benefit otherwise payable under the life insurance contract; and

(c) Are payable upon the occurrence of a single qualifying event that results in the payment of a benefit amount fixed at the time of acceleration.

(2) “Activities of daily living” has the meaning stated in COMAR 31.14.01.02B.

(3) “Chronic illness” means:

(a) The permanent inability to perform, without substantial assistance from another individual, a specified number of activities of daily living; or

(b) Permanent severe cognitive impairment and similar forms of dementia requiring substantial supervision of the insured.

(4) “Qualifying event” means one or more of the following:

(a) A medical condition that would result in a drastically limited life span as specified in the contract;

(b) A medical condition that requires extraordinary medical intervention without which the insured would die;

(c) A medical condition that usually requires continuous confinement in an eligible institution as defined in the contract if the insured is expected to remain there for the rest of the insured’s life;

(d) A medical condition that would, in the absence of extensive or extraordinary medical treatment, result in a drastically limited life span;

(e) A chronic illness; or

(f) Any other qualifying event that the Commissioner may approve.

(5) “Terminal illness” means a medical condition that is reasonably expected to result in a drastically limited life span for the insured as specified in the contract.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.04 Type of Product.

A. Accelerated benefit riders and life insurance policies with accelerated benefit provisions are primarily mortality risks rather than morbidity risks.

B. The inclusion of terminal illness as a qualifying event shall be included in all accelerated benefit policies and riders.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.05 Assignee or Irrevocable Beneficiary.

Prior to the payment of the accelerated benefit, the insurer shall obtain from an assignee or irrevocable beneficiary a signed acknowledgement of concurrence for payout. If the insurer is the assignee under the policy, no acknowledgement is required.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.06 Criteria for Payment.

A. Lump Sum Settlement Option.

(1) The insurer shall include the option to take the benefit as a lump sum in the contract payment options.

(2) The benefit may not be made available as an annuity contingent upon the life of the insured.

B. No restrictions are permitted on the use of the proceeds.

C. If any death benefit remains after payment of an accelerated benefit, the accidental death benefit provision, if any, in the policy or rider may not be affected by the payment of the accelerated benefit.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.07 Disclosures.

A. Descriptive Title.

(1) The insurer shall include the term “accelerated benefit” in the policy or rider’s title.

(2) An accelerated benefit product being offered under this chapter may not be described or marketed as long-term care insurance or as providing long-term care benefits.

B. Disclosure of Tax Consequences.

(1) A written disclosure stating that receipt of the accelerated benefits may be taxable and assistance should be sought from a personal tax advisor shall be provided by the insurer at the time of application for the policy or rider, and at the time the accelerated benefit payment request is submitted.

(2) The disclosure statement issued by the insurer required by §B(1) of this regulation shall be prominently displayed on the first page of the policy or rider and on the first page of any other related documents.

C. Solicitations.

(1) A written disclosure including, but not limited to, a brief description of the accelerated benefit and definitions of the conditions or occurrences triggering payment of the benefits shall be given to the applicant as follows:

(a) The description shall include an explanation of any effect the payment of a benefit would have on the policy’s cash value, accumulation account, death benefit, premium, policy loans, and policy liens;

(b) For agent solicited insurance, the agent shall provide the disclosure form to the applicant as follows:

(i) This form shall be provided by the agent prior to or concurrently with the application; and

(ii) The acknowledgment of the disclosure form shall be signed by the applicant and writing agent;

(c) For solicitations by direct response, the insurer shall provide the disclosure form to the applicant at the time the policy is delivered, with a notice that a full premium refund shall be received if the policy is returned to the insurer within the free look period; and

(d) For group insurance, the disclosure form shall be contained as part of the certificate of coverage or any other related document furnished by the insurer for the certificate holder.

(2) If there is a premium or cost of insurance charge, the insurer shall give the applicant a generic illustration numerically demonstrating any effect of the payment of a benefit on the policy’s cash value, accumulation account, death benefit, premium, policy loans and policy liens as follows:

(a) For agent solicited insurance, the agent shall provide the illustration to the applicant prior to or concurrently with the application; or

(b) For solicitations by direct response, the insurer shall provide the illustration to the applicant at the time the policy is delivered.

(3) Disclosure of Premium Charge.

(a) The insurer with financing options other than as described in Regulation .11A(2) and (3) of this chapter shall disclose to the policy owner any premium or cost of insurance charge for the accelerated benefit. The insurer shall make a reasonable effort to assure that the certificate holder is aware of any additional premium or cost of insurance charge if the certificate holder is required to pay a charge.

(b) The insurer shall furnish an actuarial demonstration to the Commissioner when filing the product which discloses the method the insurer used to arrive at the cost for the accelerated benefit.

(4) Disclosure of Administrative Expense Charge.

(a) The insurer shall disclose to the policy owner any administrative expense charge provided in the policy. The administrative expense charge shall be disclosed in the written disclosure required by §C(1) of this regulation and in the statement required by §D(1) of this regulation.

(b) The insurer shall make a reasonable effort to assure that the certificate holder is aware of any administrative expense charge if the certificate holder is required to pay this charge.

D. Effect of the Benefit Payment.

(1) When a policy owner or certificate holder requests an acceleration, the insurer shall send a statement to the policy owner or certificate holder and irrevocable beneficiary that:

(a) Illustrates any effect that the payment of the accelerated benefit will have on the policy’s cash value, accumulation account, death benefit, premium, policy loans, and policy liens;

(b) Discloses that receipt of accelerated benefit payments may adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements; and

(c) Discloses that receipt of an accelerated benefit payment may be taxable and assistance should be sought from a personal tax advisor.

(2) When a previous disclosure statement becomes invalid as a result of an acceleration of the death benefit, the insurer shall send a revised disclosure statement to the policy owner or certificate holder and irrevocable beneficiary.

(3) When the insurer agrees to accelerate death benefits, the insurer shall issue an amended schedule page to the policy holder or notify the certificate holder under a group policy to reflect any new, reduced in-force face amount of the contract.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.08 Effective Date of the Accelerated Benefits.

A. The accelerated benefit provision shall be effective for accidents on the effective date of the policy or rider.

B. The accelerated benefit provision shall be effective for illness no more than 30 days following the effective date of the policy or rider.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.09 Waiver of Premiums.

A. The insurer may offer a waiver of premium for the accelerated benefit provision in the absence of a waiver of premium provision for the policy being in effect.

B. At the time the benefit is claimed, the insurer shall explain to the policy holder or certificate holder any continuing premium requirements to keep the policy in force.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.10 Discrimination.

An insurer may not:

A. Unfairly discriminate among insureds with differing qualifying events covered under the policy or among insureds with similar qualifying events covered under the policy;

B. Apply further conditions on the payment of the accelerated benefits other than those conditions specified in the policy or rider.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.11 Actuarial Standards.

A. Financing Options.

(1) The insurer may require a premium charge or cost of insurance charge for the accelerated benefit as follows:

(a) The insurer shall base the charge on sound actuarial principles; and

(b) For group insurance, the insurer may reflect the additional cost in experience rating.

(2) The insurer may pay a present value of the face amount as follows:

(a) The present value calculation shall be based on any applicable actuarial discount appropriate to the policy design;

(b) The interest rate or interest rate methodology used in the calculation shall be based on sound actuarial principles;

(c) The insurer shall disclose the interest rate or interest rate methodology in the contract or actuarial memorandum; and

(d) The maximum interest rate used shall be no more than the greater of:

(i) The current yield on 90-day Treasury bills; or

(ii) The current maximum adjustable policy loan interest rate as set forth in accordance with Insurance Article, §16-208, Annotated Code of Maryland.

(3) The insurer may accrue an interest charge on the amount of the accelerated benefits as follows:

(a) The interest rate or interest rate methodology used in the calculation shall be based on sound actuarial principles;

(b) The insurer shall disclose the interest rate or interest rate methodology in the contract or actuarial memorandum;

(i) The current yield on 90-day Treasury bills; or

(ii) The current maximum adjustable policy loan interest rate as set forth in accordance with Insurance Article, §16-208, Annotated Code of Maryland; and

(d) The interest rate accrued on the portion of the lien that is equal in amount to the cash value of the contract at the time of the benefit acceleration shall be no more than the policy loan interest rate stated in the contract.

B. Effect on Cash Value.

(1) Except as provided in §B(2) of this regulation, when an accelerated benefit is payable, there may be no more than a pro rata reduction in the cash value based on the percentage of death benefits accelerated to produce the accelerated benefit payment; or

(2) The payment of accelerated benefits, any administrative expense charges, any future premiums and any accrued interest may be considered a lien against the death benefit of the policy or rider and the access to the cash value may be:

(a) Restricted to any excess of the cash value over the sum of any other outstanding loans and the lien; and

(b) Future access to additional policy loans may be limited to any excess of the cash value over the sum of the lien and any other outstanding policy loans.

C. Effect of Any Outstanding Policy Loans on Accelerated Death Benefit Payment. When payment of an accelerated benefit results in a pro rata reduction in the cash value, the payment may not be applied toward repaying an amount greater than a pro rata portion of any outstanding policy loans.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

COMAR 31.09.16.12 Actuarial Disclosure and Reserves.

A. Actuarial Memorandum.

(1) A qualified actuary shall describe the accelerated benefits, the risks, the expected costs, and the calculation of statutory reserves in an actuarial memorandum accompanying each filing.

(2) The insurer shall maintain in its files descriptions of the bases and procedures used to calculate benefits payable under this chapter. The descriptions shall be made available for examination by the Commissioner upon request.

B. Reserves.

(1) When benefits are provided through the acceleration of benefits under a group or individual life policy or a rider to such policies, an actuary shall determine policy reserves in accordance with the Standard Valuation Law referenced in Insurance Article, §§5-301—5-317, Annotated Code of Maryland.

(2) A member in good standing of the American Academy of Actuaries shall determine all valuation assumptions used in constructing the reserves as appropriate for statutory valuation purposes.

(3) Mortality tables and interest currently recognized for life insurance reserves by the National Association of Insurance Commissioners may be used by the actuary as appropriate assumptions for other provisions incorporated in the policy form.

(4) The actuary shall follow both actuarial standards and certification for good and sufficient reserves.

(5) Reserves in the aggregate shall be sufficient to cover:

(a) Policies upon which no claim has yet arisen; and

(b) Policies upon which an accelerated claim has arisen.

(6) The actuary is not required to establish additional reserves for policies and certificates that provide actuarially equivalent benefits.

(7) The insurer shall include policy liens and policy loans, including accrued interest, as assets of the company for reporting purposes as stated in Insurance Article, §5-101(3)—(7), Annotated Code of Maryland.

(8) For a policy on which the policy lien exceeds the policy’s statutory reserve liability, the insurer shall hold the excess as a non-admitted asset.

History

Administrative History: Effective date: December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109, 5-301, 12-205(b)(4) and (8), and 27-202, Annotated Code of Maryland

31.10 HEALTH INSURANCE — GENERAL

31.10.01 Health Insurance

COMAR 31.10.01.01 Applicability.

Every health insurance policy issued under Insurance Article, Title 15, Annotated Code of Maryland, as amended to date, shall comply with this chapter (except that Regulation .03D and J of this chapter are not applicable to policies issued under Insurance Article, Title 13, Subtitle 3), as well as with any other regulations promulgated under Insurance Article, §12-203, concerning the submission of forms. As used in these regulations, the word “forms” includes applications, policies, certificates, contracts, riders, and endorsements except when the context indicates otherwise.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:13 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.44 to COMAR 31.10.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 17, 2012 (39:18 Md. R. 1198)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03S amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109, 12-203, 12-205, 13-110(a), 13-111(b), 14-109(3)(iv), 14-126(a)(1), 14-405(b)(9),14-410(c), 15-903, 15-904, 15-906 — 15-908, and 15-911,; Annotated Code of Maryland

COMAR 31.10.01.02 Definition.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means a person that is:

(a) An insurer; or

(b) A nonprofit health service plan.

(2) “Health benefit plan” has the meaning stated in Insurance Article, §15-1301, Annotated Code of Maryland.

(3) “Individual health benefit plan” means a health benefit plan issued by a carrier to a policyholder to cover:

(a) The policyholder;

(b) The policyholder's dependents; or

(4) “Mail” means first class mail or compliance with the Uniform Electronics Transactions Act, Commercial Law Article, Title 21, Annotated Code of Maryland.

(5) “Policyholder” means the person to whom the carrier’s contract is issued.

Cross References

31.04.21.01A(3)

31.10.06.08B(13)(b)

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:13 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.44 to COMAR 31.10.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 17, 2012 (39:18 Md. R. 1198)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03S amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109, 12-203, 12-205, 13-110(a), 13-111(b), 14-109(3)(iv), 14-126(a)(1), 14-405(b)(9),14-410(c), 15-903, 15-904, 15-906 — 15-908, and 15-911,; Annotated Code of Maryland

COMAR 31.10.01.03 Filing of Health Insurance Forms for Approval.

A. The filing of a form shall be accompanied by the filing of premium rates for it. Subsequent changes in premium rates shall be filed with supporting data at least 90 days before the date any change in the rate is proposed to become effective.

A-1. A carrier submitting forms for approval, or premiums for forms pending approval or previously approved, shall print or type in a conspicuous manner immediately below the name of the carrier on the letter of transmittal the carrier’s National Association of Insurance Commissioners (NAIC) company code number.

B. Any name or title of a policy should be printed in a size of type smaller than that used for the name of the carrier.

C. Reference to a standard of time shall specify time at the place the insured resides, or at the place the accident or illness occurs, or at the place the policy is delivered.

D. A form will not be approved for issuance at any age which does not provide a reasonable period of full coverage before the age at which benefits terminate or are substantially reduced.

E. If a rider or endorsement reduces or eliminates coverage of a policy, signed acceptance by the policyowner at the time of or before delivery of the policy is required.

F. Any form which by its terms provides that only one of several benefits will be payable as a result of any one accident or sickness shall state that the largest of the benefits will be payable.

G. If the claimant has the right to elect alternative benefits, the time allowed for the election shall be not less than 90 days from the date of the accident or commencement of the loss.

H. If payment of benefits is related to the first visit of a physician or the date of the first medical attendance, this stipulation shall appear in the benefit provision to which it applies.

I. Payment of benefits may be limited in duration to the time the insured is under the care of a physician, but may not be conditioned upon any specified frequency of visits or attendance by the physician.

J. Except in the case of group health insurance, if any policy provision terminates upon entry of the insured into military service, or if the policy excludes any coverage while the insured is in military service, the policy shall provide for a refund upon request of the policyowner of pro rata unearned premium for any period during which the insured is not covered. However, if coverage is excluded only for loss resulting from military service while in military service, a refund is not required. In policies of noncancellable or guaranteed renewable health insurance, when the coverage is automatically reinstated upon discharge from military service or within a stated period not exceeding 6 months after discharge, a refund is not required.

K. In lieu of the definitions contained in §§L, M, and N of this regulation, the policy may contain a definition which, in the opinion of the Commissioner, is not less favorable to the policyholder.

L. During at least the first 12 months, or the first 52 weeks, of disability, total disability for which benefits may become due and payable shall be defined as “inability by reason of injury or sickness to perform each and every duty pertaining to the insured's occupation”. After the first 12 months, or the first 52 weeks, of disability, total disability may be defined as “inability to perform each and every duty of any business or occupation for which the insured is reasonably fitted by education, training and experience”.

M. Partial disability shall be defined as “inability to perform one or more, but not all, of the important daily duties of the insured's occupation”.

N. If a form provides coverage due to the wrecking or disablement of, or material damage to, an automobile, elevator, or other conveyance in which the insured is a passenger at the time of the accident, the wrecking, disablement, or material damage shall be defined substantially as damage which necessitates repair in order to place the conveyance in as good a condition as it was before the accident.

O. An exception excluding liability for chronic or organic disease will not be permitted. Any disease to be excluded from coverage shall be stated with sufficient clarity so as to be readily identifiable.

P. A provision may not contain the words “reimburse” or “reimbursement” or the phrase “amount actually expended”. A benefit may not be conditioned on the payment by the claimant of expenses for which the policy provides a benefit.

Q. A form may not contain the phrase “strict compliance” or words of similar import.

R. Except in the case of a health benefit plan, in any policy form in which the carrier has the right to change premium rates, the policy shall provide that notice of any increase in rates shall be given to the policyholder by mail at least 40 days before the expiration of the grace period applicable to the first increased premium.

S. In any individual health benefit plan in which the carrier has the right to change premium rates, the health benefit plan shall provide that notice of any increase in premium rates shall be given to the policyholder by mail at least 45 days before the change in premium rates is proposed to become effective.

T. A noncancellable or guaranteed renewable family health insurance policy which covers the spouse of the insured shall provide that, in the event of the death of the insured applicant, the spouse will become the successor insured.

History

Administrative History: Effective date: June 1, 1965
Administrative History: Amended effective May 1, 1968
Administrative History: Regulation .02A-1 adopted effective July 19, 1993 (20:13 Md. R. 1169)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.44 to COMAR 31.10.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 17, 2012 (39:18 Md. R. 1198)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03S amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109, 12-203, 12-205, 13-110(a), 13-111(b), 14-109(3)(iv), 14-126(a)(1), 14-405(b)(9),14-410(c), 15-903, 15-904, 15-906 — 15-908, and 15-911,; Annotated Code of Maryland

31.10.02 Health Insurance — Simplified Language

COMAR 31.10.02.01 Applicability.

A. This chapter does not apply to:

(1) Group health insurance policies initially issued to employer/employee groups of more than 1,000 employees;

(2) Group health insurance policies issued pursuant to a collective bargaining labor-management agreement; or

(3) Reinsurance contracts.

B. Except as provided in §A of this regulation, this chapter applies to all health insurance policies, including riders, endorsements, and certificates, issued or delivered in this State by any insurer or nonprofit health service plan.

C. The Insurance Commissioner may except other policies from the requirements of this chapter if the Commissioner determines that an exception is warranted by the nature of the particular policy form or if the policy language is drafted to conform to requirements of any other applicable law or regulation.

History

Administrative History: Effective date: March 30, 1992 (19:6 Md. R. 672)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.36 to COMAR 31.10.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-102—12-104, 12-107, 12-203—12-205, 12-209, 15-103, 15-201, 15-202, 15-402, 15-502, 15-916, 15-919, and 15-924, Annotated Code of Maryland

COMAR 31.10.02.02 Minimum Standards.

A. In addition to any other requirements or law, a policy form to which this chapter is applicable may not be issued or delivered in this State unless:

(1) The text achieves a minimum score of 40 on the Flesch Reading Ease Test;

(2) The policy contains a table of contents or an index of the principal sections of the policy if it has more than 3,000 words or more than three pages regardless of the number of words;

(3) The style, arrangement, and overall appearance of the policy do not give undue prominence to any portion of the text or to any endorsements or riders; and

(4) Except for specification pages, schedules, tables, and tables of contents, if any, the policy is plainly printed in a style in general use and the size is uniform and not less than 10-point type, 1-point leaded, with a lower case alphabet length not less than 120 point.

B. If any provision of Insurance Article, Annotated Code of Maryland, requires that any particular section of a policy or any particular type of policy be printed in larger type style or with greater prominence, then the provisions of the Insurance Article prevail over the requirements of these regulations.

Cross References

31.10.02.05B

History

Administrative History: Effective date: March 30, 1992 (19:6 Md. R. 672)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.36 to COMAR 31.10.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-102—12-104, 12-107, 12-203—12-205, 12-209, 15-103, 15-201, 15-202, 15-402, 15-502, 15-916, 15-919, and 15-924, Annotated Code of Maryland

COMAR 31.10.02.03 Flesch Reading Ease Test Scores.

A. The Flesch Reading Ease Test scores shall be calculated according to the requirements of §§B—F of this regulation.

B. For policy forms containing 10,000 words or less of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.

C. The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of 1.015.

D. The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6.

E. The sum of the figures computed in §§C and D of this regulation, subtracted from 206.835, equals the Flesch Reading Ease Test Score for the policy form.

F. For purposes of §§C—E of this regulation, the following procedures shall be used:

(1) A contraction, hyphenated word, or number or letter separated by spaces is counted as one word;

(2) A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, is counted as one sentence; and

(3) A syllable means a unit of spoken language consisting of one or more letters of a word as divided by a commonly accepted dictionary, although when the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.

G. The Flesch Reading Ease Test shall be applied to all printed matter in the policy, except for:

(1) The name and address of the insurer, policy number, name or title of policy, table of contents or index, specification pages, schedules, tables, captions, and subcaptions; and

(2) Medical terminology, language which is drafted to conform to the requirements of any applicable law or regulation, language required by a collective bargaining labor-management agreement, or terms defined in the policy.

H. At the option of the insurer, riders, endorsements, and other forms which are attached to and made a part of the policy may be scored separately or as part of the policy with which they are to be used.

Cross References

31.10.02.04

History

Administrative History: Effective date: March 30, 1992 (19:6 Md. R. 672)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.36 to COMAR 31.10.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-102—12-104, 12-107, 12-203—12-205, 12-209, 15-103, 15-201, 15-202, 15-402, 15-502, 15-916, 15-919, and 15-924, Annotated Code of Maryland

COMAR 31.10.02.04 Certification.

A policy form to which these regulations apply, and which is required to be submitted for approval in accordance with Insurance Article, §§12-203 and 12-205, Annotated Code of Maryland, shall be accompanied by a certificate signed by an officer of the insurer stating that the language of the form has been measured by the Flesch Reading Ease Test, and giving the resulting score achieved on that test. If any language has been omitted from the test in accordance with Regulation .03G(2) of this chapter, the certificate shall so specify.

History

Administrative History: Effective date: March 30, 1992 (19:6 Md. R. 672)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.36 to COMAR 31.10.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-102—12-104, 12-107, 12-203—12-205, 12-209, 15-103, 15-201, 15-202, 15-402, 15-502, 15-916, 15-919, and 15-924, Annotated Code of Maryland

COMAR 31.10.02.05 Effective Date.

A. These regulations apply to all health insurance policies, certificates, riders, and endorsements submitted for approval on or after January 1, 1992.

B. If any policy form, certificate, rider, or endorsement which does not comply with the minimum standards of Regulation .02 of this chapter has been submitted for approval before January 1, 1992, and approved by the Commissioner, it may be issued or delivered in this State until January 1, 1997, but not after that unless it has been submitted or resubmitted in accordance with the requirements of these regulations. A policy form, certificate, rider, or endorsement submitted before January 1, 1992, which complies with the minimum standards of Regulation .02 of this chapter need not be resubmitted.

History

Administrative History: Effective date: March 30, 1992 (19:6 Md. R. 672)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.36 to COMAR 31.10.02 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-102—12-104, 12-107, 12-203—12-205, 12-209, 15-103, 15-201, 15-202, 15-402, 15-502, 15-916, 15-919, and 15-924, Annotated Code of Maryland

COMAR 31.10.03 Health Insurance — Stop-Loss Coverage [Repealed]

History

Administrative History: Effective date: September 25, 1995 (22:19 Md. R. 1473)
Administrative History: Regulation .02B, .03B, and .05 amended as an emergency provision effective December 23, 1995 (23:2 Md. R. 92); emergency status expired April 1, 1996
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.02 to COMAR 31.10.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter repealed effective January 16, 2006 (33:1 Md. R. 40)

31.10.04 Health Insurance — Plan of Withdrawal

COMAR 31.10.04.01 Scope.

A. This chapter applies to all insurers writing health insurance in this State.

B. This chapter does not apply to health benefit plans issued under Insurance Article, Title 15, Subtitles 12, 13, or 14, Annotated Code of Maryland.

History

Administrative History: Effective date: October 9, 1995 (22:20 Md. R. 1543)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.10 to COMAR 31.10.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109 and 27-606, Annotated Code of Maryland

COMAR 31.10.04.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Health benefit plan” has the meaning stated in Insurance Article, §31-101, Annotated Code of Maryland.

(2) “Health insurance product” means any:

(a) Group or individual health insurance policy or contract which covers a Maryland resident;

(b) Individual health insurance contract issued to a Maryland resident; or

(3) “Single case basis” means a contract which was approved by the Maryland Insurance Administration for issuance to only one contract holder in Maryland.

History

Administrative History: Effective date: October 9, 1995 (22:20 Md. R. 1543)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.10 to COMAR 31.10.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109 and 27-606, Annotated Code of Maryland

COMAR 31.10.04.03 Required Filings.

A. When an insurer intends to cancel or not renew a health insurance product for all of the insurer's covered insureds in the State, the insurer shall file a plan of withdrawal with the Commissioner at least 90 days from the date of the proposed cancellation or nonrenewal.

B. When an insurer intends to cancel or not renew all of the insurer's health insurance products for all of its covered insureds in the State, the insurer shall file a plan of withdrawal with the Commissioner at least 180 days before the date of the proposed withdrawal.

C. A plan of withdrawal may not be required for nonrenewal of a contract which was approved for issuance on a single case basis.

History

Administrative History: Effective date: October 9, 1995 (22:20 Md. R. 1543)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.10 to COMAR 31.10.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01B amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .02B amended effective May 9, 2016 (43:9 Md. R. 532)
Authority: Insurance Article, §§2-109 and 27-606, Annotated Code of Maryland

31.10.05 Minimum Standards for Medicare Supplement Policies

COMAR 31.10.05.01 Purpose.

The purpose of this chapter is to provide for the reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement policies, to facilitate public understanding and comparison of these policies, to eliminate policy provisions which may be misleading or confusing in connection with the purchase of the policies or with the settlement of claims, and to provide for full disclosures in the sale of health insurance coverages to persons eligible for Medicare by reason of age.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.02 Authority.

This chapter is issued pursuant to the authority given the Insurance Commissioner under Insurance Article, §2-109 and TItle 15, Subtitle 9, and Health-General Article, §§19-705 and 19-706, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.03 Applicability and Scope.

Except as otherwise specifically provided, this chapter applies to all:

A. Medicare supplement policies and subscriber contracts delivered or issued for delivery in this State before July 1, 1992; and

B. Certificates issued under group Medicare supplement policies or subscriber contracts if the certificates were delivered or issued for delivery in this State before July 1, 1992.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.04 Definitions.

A. Whenever used in this chapter or in a Medicare supplement policy subject to these regulations, or in any advertisement soliciting a Medicare supplement policy, the following terms shall have the meanings indicated.

B. Terms Defined.

(1) “Applicant” means, in the case of:

(a) An individual Medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits; and

(b) A group Medicare supplement policy or subscriber contract, the proposed certificate holder.

(2) “Certificate” means any certificate issued under a group Medicare supplement policy or contract which has been delivered or issued for delivery in this State, including any individual certificate issued by a nonprofit health service plan or by a health maintenance organization.

(3) “Direct response solicitation” means solicitation of individuals or groups through the mail or by mass media advertising, including both print and broadcast advertising.

(4) “Health care expenses” means expenses of health maintenance organizations associated with the delivery of health care services which are analogous to incurred losses of insurers. These expenses do not include:

(a) Home office and overhead costs;

(b) Advertising costs;

(d) Taxes;

(e) Capital costs;

(f) Administrative costs; or

(g) Claims processing costs.

(5) “Health insurance” means insurance coverage as defined in Insurance Article, §1-101(q), Annotated Code of Maryland.

(6) “Individual policy” means:

(a) Individually issued policies and certificates; and

(b) Certificates issued under group policies as a result of the direct response solicitation.

(7) “Low-dose mammography” means X-ray examination of the breast using dedicated equipment including an X-ray tube, filter, compression device, screens, films, and cassettes specifically for mammography with average radiation exposure to deliver less than 1 rad mid-breast, two views per breast.

(8) “Medicaid” means the Maryland Medical Assistance Program or any similar program provided by the State in which the insured person resides.

(9) “Medicare” means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended.

(10) “Medicare eligible expenses” means health care expenses of the kinds covered by Medicare to the extent these services are considered reasonable under Medicare rules and regulations.

(11) Medicare Supplement Policy.

(a) “Medicare supplement policy” means an individual or group policy, subscriber contract, or certificate of health insurance primarily designed, advertised, marketed, or otherwise purported to be a supplement to reimbursements under Medicare for the hospital, medical, surgical, nursing, or related expenses of persons eligible for Medicare by reason of age.

(b) “Medicare supplement policy” does not include benefits offered by a health maintenance organization or other direct service organization in connection with a contract with the United States Health Care Financing Administration.

(12) “Medigap policy” means a Medicare supplement policy.

(13) “Policy and subscriber contracts”, whenever they appear in these regulations, include “certificate” unless the context indicates otherwise.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.05 Policy Definitions and Terms.

A. An insurance policy, subscriber contract, or certificate may not be advertised, marketed, solicited, or issued for delivery in this State as a Medicare supplement policy unless it contains definitions or terms which conform to the requirements of this regulation, or definitions which are more favorable to the insured person or certificate holder.

B. Terms To Be Defined in the Policy.

(1) Accident.

(a) “Accident”, “accidental injury”, or “accidental means” shall be defined to employ “result” language and may not include words which establish an accidental means test or use words such as “external, violent, and accidental means”, “visible contusion or wound”, or words of similar import, description, or characterization.

(b) The definition may not be more restrictive than the following: “Injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person which is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”

(c) The definition may additionally provide that injuries do not include injuries for which benefits are provided or available to the insured under any workers' compensation, occupational disease, employer's liability, or similar law, or to the extent permitted by law, to benefits provided or available under any motor vehicle no-fault plan.

(2) “Benefit period” or “Medicare benefit period” may not be defined in a manner more restrictive than as defined in the Medicare program.

(3) “Convalescent nursing home”, “extended care facility”, or “skilled nursing facility” shall be defined in relation to its status, facilities, and available services. The following apply:

(a) The definition may not be more restrictive than one requiring that the home or facility:

(i) Be operated pursuant to law;

(ii) Be approved for payment of Medicare benefits or be qualified to receive that approval;

(iii) Be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician;

(iv) Provide continuous 24-hour-a-day nursing service by or under the supervision of a registered graduate professional nurse (R.N.); and

(v) Maintain a daily medical record of each patient.

(b) The definition of the home or facility may provide that the term does not include:

(i) A home, facility, or part of a home or facility used primarily for rest;

(ii) A home or facility for the aged or for the care of drug addicts or alcoholics; or

(iii) A home or facility primarily used for the care and treatment of mental diseases or disorders, or for custodial or educational care.

(4) “Hospital” shall be defined in relation to its status, facilities, and available services, or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals. The definition of the term “hospital”:

(a) May not be more restrictive than one requiring that the hospital:

(i) Be an institution operated pursuant to law,

(ii) Be primarily and continuously engaged in providing or operating, either on its premises or in facilities available to the hospital on a prearranged basis and under the supervision of a staff of duly licensed physicians, medical, diagnostic, and major surgical facilities for the medical care and treatment of sick or injured persons on an inpatient basis, for which a charge is made, and

(iii) Provide 24-hour nursing service by or under the supervision of registered graduate professional nurses (R.N.'s);

(b) May provide that the term does not include:

(i) Convalescent homes, convalescent rest or nursing facilities,

(ii) Facilities primarily affording custodial, educational, or rehabilitative care,

(iii) Facilities for the aged, drug addicts or alcoholics, military, veterans' or soldiers' home, or any hospital contracted for or operated by any national government or national governmental agency for the treatment of members or ex-members of the armed forces, except for services rendered on an emergency basis when legal liability exists for charges made to the individual for these services.

(5) “Medicare” shall be defined in the policy substantially either as:

(a) “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended”; or

(b) “Title I, Part 1 of Public Law 89-97, as enacted by the 89th Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes of that Act.”

(6) “Medicare eligible expenses” shall be defined in the policy as health care expenses of the kind covered by Medicare, to the extent recognized as reasonable by Medicare. The insurer may modify the definition to provide that payments under the policy will be conditioned on less restrictive payment conditions, including determinations of medical necessity, than the conditions applicable to medical claims.

(7) “Mental or nervous disorders” may be defined in a manner which includes neurosis, psychoneurosis, psychopathy, psychosis, and mental and emotional disease or disorder of any kind.

(8) “Nurse” may be defined to include a registered graduate professional nurse (R.N.), a licensed practical nurse (L.P.N.), a licensed nurse anesthetist, or a licensed vocational nurse (L.V.N.). The use of the words “nurse” or “trained nurse” without further qualification will require the insurer to recognize the services of any individual qualified under applicable statutes or regulations provided the nurse is acting within the lawful scope of practice of the nurse's license.

(9) “Physician” shall be defined to include a licensed physician or any duly licensed provider of medical care and treatment when the services to be performed are within the lawful scope of practice of the provider.

(10) “Sickness” shall be defined so as to be not more restrictive than a sickness or disease of an insured person which first manifests itself after the effective date of the insurance and while the insurance is in force. The insurer may modify the definition to exclude sickness or disease for which benefits are provided under any workers' compensation, occupational disease, employer's liability, or similar law.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.06 Prohibited Policy Provisions.

A. Waivers may not be included in or attached to a Medicare supplement policy if the effect of the waivers is to exclude, limit, or reduce coverage or benefits for specifically named or described diseases or physical conditions.

B. A Medicare supplement policy or subscriber contract may not be advertised, solicited, or issued for delivery in this State as a Medicare supplement policy or subscriber contract if the policy or contract limits or excludes coverage by type of illness, accident, treatment, or medical condition, except for the following, provided however, that if any of the following limitations or exclusions are contained in a Medicare supplement policy, the limitation or exclusion may not be more restrictive than that applicable to the Medicare program:

(1) Foot care in connection with corns, calluses, flat feet, fallen arches, weak feet, chronic foot strain, or symptomatic complaints of the feet;

(2) Mental or emotional disorders, alcoholism, and drug addiction;

(3) Illness, treatment, or medical condition arising out of:

(a) War or act of war (whether declared or undeclared), participation in a felony, riot or insurrection, service in the armed forces or auxiliary units,

(b) Suicide while sane or insane, attempted suicide, or intentionally self-inflicted injury, or

(c) Aviation or air travel other than as a fare-paying passenger on a regularly scheduled airline or on a group-chartered plane;

(4) Cosmetic surgery, but this exclusion may not apply to reconstructive surgery when the surgery is incidental to or follows surgery resulting from trauma, infection, or diseases of the involved part;

(5) Care in connection with the detection and correction by manual or mechanical means of structural imbalance, distortion, or subluxation in the human body for purposes of removing nerve interference and their effects, if the interference is the result of or related to distortion, misalignment or subluxation of, or in, the vertebral column;

(6) Treatment provided in a federal government hospital, benefits provided under Medicare or other governmental program (except Medicaid), any workers' compensation, employer's liability or occupational disease or similar law, or any motor vehicle no-fault or similar law;

(7) Services rendered by, and separately billed by, the employees of hospitals, laboratories, or other institutions;

(8) Services performed by a member of the covered person's immediate family, and services for which no charge is normally made in the absence of insurance;

(9) Dental care or treatment;

(10) Eyeglasses, hearing aids, and examination for their prescription or fitting;

(11) Rest cures, custodial care, transportation, and routine physical examinations;

(12) Territorial limitations outside the United States; and

(13) Coverage of any expense to the extent of any benefit available to the insured under Medicare.

C. The terms “Medicare supplement”, “Medigap”, and words of similar import may not be used in connection with the advertisement, solicitation, or policy description or title unless the policy is issued in compliance with these regulations.

D. A Medicare supplement policy, contract, or certificate in force in this State may not include benefits which duplicate benefits provided by Medicare.

E. An insurer may not deny, reduce, or condition coverage or apply an increased premium rating to an applicant for a Medicare supplement policy by reason of the applicant's health status, claims experience, medical condition, or use of medical care if the applicant applies for the Medicare supplement policy within the first 6 months after becoming eligible for Medicare by reason of age. However, the insurer may include a provision with regard to preexisting conditions which complies with Regulation .07B(1) of this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.07 Minimum Benefit Standards.

A. A health insurance policy, contract, or certificate may not be advertised, marketed, solicited, or issued for delivery in this State as a Medicare supplement policy or as a Medigap policy unless it meets the following general and minimum standards and unless the insurer and its agents adhere to the requirements of the Maryland statutes and regulations regarding the sale of Medicare supplement policies. The minimum standards do not preclude the provision of additional benefits which are not inconsistent with these requirements and the use of other provisions which are more favorable to the insured or the policyholder. Whenever a policy is referred to in these regulations, it shall include a certificate.

B. General Standards.

(1) A Medicare supplement policy may not deny a claim for losses incurred more than 6 months after the effective date of coverage for a preexisting condition. The policy may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.

(2) A Medicare supplement policy may not provide benefits for losses resulting from sickness on a different basis than benefits provided for losses resulting from accidents.

(3) Automatic Changes to Correspond to Changes in Medicare.

(a) A Medicare supplement policy shall provide that benefits designed to cover deductibles or coinsurance amounts under Medicare will be changed automatically to coincide with any corresponding changes in the applicable Medicare deductible and copayment amounts.

(b) The insurer shall reserve the right to adjust premiums under the policy for the changes described in §B(3)(a) of this regulation.

(c) Proposed premium adjustments shall be submitted for approval by the Commissioner in accordance with the requirements of COMAR 31.10.01 and with other applicable regulations and statutes.

(4) Guaranteed Renewability.

(a) A Medicare supplement policy which provides coverage for an insured and spouse shall provide, except in the event of nonpayment of premium, continuation of coverage on the:

(i) Insured if coverage for the spouse is terminated; and

(ii) Spouse if coverage for the insured is terminated.

(b) Except in the event of nonpayment of premium, or as authorized by the Commissioner, an insurer may not cancel or nonrenew a Medicare supplement policy or certificate.

(5) Extension of Benefits.

(a) Termination of a Medicare supplement policy shall be without prejudice to any continuous loss which began while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured limited to the duration of the policy benefit period, if any, or payment of the maximum benefits.

(b) Receipt of Medicare Part D benefits may not be considered in determining a continuous loss.

(6) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this regulation.

(7) Termination by a Group Policyholder.

(a) If a group Medicare supplement policy is terminated by the group policyholder and not replaced as provided in §B(9) of this regulation, the insurer shall offer certificate holders an individual Medicare supplement policy.

(b) The insurer shall offer the certificate holders described in §B(7)(a) of this regulation at least the following choices:

(i) An individual Medicare supplement policy which provides for continuation of the benefits contained in the group policy; and

(ii) An individual Medicare supplement policy which provides only those benefits which are required to meet the minimum standards of these regulations.

(8) If membership in a group is terminated, the insurer shall:

(a) Offer the certificate holder the conversion rights described in §B(7) of this regulation; or

(b) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(9) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

C. Minimum Required Benefits.

(1) A Medicare supplement policy shall provide at least the following minimum benefits:

(a) Coverage of Medicare Part A eligible expenses for the initial Medicare deductible for hospitalization in any Medicare benefit period;

(b) Coverage of Medicare Part A eligible expenses for hospitalization to the extent not covered by Medicare for the 61st day through the 90th day in any Medicare benefit period;

(c) Coverage of Medicare Part A eligible expenses incurred as daily hospital charges to the extent not covered by Medicare during use of Medicare's lifetime hospital inpatient reserve days;

(d) Upon exhaustion of all Medicare inpatient hospital coverage, including the lifetime reserve days, coverage of 90 percent of all Medicare Part A eligible expenses for hospitalization not covered by Medicare subject to a lifetime maximum benefit of an additional 365 days;

(e) Coverage for the coinsurance amount of Medicare eligible expenses under Medicare Part B regardless of hospital confinement;

(f) Coverage under Medicare Part A for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells as defined under federal regulations, in any calendar year unless replaced in accordance with federal regulations or already paid for under Medicare Part B;

(g) Coverage under Medicare Part B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, in any calendar year unless replaced in accordance with federal regulations or already paid for under Part A, subject to the Medicare Part B deductible amount; and

(h) Coverage for up to $100 in each calendar year for an annual screening by low-dose mammography for the presence of occult breast cancer.

(2) Each insurer issuing a Medicare supplement policy shall include in the policy, or offer as an option, coverage of the initial annual deductible for Medicare eligible expenses under Medicare Part B.

(3) Payment of benefits by insurers for Medicare eligible expenses may be conditioned upon the same or less restrictive payment conditions, including determinations of medical necessity, as are applicable to medical claims.

D. An insurer shall restore any benefits which were eliminated from a Medicare supplement policy by operation of the Medicare Catastrophic Coverage Act of 1988.

E. A Medicare supplement policy shall provide for suspension of policy benefits and premiums for up to 24 months if the covered person is receiving benefits under Medicaid.

Cross References

31.10.05.06E

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.08 Standards for Claims Payment.

A. Each insurer providing Medicare supplement policies or contracts shall comply with all provisions of §4081 of the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203), and with applicable rules and regulations issued under the Act by the Secretary of the federal Department of Health and Human Services. Some of the provisions of the Act require each insurer issuing Medicare supplement policies to:

(1) Agree to accept claims notices as claims for benefits under the policies;

(2) Agree to make payment determination based on the information provided in the notices;

(3) Provide notices to participating providers and suppliers and to the beneficiaries concerning the payment determinations;

(4) Provide payment directly to participating providers and suppliers;

(5) Provide Medicare beneficiaries with the name and address of Medicare contracting carriers to which notices should be sent; and

(6) Agree to pay usual fees.

B. Each insurer shall certify on its Medicare supplement insurance experience reporting forms compliance with the requirements set forth in §A of this regulation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.09 Loss Ratio Standards.

As soon as practicable, but before the effective date of Medicare benefit changes, each insurer issuing or delivering Medicare supplement policies or subscriber contracts in this State shall file with the Commissioner, in accordance with applicable filing procedures:

A. Appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the applicable policies or certificates. Supporting documents necessary to justify the proposed adjustments shall be included with the filing. The following apply:

(1) Each insurer subject to the Medicare Supplement Act of Insurance Article, Annotated Code of Maryland, issuing or delivering Medicare supplement policies or contracts to residents of this State, shall make those premium adjustments which are necessary to produce an expected loss ratio under the policies or contracts which will conform with the minimum loss ratio standards for Medicare supplement policies and which are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums for the Medicare supplement policies or contracts. Premium adjustments shall be calculated for the period beginning with Medicare benefit changes.

(2) Premium adjustments which would modify the loss ratio under the policies and contracts other than the adjustments described in this section may be made only on the renewal date or anniversary date of the policy or contract.

B. Appropriate riders, endorsements, or policy forms, which shall be drafted to:

(1) Accomplish Medicare supplement insurance modifications necessary to:

(a) Eliminate benefit duplications with Medicare, and

(b) Provide any additional benefits necessary to comply with State or federal statutes, rules, and regulations modifying minimum benefit requirements under Medicare supplement policies and contracts;

(2) Provide a clear description of the Medicare supplement benefits to be provided by the policies or contracts.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.10 Filing Requirements for Out-of-State Group Policies.

A. Each insurer providing group Medicare supplement insurance benefits to a resident of this State under a group policy issued elsewhere shall file a copy of the master policy and any certificate used in this State in accordance with the filing requirements and procedures applicable to group Medicare supplement policies issued in this State.

B. If the out-of-State group policy is issued to an employer having a home office in the state in which the policy is issued, the filing required by §A of this regulation shall be made not later than 30 days after the effective date of the certificate issued to any employee resident in this State.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

COMAR 31.10.05.11 Required Disclosure Provisions.

A. General.

(1) Medicare supplement policies shall contain a clearly worded provision regarding the right of the policyholder to renew or continue the policy. This provision shall be appropriately captioned and shall be printed on the first page of the policy.

(2) Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured or exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured unless otherwise authorized by the Commissioner. After the date of policy issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing, signed by the insured unless the benefits or coverage are required by the minimum standards for Medicare supplement insurance policies or are required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the additional premium charge shall be stated in the policy.

(3) A Medicare supplement policy which provides for the payment of benefits based on standards described as “usual and customary”, “reasonable and customary”, or words of similar import shall include a definition of these terms and an explanation of the terms in its accompanying outline of coverage.

(4) If a Medicare supplement policy contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy and may be labeled as “preexisting condition limitations” or a title of similar import.

(5) Medicare supplement policies or certificates shall have a notice prominently printed on the first page of the policy or certificate stating that the policyholder or certificate holder shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded.

B. Notice Requirements.

(1) As soon as practicable, but not later than 30 days before the annual effective date of any Medicare benefit changes, each insurer, including any health service plan, which provides Medicare supplement insurance or benefits to a resident of this State, shall notify its policyholders, contract holders, and certificate holders of modifications to be made to Medicare insurance policies or contracts in a manner approved by the Commissioner. In addition, the notice shall:

(a) Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement insurance policy or contract; and

(b) Inform each covered person as to when any premium adjustment is to be made by reason of changes in Medicare benefits.

(2) The notices of benefit modifications and of any premium adjustments shall be in outline form and in clear and simple terms in order to facilitate comprehension.

(3) The notices may not contain or be accompanied by any solicitation materials.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.09, Appendixes A—C adopted as an emergency provision effective July 1, 1982 (9:13 Md. R. 1340); adopted permanently effective October 1, 1982 (9:17 Md. R. 1707)
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.14 and Appendices A—C adopted as an emergency provision effective July 25, 1989 (16:16 Md. R. 1738); emergency status extended at 16:26 Md. R. 2782 and 17:5 Md. R. 633; emergency status expired July 20, 1990
Administrative History: Regulation .01 amended, Regulations .02—.09 and Appendices A—C repealed, and new Regulations .02—.21 adopted effective July 23, 1990 (17:14 Md. R. 1757)
Administrative History: Regulation .06E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .07E adopted effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: Regulation .16 amended effective November 11, 1991 (18:22 Md. R. 2396)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.59 to COMAR 31.10.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .07 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .09 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .11 amended effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulations .12—.21 repealed effective January 1, 2006 (32:18 Md. R. 1522)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 9; Health-General Article, §§19-705 and 19-706; Annotated Code of Maryland

31.10.06 Standards for Medicare Supplement Policies

COMAR 31.10.06.01 Applicability and Scope.

A. Except as otherwise provided in Regulations .10, .11, and .17 of this chapter, this chapter applies to all:

(1) Medicare supplement policies delivered or issued for delivery in this State; and

(2) Certificates issued under group Medicare supplement policies if the certificates are delivered or issued for delivery in this State.

B. This chapter is applicable to all Medicare supplement policies and certificates under group Medicare supplement policies held by residents of this State and in force on the day preceding the effective date of House Bill 305 (Chapter 526, Acts of 1992), except as to the benefits and other policy provisions of those policies and certificates. While those policies and certificates remain in effect, their benefits and policy provisions shall continue to be governed by the applicable provisions of the Annotated Code of Maryland in effect immediately preceding the effective date of House Bill 305 (Chapter 526, Acts of 1992) and of the applicable regulations of COMAR 31.10.05 where the latter regulations are inconsistent with this chapter.

C. This chapter does not apply to a policy or a certificate under a group policy issued to one or more employers or labor organizations, or to the trustees of a fund established by one or more employers or labor organizations for employees or former employees of the employers, or for members or former members of the labor organizations.

Cross References

31.10.06.13F(1)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Adverse decision” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(2) “Applicant” means:

(a) In the case of an individual Medicare supplement policy, the person who seeks to contract for insurance benefits; and

(b) In the case of a group Medicare supplement policy, the proposed certificate holder.

(3) “Bankruptcy” means when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the State.

(4) “Certificate” means any certificate delivered or issued for delivery in this State under a group Medicare supplement policy.

(5) “Certificate form” means the form on which the certificate is delivered or issued for delivery by the issuer.

(6) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers.

(7) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days.

(8) “Coverage decision” has the meaning stated in Insurance Article, §15-10D-01, Annotated Code of Maryland.

(9) Creditable coverage.

(a) “Creditable coverage” means, with respect to an individual, coverage of the individual provided under any of the following:

(i) A group health plan;

(ii) Health insurance coverage;

(iii) Part A or Part B of Title XVIII of the Social Security Act (Medicare);

(iv) Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under §1928;

(v) Chapter 55 of Title 10 United States Code (CHAMPUS);

(vi) A medical care program of the Indian Health Service or of a tribal organization;

(vii) A State health benefits risk pool;

(viii) A health plan offered under Chapter 89 of Title 5 United States Code (Federal Employees Health Benefits Program);

(ix) A public health plan as defined in federal regulation; and

(x) A health benefit plan under §5(e) of the Peace Corps Act (22 U.S.C. §2504(e)).

(b) “Creditable coverage” does not include one or more, or any combination of, the following:

(i) Coverage only for accident or disability income insurance, or any combination of them;

(ii) Coverage issued as a supplement to liability insurance;

(iii) Liability insurance, including general liability insurance and automobile liability insurance;

(iv) Workers' compensation or similar insurance;

(v) Automobile medical payment insurance;

(vi) Credit-only insurance;

(vii) Coverage for on-site medical clinics; and

(viii) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

(c) “Creditable coverage” does not include coverage for the following benefits if they are provided under a separate policy, certificate, or contract of insurance, or are otherwise not an integral part of a plan of coverage described in §B(9)(a) of this regulation:

(i) Limited scope dental or vision benefits;

(ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination of these coverages; and

(iii) Other similar, limited benefits as are specified in federal regulations.

(d) “Creditable coverage” does not include coverage for the following benefits if offered as independent, noncoordinated benefits:

(i) Coverage only for a specified disease or illness; and

(ii) Hospital indemnity or other fixed indemnity insurance.

(e) “Creditable coverage” does not include the following coverage if it is offered as a separate policy, certificate, or contract of insurance:

(i) Medicare supplemental health insurance as defined under §1882(g)(1) of the Social Security Act;

(ii) Coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code; and

(iii) Similar supplemental coverage provided to coverage under a group health plan.

(10) “Employee welfare benefit plan” means a plan, fund, or program of employee benefits as defined in 29 U.S.C. §1002 (Employee Retirement Income Security Act).

(11) “Grievance” means dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers.

(12) “Insolvency” means when an issuer, licensed to transact the business of insurance in this State, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile.

(13) “Issuer” means insurance companies, fraternal benefit societies, nonprofit health service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this State Medicare supplement policies or certificates.

(14) “Medicare” means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.

(15) Medicare Advantage Plan.

(a) “Medicare Advantage plan” means a plan of coverage for health benefits under Medicare Part C as defined in 42 U.S.C. §1395w-28(b)(1).

(b) “Medicare Advantage plan” includes:

(i) Coordinated care plans that provide health care services, including health maintenance organization plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organization plans;

(ii) Medical savings account plans coupled with a contribution into a Medicare Advantage Plan medical savings account; and

(iii) Medicare Advantage private fee-for-service plans.

(16) “Medicare Select certificate” means a Medicare supplement certificate that contains restricted network provisions.

(17) “Medicare Select issuer” means an issuer offering, or seeking to offer, a Medicare Select policy or certificate.

(18) “Medicare Select policy” means a Medicare supplement policy that contains restricted network provisions.

(19) Medicare Supplement Policy.

(a) “Medicare supplement policy” means a group or individual policy of health insurance, or a certificate of a fraternal benefit society, or a subscriber contract of a nonprofit health service plan or of a health maintenance organization, other than a policy issued pursuant to a contract under the federal Social Security Act, §1876, or an issued policy under a demonstration project specified in 42 U.S.C. §1395ss(g)(1), which is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare.

(b) “Medicare supplement policy” does not include Medicare Advantage plans established under Medicare Part C, Outpatient Prescription Drug plans established under Medicare Part D, or any Health Care Prepayment Plan (HCPP) that provides benefits pursuant to an agreement under §1833(a)(1)(A) of the Social Security Act.

(20) “Network provider” means a provider, or group of providers, of health care which has entered into a written agreement with the issuer to provide benefits insured under a Medicare Select policy.

(21) “Newly eligible for Medicare” means the individual:

(a) Attained age 65; or

(b) Became entitled to benefits under part A pursuant to §226(b) or 226A of the Social Security Act, or is deemed to be eligible for benefits under §226(a) of the Social Security Act.

(22) 1990 standardized Medicare Supplement Benefit Plan.

(a) “1990 standardized Medicare supplement benefit plan”, “1990 standardized benefit plan”, or “1990 plan” means a group or individual policy of Medicare supplement insurance issued on or after July 14, 1992, and with an effective date for coverage before June 1, 2010.

(b) “1990 standardized Medicare supplement benefit plan”, “1990 standardized benefit plan”, or “1990 plan” includes Medicare supplement insurance policies and certificates described in §B(21)(a) of this regulation that are renewed on or after June 1, 2010, which are not replaced by the issuer at the request of the insured.

(23) “Policy form” means the form on which the policy or certificate is delivered or issued for delivery by the issuer.

(24) “Restricted network provision” means any provision which conditions the payment of benefits, in whole or in part, on the use of network providers.

(25) “Secretary” means the Secretary of the United States Department of Health and Human Services.

(26) “Service area” means the geographic area approved by the Secretary of the Maryland Department of Health within which an issuer is authorized to offer a Medicare Select policy.

(27) “2010 standardized Medicare supplement benefit plan”, “2010 standardized benefit plan”, or “2010 plan” means a group or individual policy of Medicare supplement insurance issued with an effective date for coverage on or after June 1, 2010.

Cross References

31.10.06.24A(1)

31.10.06.25A(1)

31.10.06.28F(1)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.03 Policy Definitions and Terms.

A. A policy or certificate may not be advertised, solicited, or issued for delivery in this State as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms which conform to the requirements of these regulations.

B. Policy Terms Defined.

(1) Accident.

(a) “Accident”, “accidental injury”, or “accidental means” shall be defined to employ “result” language.

(b) “Accident”, “accidental injury”, or “accidental means” does not include words which establish an accidental means test or use words such as “external, violent, visible wounds” or similar words of description or characterization.

(c) The definition may not be more restrictive than the following: “Injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person which is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”

(d) The definition may provide that injuries not include injuries for which benefits are provided or available under any workers' compensation, employer's liability or similar law, or motor vehicle no-fault plan, unless prohibited by law.

(2) “Benefit period” or “Medicare benefit period” may not be defined more restrictively than as defined in the Medicare program.

(3) “Convalescent nursing home”, “extended care facility”, or “skilled nursing facility” may not be defined more restrictively than as defined in the Medicare program.

(4) “Health care expenses” means, for the purposes of Regulation .11 of this chapter, expenses of health maintenance organizations associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers.

(5) “Hospital” may be defined in relation to its status, facilities, and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare program.

(6) “Medicare” shall be defined in the policy and certificate. Medicare may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended”, or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes of it” or words of similar import.

(7) “Medicare eligible expenses” means expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare.

C. Restrictions on Policy Definitions.

(1) “Physician” may not be defined more restrictively than as defined in the Medicare program.

(2) Sickness.

(a) “Sickness” may not be defined to be more restrictive than the following: Sickness means illness or disease of an insured person which first manifests itself after the effective date of insurance and while the insurance is in force.

(b) This definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers' compensation, occupational disease, employer's liability, or similar law.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.04 Filing and Approval of Policies and Certificates and Premium Rates.

A. An issuer may not deliver or issue for delivery a Medicare supplement policy or certificate to a resident of this State unless the policy form or certificate form has been filed with and approved by the Commissioner in accordance with filing requirements and procedures prescribed by applicable provisions of Insurance Article, §§12-203, 12-205, and 14-126, Annotated Code of Maryland, and other applicable provisions of Insurance Article and Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland, and applicable regulations and procedures for filing for approval of forms.

B. An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 only with the commissioner in the state in which the policy or certificate was issued.

C. Premium Rates.

(1) An insurer may not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule, methodology, and supporting documentations have been filed with and approved by the Commissioner in accordance with the filing requirements and procedures prescribed by the Commissioner.

(2) An issuer may not increase the premium rates for a Medicare Supplement policy for an insured person until:

(a) For an individual policy, at least 1 year after the date on which the individual policy became effective; and

(b) For a group policy, at least 1 year after the date on which the certificate became effective.

(3) Starting 1 year after the date on which an individual policy or certificate became effective, an issuer may not increase the premium rates for a Medicare Supplement policy for an insured person more than once each year.

D. Filing for Approval.

(1) Except as provided in §D(2) of this regulation, an issuer may not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan.

(2) An issuer may offer, with the approval of the Commissioner, up to four additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:

(a) The inclusion of new or innovative benefits;

(b) The addition of either direct response or agent marketing methods;

(d) The offering of coverage to individuals eligible for Medicare by reason of disability.

(3) For the purposes of this section, a “type” means an individual policy, a group policy, an individual Medicare Select policy, or a group Medicare Select policy.

E. Availability.

(1) Except as provided in §E(2) of this regulation, an issuer shall continue to make available for purchase any policy form or certificate form issued after the effective date of this regulation that has been approved by the Commissioner. A policy form or certificate form may not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.

(2) An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the Commissioner in writing its decision at least 30 days before discontinuing the availability of the form of the policy or certificate. After the effective date of the notice, the issuer may no longer offer for sale the policy form or certificate form in this State.

(3) An issuer that discontinues the availability of a policy form or certificate form in accordance with §E(2) of this regulation may not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of 5 years after the issuer provides notice to the Commissioner of the discontinuance. The period of discontinuance may be reduced if the Commissioner determines that a shorter period is appropriate.

(4) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this section.

(5) A change in the rating structure or methodology shall be considered a discontinuance under this section unless the issuer complies with the following requirements:

(a) The issuer provides an actuarial memorandum, in a form and manner prescribed by the Commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates.

(b) The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The Commissioner may approve a change to the differential which is in the public interest.

F. Basis of Experience Calculation.

(1) Except as provided in §F(2) of this regulation, the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in Regulation .11 of this chapter.

(2) Forms assumed under an assumption reinsurance agreement may not be combined with the experience of other forms for purposes of the refund or credit calculation.

Cross References

31.10.06.11A(6)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.05 Filing Requirements for Advertising.

An issuer shall provide a copy of any Medicare supplement advertisement intended for use in this State whether through written, radio, or television medium or otherwise, to the Commissioner for review by the Commissioner at least 5 business days before using the advertisement.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.06 Open Enrollment.

A. Period of Open Enrollment.

(1) An issuer may not deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this State, nor discriminate in the pricing of the policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant when:

(a) An application for the policy or certificate is submitted during the 6-month period beginning with the first day of the first month in which an individual is both 65 years old or older and is enrolled for benefits under Medicare Part B; or

(b) An application for the policy or certificate is submitted on or up to 30 days after the birthday of an individual enrolled in a Medicare supplement policy or certificate.

(2) Each Medicare supplement policy and certificate currently available from an issuer shall be made available to all applicants who qualify under §A(1)(a) of this regulation without regard to age.

(3) Subject to Regulation .31A of this chapter, an insurer shall make available to applicants who qualify under §A(1)(b) of this regulation Medicare supplement policies or certificates with benefits that are equal to or less than the benefits of the applicant’s existing Medicare supplement policy or certificate. For the purpose of this regulation, “benefits that are equal to or less than the benefits of the applicant’s existing Medicare supplement policy or certificate” means a policy or certificate of the same or lower benefit level as indicated in the below chart.

| Existing Plan | Lesser or Equal Plan | | --- | --- | | Plan A | Plan A | | Plan B | Plan A or B | | Plan C | Plan A, B, C, D, K, L, M, or N | | Plan D | Plan A, B, D, K, L, M, or N | | Plan E | Plan A, B, D, K, L, M, or N | | Plan F | Plan A, B, C, D, F, F with a high deductible, G, G with a high deductible, K, L, M, or N | | Plan F with a high deductible | Plan F with a high deductible or G with a high deductible | | Plan G | Plan A, B, D, G, K, L, M, N, F with a high deductible, or G with a high deductible | | Plan G with a high deductible | Plan G with a high deductible | | Plan H | Plan A, B, D, K, L, M, or N | | Plan I | Plan A, B, D, G, K, L, M, or N | | Plan J | Plan A, B, C, D, F, F with a high deductible, G, G with a high deductible, K, L, M, or N | | Plan J with a high deductible | Plan F with a high deductible or G with a high deductible | | Plan K | Plan K | | Plan L | Plan K or L | | Plan M | Plan M or N | | Plan N | Plan N |

B. Application of Creditable Coverage.

(1) If an applicant qualifies under §A of this regulation and submits an application during the time period referenced in §A of this regulation and, as of the date of application, has had a continuous period of creditable coverage of at least 6 months, the issuer may not exclude benefits based on a preexisting condition.

(2) If the applicant qualifies under §A of this regulation and submits an application during the time period referenced in §A of this regulation and, as of the date of application, has had a continuous period of creditable coverage that is less than 6 months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date.

(3) The Secretary shall specify the manner of the reduction under §B(2) of this regulation.

C. Except as provided in §B of this regulation and in Regulations .09-1 and .18 of this chapter, §A of this regulation is not to be construed as preventing the exclusion of benefits under a policy during the first 6 months based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the 6 months before the policy became effective.

D. Individuals Younger than 65 Years Old and Enrolled in Medicare Part B. An issuer shall comply with the open enrollment requirements that are described in Insurance Article, §15-909, Annotated Code of Maryland, as applying to individuals who are both younger than 65 years old and enrolled in Part B of Medicare.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.07 Policy Provisions.

A. Except for permitted preexisting condition clauses as described in Regulations .08B and .27B(2) of this chapter, a policy or certificate may not be advertised, solicited, or issued for delivery in this State as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.

B. A Medicare supplement policy or certificate may not use waivers to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.

C. A Medicare supplement policy or certificate in force in this State may not contain benefits which duplicate benefits provided by Medicare.

D. Polices With Benefits for Outpatient Prescription Drugs.

(1) Subject to COMAR 31.10.05.07B(4) and (6)—(9), and Regulation .08B(5)—(10) of this chapter, a Medicare supplement policy with benefits for outpatient prescription drugs in existence before January 1, 2006, shall be renewed for current policyholders who do not enroll in Part D at the option of the policyholder.

(2) A Medicare supplement policy with benefits for outpatient prescription drugs may not be issued after December 31, 2005.

(3) After December 31, 2005, a Medicare supplement policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless:

(a) The policy is modified to eliminate outpatient prescription coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual's coverage under a Part D plan; and

(b) Premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of Medicare Part D enrollment, accounting for any claims paid, if applicable.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.08 Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plans.

A. General Standards.

(1) The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this State on or after July 14, 1992, and with an effective date for coverage before June 1, 2010.

(2) A policy or certificate may not be advertised, solicited, delivered, or issued for delivery in this State as a Medicare supplement policy or certificate unless it complies with these benefit standards.

B. Required Standards.

(1) The standards in this section apply to Medicare supplement policies and certificates and are in addition to all other requirements of these regulations.

(2) A Medicare supplement policy or certificate may not exclude or limit benefits for losses incurred more than 6 months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.

(3) A Medicare supplement policy or certificate may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.

(4) A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with these changes.

(5) A Medicare supplement policy or certificate may not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.

(6) Each Medicare supplement policy shall be guaranteed renewable. The issuer may not:

(a) Cancel or nonrenew the policy solely on the ground of health status of the individual; or

(b) Cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(7) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under §B(9) of this regulation, the issuer shall offer certificate holders an individual Medicare supplement policy which at the option of the certificate holder provides for:

(a) Continuation of the benefits contained in the group policy; or

(b) Benefits which meet the requirements of these regulations.

(8) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(a) Offer the certificate holder the conversion option described in §B(7) of this regulation; or

(b) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(9) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the succeeding issuer shall offer coverage to all persons covered under the old group policy on the group policy's date of termination. Coverage under the new policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(10) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of §B(6) of this regulation.

(11) Extension of Benefits.

(a) Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits.

(b) Receipt of Medicare Part D benefits may not be considered in determining a continuous loss under §B(11)(a) of this regulation.

(12) Suspension of Benefits.

(a) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for a period not to exceed 24 months in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act (Medicaid), but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to medical assistance.

(b) If the suspension described in §B(12)(a) of this regulation occurs and if the policyholder or certificate holder loses entitlement to Medicaid, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of entitlement, if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss of entitlement and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(c) A Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended, for any period that may be provided by federal regulation, at the request of the policyholder, if the policyholder is:

(i) Entitled to benefits under §226(b) of the Social Security Act; and

(ii) Covered under a group health plan as defined in §1862(b)(1)(A)(v) of the Social Security Act.

(d) If the suspension described in §B(12)(c) of this regulation occurs and if the policyholder or the certificate holder loses coverage under the group health plan, the Medicare supplement policy shall be reinstituted automatically, effective as of the date of the loss of coverage under the group health plan, if the policyholder described in §B(12)(c):

(i) Provides notice of loss of coverage within 90 days after the date of the loss of group coverage; and

(ii) Pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

(e) Reinstitution of coverage under §B(12)(b) or (d) of this regulation:

(i) May not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension;

(iii) If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, shall provide for the reinstitution of the policy for Medicare Part D enrollees without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension; and

(iv) Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.

(13) Exchange Offer.

(a) If an issuer makes a written offer to each Medicare supplement policyholder or certificate holder of one or more of its plans, to exchange during a specified period the individual's 1990 standardized benefit plan, as described in Regulation .09 of this chapter, for a 2010 standardized benefit plan, as described in Regulation .28 of this chapter, the offer and subsequent exchange shall comply with the requirements of this subsection.

(b) An issuer need not provide justification to the Commissioner if the insured replaces a 1990 standardized benefit plan policy or certificate with an issue age rated 2010 standardized plan policy or certificate at the insured's original issue age and duration. If an insured's policy or certificate to be replaced is priced on an issue age rate schedule at the time of the offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the prefunding inherent in the use of an issue age rate basis, for the benefit of the insured. The rate method proposed to be used by an issuer shall be filed with the Commissioner in accordance with COMAR 31.10.01.02.

(c) The rating class of the new policy or certificate shall be the class closest to the insured's class of the replaced coverage.

(d) An issuer may not apply a new preexisting condition limitation or a new incontestability period to the new policy for those benefits contained in the exchanged 1990 standardized benefit plan policy or certificate of the insured, but may apply a preexisting condition limitation of not more than 6 months to any added benefits contained in the new 2010 standardized benefit plan policy or certificate not contained in the exchanged policy.

(e) The new policy or certificate shall be offered to each policyholder or certificate holder within a given plan, except where the offer or issue would be in violation of State or federal law.

C. Standards for Basic (Core) Benefits Common to Benefit Plans A—J.

(1) Every issuer shall make available a policy or certificate including only the following basic core package of benefits to each prospective insured:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;

(c) Upon exhaustion of the Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;

(d) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations;

(e) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible.

(2) The provider shall accept the issuer's payment of the Medicare Part A eligible expenses for hospitalization under §C(1)(c) of this regulation as payment in full and may not bill the insured for any balance.

(3) An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not instead of the core package.

D. Standards for Additional Benefits. The following additional benefits shall be included in Medicare supplement benefit plans B through J only as provided by Regulation .09 of this chapter:

(1) Medicare Part A Deductible. Coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period.

(2) Skilled Nursing Facility Care. Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.

(3) Medicare Part B Deductible. Coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.

(4) Eighty percent of the Medicare Part B Excess Charges. Coverage for 80 percent of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

(5) One hundred percent of the Medicare Part B Excess Charges. Coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.

(6) Basic Outpatient Prescription Drug Benefit.

(a) Coverage for 50 percent of outpatient prescription drug charges after a $250 calendar year deductible, to a maximum of $1,250 in benefits received by the insured per calendar year, to the extent not covered by Medicare.

(b) The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.

(7) Extended Outpatient Prescription Drug Benefit.

(a) Coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by Medicare.

(b) The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.

(8) Medically Necessary Emergency Care in a Foreign Country. Coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit “emergency care” means care needed immediately because of an injury or an illness of sudden and unexpected onset.

(9) Preventive Medical Care Benefit.

(a) Coverage for the following preventive health services not covered by Medicare:

(i) An annual clinical preventive medical history and physical examination that may include tests and services from §D(9)(a)(ii) of this regulation and patient education to address preventive health care measures; and

(ii) Preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician.

(b) Reimbursement shall be for the actual charges up to 100 percent of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) Codes, to a maximum of $120 annually under this benefit, and this benefit may not include payment for any procedure covered by Medicare.

(10) At-Home Recovery Benefit.

(a) Coverage for services to provide short-term, at-home assistance with activities of daily living for those recovering from an illness, injury, or surgery.

(b) For purposes of the at-home recovery benefit, the following definitions shall apply:

(i) “Activities of daily living” include, but are not limited to, bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings.

(ii) “Care provider” means a duly qualified or licensed home health aide/homemaker, personal care aide, or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry.

(iii) “Home” means any place used by the insured as a place of residence, provided that this place qualifies as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility may not be considered the insured's place of residence.

(iv) “At-home recovery visit” means the period of a visit required to provide at-home recovery care, without limit on the duration of the visit, except each consecutive 4 hours in a 24-hour period of services provided by a care provider is one visit.

(i) At-home recovery services provided shall be primarily services which assist in activities of daily living.

(ii) The insured's attending physician shall certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare.

(d) Limitation of Coverage. Coverage is limited to:

(i) The number and type of at-home recovery visits certified as necessary by the insured's attending physician. The total number of at-home recovery visits may not exceed the number of Medicare-approved home health care visits under a Medicare-approved home care plan of treatment.

(ii) The actual charges for each visit up to a maximum reimbursement of $40 per visit.

(iii) $1,600 per calendar year.

(iv) Seven visits in any 1 week.

(v) Care furnished on a visiting basis in the insured's home.

(vi) Services provided by a care provider as defined in §D(10)(b)(ii) of this regulation.

(vii) At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded.

(viii) At-home recovery visits received during the period the insured is receiving Medicare-approved home care services or not more than 8 weeks after the service date of the last Medicare-approved home health care visit.

(e) Coverage is excluded for:

(i) Home care visits paid for by Medicare or other government programs;

(ii) Care provided by family members, unpaid volunteers, or providers who are not care providers.

E. Standards for Plans K and L.

(1) Standardized Medicare supplement benefit plan K shall consist of the following:

(a) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(b) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(c) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;

(d) Medicare Part A deductible: Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in §E(1)(j) of this regulation;

(e) Skilled nursing facility care: Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in §E(1)(j) of this regulation;

(f) Hospice care: Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in §E(1)(j) of this regulation;

(g) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in §E(1)(j) of this regulation;

(h) Except for coverage provided in §E(1)(i) of this regulation, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in §E(1)(j) of this regulation;

(i) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(j) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.

(2) The provider shall accept the issuer's payment of the Medicare Part A eligible expenses for hospitalization under §E(1)(c) of this regulation as payment in full and may not bill the insured for any balance.

(3) Standardized Medicare supplement benefit plan L shall consist of the following:

(a) The benefits described in §E(1)(a)—(c) and(i) of this regulation;

(b) The benefits described in §E(1)(d)—(h) of this regulation, but substituting 75 percent for 50 percent; and

Cross References

31.10.06.09C

31.10.06.09G(1)

31.10.06.09G(2)

31.10.06.09G(3)

31.10.06.09G(4)

31.10.06.09G(5)

31.10.06.09G(6)

31.10.06.09G(7)(b)

31.10.06.09G(8)

31.10.06.09G(9)(a)

31.10.06.09G(10)(a)

31.10.06.09G(11)(a)

31.10.06.09G(12)(b)

31.10.06.09H(1)

31.10.06.09H(2)

31.10.06.27A(3)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.09 Standard Medicare Supplement Benefit Plans for 1990 Plans.

A. Definitions.

(1) In this regulation, the following term has the meaning indicated.

(2) Term Defined. “Structure, language, and format” means style, arrangement, and overall content of a benefit.

B. General Standards.

(1) The standards found in §§C—I of this regulation are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this State on or after July 14, 1992, and with an effective date for coverage before June 1, 2010.

(2) A policy or certificate may not be advertised, solicited, delivered, or issued for delivery in this State as a Medicare supplement policy or certificate during the time period described in §B(1) of this regulation unless it complies with the benefit plan standards described in this regulation.

C. An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the core benefits, as defined in Regulation .08C of this chapter.

D. Groups, packages, or combinations of Medicare supplement benefits other than those listed in this regulation may not be offered for sale in this State, except as may be permitted in §I of this regulation and Regulation .24 of this chapter.

E. Structure of Benefits.

(1) Benefit plans shall be uniform in structure, language, designation, and format to the standard benefit plans A through L listed in this regulation and conform to the definitions in Regulations .02 and .03 of this chapter.

(2) Each benefit shall be structured in accordance with the format provided in Regulation .08C—E of this chapter and list the benefits in the order shown in this regulation.

F. An issuer may use, in addition to the benefit plan designations required in §E of this regulation, other designations to the extent permitted by law.

G. Make-up of 1990 Standardized Benefit Plans.

(1) Standardized Medicare supplement benefit plan A shall be limited to the basic (core) benefits common to all benefit plans, as defined in Regulation .08C of this chapter.

(2) Standardized Medicare supplement benefit plan B shall include only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible as defined in Regulation .08D(1) of this chapter.

(3) Standardized Medicare supplement benefit plan C shall include only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .08D(1), (2), (3), and (8) of this chapter.

(4) Standardized Medicare supplement benefit plan D shall include only the following: The core benefit, as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country, and the At-Home Recovery Benefit as defined in Regulation .08D(1), (2), (8), and (10) of this chapter.

(5) Standardized Medicare supplement benefit plan E shall include only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country, and Preventive Medical Care as defined in Regulation .08D(1), (2), (8), and (9) of this chapter.

(6) Standardized Medicare supplement benefit plan F shall include only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, the Skilled Nursing Facility Care, the Part B Deductible, 100 Percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .08D(1), (2), (3), (5), and (8) of this chapter.

(7) High Deductible Plan F.

(a) Standardized Medicare supplement benefit high deductible plan F shall include only 100 percent of covered expenses following the payment of the annual high deductible plan F deductible.

(b) The covered expenses include the core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, the Medicare Part B Deductible, 100 Percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .08D(1)—(3), (5), and (8) of this chapter.

(c) The annual high deductible plan F deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan F policy, and is in addition to any other specific benefit deductibles.

(d) The annual high deductible plan F deductible is $1,500 for 1999, and is based on the calendar year.

(e) The deductible shall be adjusted annually after 1999 by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(8) Standardized Medicare supplement benefit plan G shall include only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 80 Percent of the Medicare Part B Excess Charges, Medically Necessary Emergency Care in a Foreign Country, and the At-Home Recovery Benefit as defined in Regulation .08D(1), (2), (4), (8), and (10) of this chapter.

(9) Standardized Medicare Supplement Benefit Plan H.

(a) Standardized Medicare supplement benefit plan H shall consist of only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Basic Prescription Drug Benefit, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .08D(1), (2), (6), and (8) of this chapter.

(b) The outpatient prescription drug benefit may not be included in a Medicare supplement policy sold after December 31, 2005.

(10) Standardized Medicare Supplement Benefit Plan I.

(a) Standardized Medicare supplement benefit plan I shall consist of only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 Percent of the Medicare Part B Excess Charges, Basic Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, and At-Home Recovery Benefit as defined in Regulation .08D(1), (2), (5), (6), (8), and (10) of this chapter.

(b) The outpatient prescription drug benefit may not be included in a Medicare supplement policy sold after December 31, 2005.

(11) Standardized Medicare Supplement Benefit Plan J.

(a) Standardized Medicare supplement benefit plan J shall consist of only the following: The core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, 100 Percent of the Medicare Part B Excess Charges, Extended Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, Preventive Medical Care, and At-Home Recovery Benefit as defined in Regulation .08D(1)—(3) and (5)—(10) of this chapter.

(b) The outpatient prescription drug benefit may not be included in a Medicare supplement policy sold after December 31, 2005.

(12) High Deductible Plan J.

(a) Standardized Medicare supplement benefit high deductible plan J shall consist of only 100 percent of covered expenses following the payment of the annual high deductible plan J deductible.

(b) The covered expenses include the core benefit as defined in Regulation .08C of this chapter, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit, and at-home recovery benefit as defined in Regulation .08D(1)—(3), (5), and (7)—(10) of this chapter.

(c) The annual high deductible plan J deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan J policy, and is in addition to any other specific benefit deductibles.

(d) The annual deductible is $1,500 for 1999 and is based on a calendar year.

(f) The outpatient prescription drug benefit may not be included in a Medicare supplement policy sold after December 31, 2005.

H. Plans Mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(1) Standardized Medicare supplement benefit plan K shall consist of only those benefits described in Regulation .08E(1) of this chapter.

(2) Standardized Medicare supplement benefit plan L shall consist of only those benefits described in Regulation .08E(3) of this chapter.

I. New or Innovative Benefits.

(1) An issuer may, with the prior approval of the Commissioner, offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards.

(2) The new or innovative benefits described in §I(1) of this regulation may include benefits that are appropriate to Medicare supplement insurance, new or innovative, not otherwise available, cost-effective, and offered in a manner that is consistent with the goal of simplification of Medicare supplement policies.

(3) After December 31, 2005, the innovative benefit may not include an outpatient prescription drug benefit.

Cross References

31.10.06.08B(13)(a)

31.10.06.08D

31.10.06.28B(3)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.09-1 Guaranteed Issue for Eligible Individuals.

A. Guaranteed Issue.

(1) Eligible individuals are those individuals described in §B of this regulation who:

(a) Seek to enroll under the policy during the period specified in §C of this regulation; and

(b) Submit evidence of the date of termination, disenrollment, or Medicare Part D enrollment with the application for a Medicare supplement policy.

(2) With respect to eligible individuals, an issuer may not:

(a) Deny or condition the issuance or effectiveness of a Medicare supplement policy described in §E of this regulation that is offered and is available for issuance to new enrollees by the issuer;

(b) Discriminate in the pricing of a Medicare supplement policy described in §E of this regulation because of health status, claims experience, receipt of health care, or medical condition; and

(c) Impose an exclusion of benefits based on a preexisting condition under a Medicare supplement policy described in §E of this regulation.

B. An eligible individual is an individual described in any of the following:

(1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan terminates or the plan ceases to provide all supplemental health benefits to the individual;

(2) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, and any of the following circumstances apply:

(a) The certification of the organization or plan under the federal Social Security Act has been terminated;

(b) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

(i) Of a change in the individual's place of residence,

(ii) Of another change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in §1851(g)(3)(B) of the federal Social Security Act (when the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under §1856 of the federal Social Security Act), or

(iii) The plan is terminated for all individuals within a residence area;

(d) The individual demonstrates, in accordance with guidelines established by the Secretary, that:

(i) The organization offering the plan substantially violated a material provision of the organization's contract under Part C of Medicare in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide medically necessary covered care in accordance with applicable quality standards, or

(ii) The organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or

(e) The individual meets any other exceptional conditions as the Secretary may provide;

(3) The individual is 65 years old or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under §1894 of the Social Security Act, and there are circumstances similar to those described in §B(2) of this regulation that would permit discontinuance of the individual's enrollment with the PACE provider if the individual were enrolled in a Medicare Advantage plan;

(4) The individual:

(a) Is enrolled with:

(i) An eligible organization under a contract under §1876 of the federal Social Security Act (Medicare cost),

(ii) A similar organization to the organization described in §B(4)(a)(i) of this regulation operating under demonstration project authority, effective for periods before April 1, 1999,

(iii) An organization under an agreement under §1833(a)(1)(A) of the federal Social Security Act (health care prepayment plan), or

(iv) An organization under a Medicare Select policy; and

(b) Ceases to be enrolled under the same circumstances that would permit discontinuance of an individual's election of coverage under §B(2) of this regulation;

(5) The individual is enrolled under a Medicare supplement policy and the enrollment ceases because of:

(a) The insolvency of the issuer or bankruptcy of the nonissuer organization or other involuntary termination of coverage or enrollment under the policy;

(b) The issuer of the policy substantially violated a material provision of the policy; or

(c) The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;

(6) The individual:

(a) Was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time with:

(i) Any Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare,

(ii) Any eligible organization under a contract under §1876 of the federal Social Security Act (Medicare cost),

(iii) Any similar organization operating under demonstration project authority,

(iv) A Medicare Select policy, or

(v) Any Program of All-Inclusive Care for the Elderly (PACE) provider under §1894 of the Social Security Act; and

(b) Terminates the subsequent enrollment under §B(6)(a) of this regulation during any period within the first 12 months of the subsequent enrollment (during which the enrollee is permitted to terminate the subsequent enrollment under §1851(e) of the federal Social Security Act);

(7) The individual, upon first becoming enrolled in Part B of Medicare at 65 years old or older, enrolls in a Medicare Advantage plan under Part C of Medicare, or with a PACE provider under §1894 of the Social Security Act, and disenrolls from the plan or program by not later than 12 months after the effective date of enrollment; or

(8) The individual:

(a) Enrolls in a Medicare Part D plan during the initial enrollment period;

(b) At the time of enrollment in Part D:

(i) Was enrolled under a Medicare supplement policy that covers outpatient prescription drugs; and

(ii) Terminates enrollment in the Medicare supplement policy described in §B(8)(b)(i) of this regulation; and

(c) Submits evidence of enrollment in Medicare Part D with the application for a policy described in §E(5) of this regulation.

C. Guaranteed Issue Time Periods.

(1) The guaranteed issue period for an individual described in §B(1) of this regulation:

(a) Begins on the later of the date:

(i) The individual receives a notice of termination or cessation of all supplemental health benefits, or, if the individual does not receive the notice, the date the individual receives notice that a claim has been denied because of a termination or cessation of all supplemental health benefits; or

(ii) The applicable coverage terminates or ceases; and

(b) Ends 63 days after the beginning of the period described in §C(1)(a) of this regulation.

(2) The guaranteed issue period for an individual described in §B(2)—(4), (6), or (7) of this regulation whose enrollment is terminated involuntarily:

(a) Begins on the date that the individual receives a notice of termination; and

(b) Ends 63 days after the date the applicable coverage is terminated.

(3) The guaranteed issue period for an individual described in §B(5)(a) of this regulation:

(a) Begins on the earlier of:

(i) The date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other similar notice, if any; or

(ii) The date that the applicable coverage is terminated; and

(b) Ends on the date that is 63 days after the date the coverage is terminated.

(4) The guaranteed issue period for an individual described in §B(2), (3), (5)(b), (5)(c), (6), or (7) of this regulation, who disenrolls voluntarily:

(a) Begins on the date that is 60 days before the effective date of the disenrollment; and

(b) Ends on the date that is 63 days after the effective date.

(5) The guaranteed issue period for an individual described in §B(8) of this regulation:

(a) Begins on the date the individual receives notice pursuant to §1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period; and

(b) Ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.

(6) The guaranteed issue period for an individual described in §B of this regulation but not described in §C(1)—(5) of this regulation:

(a) Begins on the effective date of disenrollment; and

(b) Ends on the date that is 63 days after the effective date of disenrollment.

D. Extended Medigap Access for Interrupted Trial Periods.

(1) A subsequent enrollment of an individual described in §B(6) of this regulation shall be deemed to be a first time enrollment described in §B(6) of this regulation if both of the following are satisfied:

(a) The individual's enrollment with an organization or provider described in §B(6)(a) of this regulation is involuntarily terminated within the first 12 months of enrollment; and

(b) The individual enrolls with another organization or provider described in §B(6)(a) of this regulation without an intervening enrollment.

(2) A subsequent enrollment of an individual described in §B(7) of this regulation shall be deemed to be a first time enrollment described in §B(7) of this regulation if both of the following are satisfied:

(a) The individual's enrollment with a plan or in a program described in §B(7) of this regulation is involuntarily terminated within the first 12 months of enrollment; and

(b) The individual enrolls in another plan or program described in §B(7) of this regulation, without an intervening enrollment.

(3) For purposes of §B(6) and (7) of this regulation, an enrollment of an individual with an organization or provider described in §B(6)(a) of this regulation, or with a plan or in a program described in §B(7) of this regulation, may not be deemed to be a first time enrollment under this section after the 2-year period beginning on the date on which the individual first enrolled with the organization, provider, plan, or program.

E. Products to Which Eligible Individuals Are Entitled. The Medicare supplement policy to which eligible individuals are entitled under:

(1) §B(1)—(5) of this regulation is a Medicare supplement policy which has a benefit package classified as plan A, B, C, F, including F with a high deductible, K, or L offered by any issuer;

(2) Subject to §E(3) of this regulation, §B(6) of this regulation is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in §E(1) of this regulation;

(3) §B(6) of this regulation after December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy described in this subsection is:

(a) The policy available from the same issuer but modified to remove outpatient prescription drug coverage; or

(b) At the election of the policyholder, an A, B, C, F, including F with a high deductible, K, or L policy that is offered by any issuer;

(4) §B(7) of this regulation shall include any Medicare supplement policy offered by any issuer; and

(5) §B(8) of this regulation is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F, including F with a high deductible, K, or L, and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage.

F. Notification Provisions.

(1) At the time of an event described in §B of this regulation because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this section, and of the obligations of issuers of Medicare supplement policies under §A of this regulation.

(2) The notice required by §F(1) of this regulation shall be communicated contemporaneously with the notification of termination.

(3) At the time of an event described in §B of this regulation because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this section, and of the obligations of issuers of Medicare supplement policies under §A of this regulation.

(4) The notice required by §F(3) of this regulation shall be communicated within 10 working days of the issuer receiving notification of disenrollment.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.10 Standards for Claims Payment.

A. An issuer shall comply with §1882(c)(3) of the Social Security Act, as enacted by §4081(b)(2)(C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Public Law No. 100-203, by:

(1) Accepting a notice from a Medicare carrier on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice;

(2) Notifying the participating physician or supplier and the beneficiary of the payment determination;

(3) Paying the participating physician or supplier directly;

(4) Furnishing, at the time of enrollment, each enrollee with a card listing the policy name, number, and a central mailing address to which notices from a Medicare carrier may be sent;

(5) Paying user fees for claim notices that are transmitted electronically or otherwise; and

(6) Providing to the federal Secretary of Health and Human Services, at least annually, a central mailing address to which all claims may be sent by Medicare carriers.

B. The issuer shall certify to compliance with requirements set forth in §A of this regulation on the Medicare supplement insurance experience reporting form.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.11 Loss Ratio Standards and Refund or Credit of Premium.

A. Loss Ratio Standards.

(1) An issuer may not deliver or issue for delivery a Medicare supplement policy form or certificate in this State unless the policy form or certificate can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregate benefits, not including anticipated refunds or credits, provided under the policy form or certificate form:

(a) At least 75 percent of the aggregate amount of premiums earned in the case of group policies; or

(b) At least 65 percent of the aggregate amount of premiums earned in the case of individual policies.

(2) The aggregate benefits as determined in accordance with §A(1)(a) and (b) of this regulation shall be calculated on the basis of incurred claims experience, or incurred health care expenses when coverage is provided by a health maintenance organization on a service rather than reimbursement basis.

(3) Earned premiums for the period for which rates are computed shall be calculated in accordance with accepted actuarial principles and practices.

(4) Incurred health care expenses where coverage is provided by a health maintenance organization may not include:

(a) Home office and overhead costs;

(b) Advertising costs;

(d) Taxes;

(e) Capital costs;

(f) Administrative costs; or

(g) Claims processing costs.

(5) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this regulation when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards.

(6) For purposes of applying §A(1) of this regulation and Regulation .04C(3) of this chapter only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising, including both print and broadcast advertising, shall be considered to be individual policies.

(7) For policies issued before July 1, 1992, expected claims in relation to premiums shall meet the:

(a) Originally filed anticipated loss ratio when combined with the actual experience since inception;

(b) Appropriate loss ratio requirement from §A(1)(a) and (b) of this regulation when combined with actual experience beginning with April 1, 1996,

to date; and

(c) Appropriate loss ratio requirement from §A(1)(a) and (b) of this regulation over the entire future period for which the rates are computed to provide coverage.

B. Refund or Credit Calculation.

(1) An issuer shall collect and file with the Commissioner by May 31 of each year the data contained in the reporting form in Regulation .19 of this chapter for each type of standard Medicare supplement benefit plan.

(2) If, on the basis of the experience as reported, the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a Statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year shall be excluded.

(3) For purposes of this section, for policies or certificates issued before July 1, 1992, the issuer shall make the refund or credit calculation separately for all individual policies, including all group policies subject to an individual loss ratio standard when issued, combined and all other group policies combined for experience after April 1, 1996. The first report shall be due by May 31, 1998.

(4) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a de minimis level. The refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the federal Secretary of Health and Human Services, but may not be less than the average rate of interest for 13-week Treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based.

C. Annual Filing of Premium Rates.

(1) An issuer of Medicare supplement policies and certificates issued before or after the effective date of these regulations in this State shall file annually its rates, rating schedule, and supporting documentation including ratios of incurred losses to earned premiums by policy duration for approval by the Commissioner in accordance with the filing requirements and procedures required by the Commissioner. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice, using reasonable assumptions, that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third year loss ratio which is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than 3 years.

(2) As soon as practicable, but before the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement policies or certificates in this State shall file with the Commissioner in accordance with the applicable filing procedures of this State:

(a) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates; and

(b) Supporting documents as necessary to justify the adjustment which shall accompany the filing.

(3) An issuer shall make the premium adjustments which are necessary to produce an expected loss ratio under the policy or certificate to conform with minimum loss ratio standards for Medicare supplement policies in compliance with §A(1)(a) and (b) of this regulation and which are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates.

(4) A premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described in §C(3) of this regulation may not be made with respect to a policy at any time other than upon its renewal date or anniversary date.

(5) If an issuer fails to make premium adjustments acceptable to the Commissioner, the Commissioner may order premium adjustments, refunds, or premium credits considered necessary to achieve the loss ratio required by this regulation.

(6) Before the effective date of changes in Medicare benefits, every issuer of Medicare supplement policies or certificates in this State shall file with the Commissioner for approval appropriate riders, endorsements, or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements, or policy forms shall provide a clear description of the Medicare supplement benefits provided by the policy or certificate.

D. Public Hearings. The Commissioner may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before or after the effective date of these regulations if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished in a manner considered appropriate by the Commissioner.

Cross References

31.10.06.03B(4)

31.10.06.04F(1)

31.10.06.19

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.12 Permitted Compensation Arrangements.

A. An issuer or other entity may provide commission or other compensation to an agent or other representative for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation is not more than 200 percent of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period.

B. The commission or other compensation provided in subsequent renewal years shall be the same as that provided in the second year or period and shall be provided for not fewer than 5 renewal years.

C. If an existing Medicare supplement policy or certificate is replaced, an issuer or other entity may not provide compensation to its agents or other producers and an agent or producer may not receive compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates.

D. For purposes of this regulation, “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including bonuses, gifts, prizes, awards, and finders fees.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.13 Required Disclosure Provisions.

A. Definitions.

(1) In this regulation, the following terms have the meanings indicated.

(2) Terms Defined.

(a) “Form” means the language, format, type size, type proportional spacing, bold character, and line spacing.

(b) “Guide” means the Guide to Health Insurance for People with Medicare.

B. General Rules.

(1) Medicare supplement policies and certificates shall include a renewal or continuation provision. The language or specifications of this provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy, and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder's age.

(2) Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after the date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured. After the date of the policy or certificate issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage are required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy.

(3) Medicare supplement policies or certificates may not provide for the payment of benefits based on standards described as “usual and customary”, “reasonable and customary”, or words of similar import.

(4) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, these limitations shall appear as a separate paragraph of the policy and be labeled “preexisting condition limitations”.

(5) Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate or attached to it stating in substance that the policyholder or certificate holder shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.

(6) Guide to Health Insurance for People With Medicare.

(a) Issuers of health policies or certificates that provide hospital or medical expense coverage on an expense-incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services.

(b) The Guide shall be printed in a type size not smaller than 12-point type.

(c) Delivery of the Guide shall be made whether or not the policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this chapter.

(d) Except in the case of direct response issuers, issuers shall:

(i) Deliver the Guide to the applicant at the time of application; and

(ii) Obtain acknowledgement of receipt of the Guide.

(e) Direct response issuers shall deliver the Guide to the applicant upon request, but not later than at the time the policy is delivered.

C. Notice Requirements.

(1) As soon as practicable, but not later than 30 days before the annual effective date of any Medicare benefit changes, an issuer shall notify its Medicare supplement policyholders and certificate holders of modifications the insurer has made to Medicare supplement insurance policies or certificates in a format acceptable to the Commissioner. The notice shall:

(a) Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and

(b) Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare.

(2) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension.

(3) The notice may not contain or be accompanied by a solicitation.

D. MMA Notice Requirements. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).

E. Outline of Coverage Requirements for Medicare Supplement Policies.

(1) Issuers shall provide an outline of coverage to all applicants at the time the application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgement of receipt of the outline from the applicant.

(2) If an outline of coverage is provided at the time of application and the Medicare supplement policy or certificate is issued on a basis which would require revision of the outline, the issuer shall provide the applicant with a substitute outline of coverage properly describing the policy or certificate which is delivered. The substitute outline of coverage shall contain the following statement in not less than 12-point type, immediately above the company name:

“NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued.”

(3) Outline of Coverage.

(a) The outline of coverage provided to applicants in accordance with this regulation consists of four parts:

(i) A cover page;

(ii) Premium information;

(iii) Disclosure pages; and

(iv) Charts displaying the features of each benefit plan offered by the issuer.

(b) The outline of coverage for 2010 standardized Medicare supplement benefit plan policies or certificates shall be in the language and format described in Regulation .30 of this chapter in not less than 12-point type.

(c) All plans shall be shown on the cover page, and the plans that are offered by the issuer shall be prominently identified.

(d) Premium information for plans that are offered shall be shown on the cover page or immediately following the cover page and shall be prominently displayed.

(e) The premium and mode shall be stated for all plans that are offered to the prospective applicant.

(f) All possible premiums for the prospective applicant shall be illustrated.

F. Notice Regarding Policies or Certificates Which Are Not Medicare Supplement Policies.

(1) Any health insurance policy or certificate, other than a Medicare supplement policy, or a policy issued pursuant to a contract under §1876 of the federal Social Security Act (42 U.S.C. §1395 et seq.), disability income policy, or other policy identified in Regulation .01C of this chapter, issued for delivery in this State to persons eligible for Medicare shall contain a notice to insureds under the policy that the policy is not a Medicare supplement policy or certificate. The notice shall either be printed or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy or certificate delivered to the insureds. The notice shall be in not less than 12-point type and contain the following language.

“THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT POLICY OR CONTRACT. If you are eligible for Medicare, review the Guide to Health Insurance for People With Medicare available from the company.”

(2) Disclosure Statements.

(a) Applications provided to persons eligible for Medicare for the health insurance policies or certificates described in §F(1) of this regulation shall disclose, using the applicable statement in Regulation .22 of this chapter, the extent to which the policy duplicates Medicare.

(b) The disclosure statement required by §F(2)(a) of this regulation shall be provided as a part of, or together with, the application for the policy or certificate.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.14 Requirements for Application Forms and Replacement Coverage.

A. Required Questions in Medicare Supplement Applications.

(1) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medicaid coverage, or another health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate presently in force.

(2) A supplementary application or other form to be signed by the applicant and insurance producer containing these questions and statements may be used.

{Statements}

(1) You do not need more than one Medicare supplement policy.

(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.

(3) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy.

(4) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing Medicaid eligibility. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(5) If you are eligible for, and have enrolled in a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.

(6) Counseling services may be available in your state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the State Medicaid program, including benefits as a Qualified Medicare Beneficiary (QMB) and a Specified Low-Income Medicare Beneficiary (SLMB).

{Questions}

If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS.

{Please mark Yes or No below with an “X”}

To the best of your knowledge,

(1)(a) Did you turn age 65 in the last 6 months?

(a) Did you turn age 65 in the last 6 months?

Yes ____ No ____

(b) Did you enroll in Medicare Part B in the last 6 months?

Yes ____ No ____

(2) Are you covered for medical assistance through the State Medicaid program?

(NOTE TO APPLICANT: If you are participating in a “Spend-Down Program” and have not met your “Share of Cost,” please answer NO to this question.)

Yes ____ No ____

If yes,

(a) Will Medicaid pay your premiums for this Medicare supplement policy?

Yes ____ No ____

(b) Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium?

Yes ____ No ____

(3)(a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank.

(a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank.

START //__ END //__

(b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy?

Yes ____ No ____

(d) Did you drop a Medicare supplement policy to enroll in the Medicare plan?

Yes ____ No ____

(4)(a) Do you have another Medicare supplement policy in force?

(a) Do you have another Medicare supplement policy in force?

Yes ____ No ____

(b) If so, with what company, and what plan do you have {optional for Direct Mailers}?

Yes ____ No ____

(5) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan)

Yes ____ No ____

(a) If so, with what company and what kind of policy?

(b) What are your dates of coverage under the other policy?

START ///__ END //__

(If you are still covered under the other policy, leave “END” blank.)

B. Agents shall list any other health insurance policies they have sold to the applicant.

(1) List policies sold which are still in force.

(2) List policies sold in the past five (5) years which are no longer in force.

C. In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the insurer, shall be returned to the applicant by the insurer upon delivery of the policy.

D. Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage.

E. The notice required by §D of this regulation for an issuer shall be provided in substantially the following form in not less than 12-point type:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE SUPPLEMENT INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to terminate existing Medicare supplement or Medicare Advantage insurance and replace it with a policy to be issued by (Company Name) Insurance Company. Your new policy will provide thirty (30) days within which you may decide without cost whether you desire to keep the policy.

You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision, you should terminate your present Medicare supplement or Medicare Advantage coverage. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.

STATEMENT TO APPLICANT BY ISSUER, AGENT {BROKER OR OTHER REPRESENTATIVE}:

I have reviewed your current medical or health insurance coverage. To the best of my knowledge, this Medicare supplement policy will not duplicate your existing Medicare supplement or, if applicable, Medicare Advantage coverage because you intend to terminate your existing Medicare supplement coverage or leave your Medicare Advantage plan. The replacement policy is being purchased for the following reason (check one):

____ Additional benefits.

____ No change in benefits, but lower premiums.

____ Fewer benefits and lower premiums.

____ My plan has outpatient prescription drug coverage and I am enrolling in Part D.

____ Disenrollment from a Medicare Advantage plan. Please explain reason for disenrollment (optional only for Direct Mailers)

____ Other (please specify)

Note: If the issuer of the Medicare supplement policy being applied for does not, or is otherwise prohibited from imposing preexisting condition limitations, please skip to statement 2 below. Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.
State law provides your replacement policy or certificate may not contain new preexisting conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy.
If you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical and health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. (If the policy or certificate is guaranteed issue, this paragraph need not appear.)

Do not cancel your present policy until you have received your new policy and are sure that you want to keep it.

(Signature of Agent, Broker, or Other Representative)*

(Typed Name and Address of Issuer, Agent, or Broker)

(Applicant's Signature)

(Date)

*Signature not required for direct response sales.

F. Paragraphs 1 and 2 of the replacement notice (applicable to preexisting conditions) may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.15 Standards for Marketing.

A. An issuer, directly or through its producers, shall:

(1) Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate;

(2) Establish marketing procedures to assure that excessive insurance is not sold or issued;

(3) Display prominently by type, stamp, or other appropriate means on the first page of the policy the following: “Notice to buyer: This policy may not cover all of your medical expenses.”;

(4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has health insurance and the types and amounts of any insurance;

(5) Establish auditable procedures for verifying compliance with this section.

B. In addition to the practices prohibited in Insurance Article, Title 27, Annotated Code of Maryland, the following acts and practices are prohibited:

(1) Twisting: Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer;

(2) High pressure tactics: Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance;

(3) Cold lead advertising: Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

C. The terms “Medicare Supplement”, “Medigap”, “Medicare Wrap-Around”, and words of similar import may not be used unless the policy is issued in compliance with these regulations.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.16 Appropriateness of Recommended Purchase and Excessive Insurance.

A. In recommending the purchase or replacement of any Medicare supplement policy or certificate an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

B. Any sale of a Medicare supplement policy or certificate that will provide an individual more than one Medicare supplement policy or certificate is prohibited.

C. An issuer may not issue a Medicare supplement policy or certificate to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual's Part C coverage.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.17 Report of Multiple Policies.

A. On or before March 1 of each year, an issuer shall report the following information for every individual resident of this State for which the issuer has in force more than one Medicare supplement policy or certificate:

(1) Policy or certificate number; and

(2) Date of issuance.

B. The items set forth in §A of this regulation shall be grouped by individual policyholder.

Cross References

31.10.06.20

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.18 Prohibition Against Preexisting Conditions, Waiting Periods, Elimination Periods, and Probationary Periods in Replacement Policies or Certificates.

A. If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new Medicare supplement policy or certificate to the extent time was spent under the original policy.

B. If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate which has been in effect for at least 6 months, the replacing policy may not provide any time period applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.19 Report Form for Calculation of Loss Ratios.

The following forms are to be used for reporting loss ratios and calculating refunds for credits required under Regulation .11B of this chapter:

A. Medicare Supplement Refund Calculation Form.

| MEDICARE SUPPLEMENT REFUND CALCULATION FORM FOR CALENDAR YEAR _____ | | | --- | --- | | TYPE¹___________________________________ | SMSBP²_______________________________________ | | For the State of____________________________ | Company Name ________________________________ | | NAIC Group Code _________________________ | NAIC Company Code ___________________________ | | Address ________________________________ | Person Completing This Exhibit ____________________ | | Title ___________________________________ | Telephone Number _____________________________ |

| line | | (a) Earned Premium³ | (b) Incurred Claims⁴ | | --- | --- | --- | --- | | 1 | Current Year's Experience | | | | | a. Total (all policy years) | | | | | b. Current year's issues⁵ | | | | | c. Net (for reporting purposes = 1a - 1b) | ____________ | ____________ | | 2 | Past Years' Experience | | | | | (All Policy Years) | ____________ | ____________ | | 3 | Total Experience (Net Current Year + Past Years' Experience) | ____________ | ____________ | | 4 | Refunds last year (Excluding Interest) | | | | 5 | Previous Since Inception (Excluding Interest) | | | | 6 | Refunds Since Inception (Excluding Interest) | | | | 7 | Benchmark Ratio Since Inception (SEE WORKSHEET FOR RATIO 1) | | | | 8 | Experienced Ratio Since Inception (Ratio 2) | | | | | Total Actual Incurred Claims (line 3, col b) Tot. Earned Prem. (line 3, col a) - Refunds Since Inception (line 6) | ____________ | | | 9 | Life years Exposed Since Inception | ____________ | | | | If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund. | | | | 10 | Tolerance Permitted (obtained from credibility table) | ____________ | |

| line | | | | | --- | --- | --- | --- | | 11 | Adjustments to Incurred Claims for Credibility | | | | | Ratio 3 = Ratio 2 + Tolerance | ____________ | | | | If Ratio 3 is more than benchmark ratio (ratio 1), a refund or credit to premium is not required. | | | | | If Ratio 3 is less than the benchmark ratio, then proceed. | | | | 12 | Adjusted Incurred Claims/ | | | | | {Tot. Earned Premiums (line 3, col. a) - Refunds Since Inception (line 6)} x Ratio 3 (line 11) | ____________ | | | 13 | Refund = Total Earned Premiums (line 3, col a) - Refunds Since Inception (line 6) - {Adjusted Incurred Claims (line 12)/ Benchmark Ratio (Ratio 1) } | ____________ | | | | If the amount on line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund or credit against premiums to be used must be attached to this form. | | | | | Medicare Supplement Credibility Table | | | | | Life Years Exposed Since Inception | Tolerance | | | | 10,000 + | 0.0% | | | | 5,000—9,999 | 5.0% | | | | 2,500—4,999 | 7.5% | | | | 1,000—2,499 | 10.0% | | | | 500—999 | 15.0% | | | | If less than 500, no credibility. | | |

¹ Individual, Group, Individual Medicare Select, or Group Medicare Select Only

² “SMSBP” = Standardized Medicare Supplement Benefit Plan—Use “P” for prestandarized plans

³ Includes modal loadings and fees charged.

⁴ Excludes Active Life Reserves

⁵ This is to be used as “Issue Year Earned Premium” for Year 1 of next year's “Worksheet for Calculation of Benchmark Ratios”

I certify that the above information and calculations are true and accurate to the best of my knowledge and belief.

Signature

Name-Please Type

Title-Please Type

Date

B. Reporting Form for Benchmark Ratio for Group Policies.

| REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES FOR CALENDAR YEAR ________ | | | --- | --- | | TYPE¹___________________________________ | SMSBP²_______________________________________ | | For the State of____________________________ | Company Name ________________________________ | | NAIC Group Code _________________________ | NAIC Company Code ___________________________ | | Address ________________________________ | Person Completing This Exhibit ____________________ | | Title ___________________________________ | Telephone Number _____________________________ |

| (a)³ | (b)⁴ | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (o)⁵ | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Year | Earned Premium | Factor | (b) × (c) | Cumulative Loss Ratio | (d) × (e) | Factor | (b) × (g) | Cumulative Loss Ratio | (h) × (i) | Policy Year Loss Ratio | | 1 | | 2.770 | | 0.507 | | 0.000 | | 0.000 | | 0.46 | | 2 | | 4.175 | | 0.567 | | 0.000 | | 0.000 | | 0.63 | | 3 | | 4.175 | | 0.567 | | 1.194 | | 0.759 | | 0.75 | | 4 | | 4.175 | | 0.567 | | 2.245 | | 0.771 | | 0.77 | | 5 | | 4.175 | | 0.567 | | 3.170 | | 0.782 | | 0.8 | | 6 | | 4.175 | | 0.567 | | 3.998 | | 0.792 | | 0.82 | | 7 | | 4.175 | | 0.567 | | 4.754 | | 0.802 | | 0.84 | | 8 | | 4.175 | | 0.567 | | 5.445 | | 0.811 | | 0.87 | | 9 | | 4.175 | | 0.567 | | 6.075 | | 0.818 | | 0.88 | | 10 | | 4.175 | | 0.567 | | 6.650 | | 0.824 | | 0.88 | | 11 | | 4.175 | | 0.567 | | 7.176 | | 0.828 | | 0.88 | | 12 | | 4.175 | | 0.567 | | 7.655 | | 0.831 | | 0.88 | | 13 | | 4.175 | | 0.567 | | 8.093 | | 0.834 | | 0.89 | | 14 | | 4.175 | | 0.567 | | 8.493 | | 0.837 | | 0.89 | | 15+⁶ | | 4.175 | | 0.567 | | 8.684 | | 0.838 | | 0.89 | | | | | ________ | | ________ | | ________ | | ________ | | | Total: | | (k): | | (l): | | (m): | | (n): | | |

Benchmark Ratio Since Inception: (l + n)/(k + m):

¹Individual, Group, Individual Medicare Select, or Group Medicare Select Only.

²“SMSBP” = Standardized Medicare Supplement Benefit Plan—Use “P” for pre-standardized plans

³Year 1 is the current year - 1. Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then Year 1 is 1990; Year 2 is 1989, etc.)

⁴For the calendar year on the appropriate line in column(a), the premium earned during that year for policies issued in that year.

⁵These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.

⁶To include the earned premium for all years prior to as well as the 15th year prior to the current year.

C. Reporting Form for Benchmark Ratio for Individual Policies.

| REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES FOR CALENDAR YEAR ________ | | | --- | --- | | TYPE¹___________________________________ | SMSBP²_______________________________________ | | For the State of____________________________ | Company Name ________________________________ | | NAIC Group Code _________________________ | NAIC Company Code ___________________________ | | Address ________________________________ | Person Completing This Exhibit ______________________________________________ | | Title ___________________________________ | Telephone Number _____________________________ |

Benchmark Ratio Since Inception: (l + n)/(k + m):

¹Individual, Group, Individual Medicare Select, or Group Medicare Select Only.

²“SMSBP” = Standardized Medicare Supplement Benefit Plan—Use “P” for prestandardized plans

³Year 1 is the current year - 1. Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then Year 1 is 1990; Year 2 is 1989, etc.)

⁴For the calendar year on the appropriate line in column(a), the premium earned during that year for policies issued in that year.

⁶To include the earned premium for all years prior to as well as the 15th year prior to the current year.

Cross References

31.10.06.11B(1)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.20 Form for Reporting Multiple Policies.

The following form is to be used in making reports of multiple policies in accordance with the requirements of Regulation .17 of this chapter:

| (a)³ | (b)⁴ | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (o)⁵ | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Year | Earned Premium | Factor | (b) × (c) | Cumulative Loss Ratio | (d) × (e) | Factor | (b) × (g) | Cumulative Loss Ratio | (h) × (i) | Policy Year Loss Ratio | | 1 | | 2.770 | | 0.442 | | 0.000 | | 0.000 | | 0.4 | | 2 | | 4.175 | | 0.493 | | 0.000 | | 0.000 | | 0.55 | | 3 | | 4.175 | | 0.493 | | 1.194 | | 0.659 | | 0.65 | | 4 | | 4.175 | | 0.493 | | 2.245 | | 0.669 | | 0.67 | | 5 | | 4.175 | | 0.493 | | 3.170 | | 0.678 | | 0.69 | | 6 | | 4.175 | | 0.493 | | 3.998 | | 0.686 | | 0.71 | | 7 | | 4.175 | | 0.493 | | 4.754 | | 0.695 | | 0.73 | | 8 | | 4.175 | | 0.493 | | 5.445 | | 0.702 | | 0.75 | | 9 | | 4.175 | | 0.493 | | 6.075 | | 0.708 | | 0.76 | | 10 | | 4.175 | | 0.493 | | 6.650 | | 0.713 | | 0.76 | | 11 | | 4.175 | | 0.493 | | 7.176 | | 0.717 | | 0.76 | | 12 | | 4.175 | | 0.493 | | 7.655 | | 0.720 | | 0.77 | | 13 | | 4.175 | | 0.493 | | 8.093 | | 0.723 | | 0.77 | | 14 | | 4.175 | | 0.493 | | 8.493 | | 0.725 | | 0.77 | | 15+⁶ | | 4.175 | | 0.493 | | 8.684 | | 0.725 | | 0.77 | | | | | ________ | | ________ | | ________ | | ________ | | | Total: | | (k): | | (l): | | (m): | | (n): | | |

The purpose of this form is to report the following information on each resident of this state who has in force more than one Medicare supplement policy or certificate. The information is to be grouped by individual policyholder.

| FORM FOR REPORTING MEDICARE SUPPLEMENT POLICIES | | | --- | --- | | Company name: | ________________________________________ | | Address: | ________________________________________ | | | ________________________________________ | | Phone Number: | ________________________________________ | | | Due: March 1, annually |

| Policy and Certificate # | Date of Issuance | | --- | --- | | | | | | | | | | | | |

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.21 Severability.

If any regulations of this chapter or the application of these regulations to any person or circumstance is for any reason held to be invalid, the remainder of the chapter and the application of the regulations to other persons or circumstances may not be affected.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.22 Disclosure Statements.

A. Instructions.

Instructions for Use of the Disclosure Statements for Health Insurance Policies Sold to Medicare Beneficiaries that Duplicate Medicare

(1) Section 1882(d) of the federal Social Security Act (42 U.S.C. 1395ss) prohibits the sale of a health insurance policy (the term policy includes certificate) to Medicare beneficiaries that duplicates Medicare benefits unless it will pay benefits without regard to a beneficiary's other health coverage and it includes the prescribed disclosure statement on or together with the application for the policy.

(2) All types of health insurance policies that duplicate Medicare shall include one of the attached disclosure statements, according to the particular policy type involved, on the application or together with the application. The disclosure statement may not vary from the attached statements in terms of language or format (type size, type proportional spacing, bold character, line spacing, and usage of boxes around text).

(3) State and federal law prohibits insurers from selling a Medicare supplement policy to a person that already has a Medicare supplement policy except as a replacement.

(4) Property/casualty and life insurance policies are not considered health insurance.

(5) Disability income policies are not considered to provide benefits that duplicate Medicare.

(6) Long-term care insurance policies that coordinate with Medicare and other health insurance are not considered to provide benefits that duplicate Medicare.

(7) The federal law does not preempt state laws that are more stringent than the federal requirements.

(8) The federal law does not preempt existing state form filing requirements.

(9) Section 1882 of the federal Social Security Act was amended in subsection (d)(3)(A) to allow for alternative disclosure statements. The disclosure statements already in §B of this regulation remain. Carriers may use either disclosure statement with the requisite insurance product. However, carriers shall use either the original disclosure statements or the alternative disclosure statements and not use both simultaneously.

(10) Insurers shall use the disclosure statements found in §§B and C of this regulation if the disclosure statement was printed before January 1, 2006.

B. Original Disclosure Statements.

(1) Accidental Injury Only Policies. The following is an original disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses that result from accidental injury. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when it pays:

• hospital or medical expenses up to the maximum stated in the policy

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(2) Specified Limited Services Policies. The following is an original disclosure statement for policies that provide benefits for specified limited services:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance provides limited benefits, if you meet the policy conditions, for expenses relating to the specific services listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when :

• any of the services covered by the policy are also covered by Medicare

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(3) Expense Incurred Specified Disease Policies. The following is an original disclosure statement for policies that reimburse expenses incurred for specified disease(s) or other specified impairment(s). This includes expense incurred cancer, specified disease and other types of health insurance policies that limit reimbursement to named medical conditions.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses only when you are treated for one of the specific diseases or health conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when it pays:

• hospital or medical expenses up to the maximum stated in the policy

Medicare generally pays for most or all of these expenses .

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(4) Fixed Dollar Specified Disease Policies. The following is an original disclosure statement for policies that pay fixed dollar amounts for specified diseases or other specified impairments. This includes cancer, specified disease, and other health insurance policies that pay a scheduled benefit or specific payment based on diagnosis of the conditions named in the policy.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance pays a fixed amount, regardless of your expenses, if you meet the policy conditions, for one of the specific diseases or health conditions named in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits because Medicare generally pays for most of the expenses for the diagnosis and treatment of the specific conditions or diagnoses named in the policy.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(5) Policies Providing Both Expense Incurred and Fixed Indemnity Benefits. The following is an Original disclosure statement for policies that provide benefits for both expenses incurred and fixed indemnity basis:

| IMPORTANT NOTICE TO PERSONS ON MEDICARETHIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance pays limited reimbursement for expenses if you meet the conditions listed in the policy. It also pays a fixed amount, regardless of your expenses, if you meet other policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when:

• any expenses or services covered by the policy are also covered by Medicare; or

• it pays the fixed dollar amount stated in the policy and Medicare covers the same event

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include :

• hospitalization

• physician services

• hospice care

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(6) Policies Providing Fixed Dollar Benefits. The following is an original disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance pays a fixed dollar amount, regardless of your expenses, for each day you meet the policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when:

• any expenses or services covered by the policy are also covered by Medicare

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(7) Other Health Insurance Policies. The following is an original disclosure statement for other health insurance policies not specifically identified in the previous statements:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance provides limited benefits if you meet the conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

This insurance duplicates Medicare benefits when it pays:

• the benefits stated in the policy and coverage for the same event is provided by Medicare

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

C. Alternative Disclosure Statements.

(1) Accidental Injury Only Policies. The following is an alternative disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(2) Specified Limited Services Policies. The following is an alternative disclosure statement for policies that provide benefits for specified limited services:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.

This insurance provides limited benefits, if you meet the policy conditions, for expenses relating to specific services listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare supplement insurance.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(3) Expense Incurred Specified Disease Policies. The following is an alternative disclosure statement for policies that reimburse expenses incurred for specified diseases or other specified impairments. This includes expense-incurred cancer, specified disease, and other types of health insurance policies that limit reimbursement to named medical conditions.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy. Medicare generally pays for most or all of these expenses.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(4) Fixed Dollar Specified Disease Policies. The following is an alternative disclosure statement for policies that pay fixed dollar amounts for specified diseases or other specified impairments. This includes cancer, specified disease, and other health insurance policies that pay a scheduled benefit or specific payment based on diagnosis of the conditions named in the policy.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(5) Policies Providing Both Expense Incurred and Fixed Indemnity Benefits. The following is an alternative disclosure statement for policies that provide benefits upon both an expense-incurred and fixed indemnity basis:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice care

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(6) Policies Providing Only Fixed Dollar Benefits. The following is an alternative disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

(7) Other Health Insurance Policies. The following is an alternative disclosure statement for other health insurance policies not specifically identified in the preceding statements:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state senior insurance counseling program.

Cross References

31.10.06.13F(2)(a)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.23 Disclosure Statements Printed After December 31, 2005.

A. Instructions.

(1) The instructions found in Regulation .22A(1)—(8) of this chapter also apply to the disclosure statements printed after December 31, 2005.

(2) Use of Original or Alternative Disclosure Statements.

(a) Section 1882 of the federal Social Security Act was amended in Subsection (d)(3)(A) to allow for alternative disclosure statements.

(b) Carriers may use either disclosure statement with the requisite insurance product.

(c) Carriers shall use either the original disclosure statements or the alternative disclosure statement, but not both simultaneously.

B. Insurers shall use the disclosure statements found in §§C and D of this regulation if the disclosure statements were printed after December 31, 2005.

C. Original Disclosure Statements.

(1) Accidental Injury Only Policies. The following is an original disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when it pays:

• hospital or medical expenses up to the maximum stated in the policy

Medicare generally pays for most or all of these expenses .

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(2) Specified Limited Services Policies. The following is an original disclosure statement for policies that provide benefits for specified limited services:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when:

• any of the services covered by the policy are also covered by Medicare

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(3) Expense Incurred Specified Disease Policies. The following is an original disclosure statement for policies that reimburse expenses incurred for specified diseases or other specified impairments. This includes expense-incurred cancer, specified disease, and other types of health insurance policies that limit reimbursement to named medical conditions.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when it pays:

• hospital or medical expenses up to the maximum stated in the policy

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include :

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This insurance duplicates Medicare benefits because Medicare generally pays for most of the expenses for the diagnosis and treatment of the specific conditions or diagnoses named in the policy.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(5) Policies Providing Fixed Dollar Benefits. The following is an original disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when:

• any expenses or services covered by the policy are also covered by Medicare

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include :

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(6) Policies Providing Both Expense Incurred and Fixed Indemnity Benefits. The following is an original disclosure statement for policies that provide benefits upon both an expense-incurred and fixed indemnity basis:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when:

• any expenses or services covered by the policy are also covered by Medicare; or

• it pays the fixed dollar amount stated in the policy and Medicare covers the same event

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(7) Other Health Insurance Policies. The following is an original disclosure statement for other health insurance policies not specifically identified in the statements set forth in §C(1)-6) of this regulation:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS INSURANCE DUPLICATES SOME MEDICARE BENEFITS | | --- |

This is not Medicare Supplement Insurance

This insurance duplicates Medicare benefits when it pays:

• the benefits stated in the policy and coverage for the same event is provided by Medicare

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

D. Alternative Disclosure Statements.

(1) Accidental Injury Only Policies. The following is an alternative disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only:

| IMPORTANT NOTICE TO PERSONS ON MEDICARETHIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(2) Specified Limited Services Policies. The following is an alternative disclosure statement for policies that provide benefits for specified limited services:

| IMPORTANT NOTICE TO PERSONS ON MEDICARETHIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(3) Expense-Incurred Specified Disease Policies. The following is an alternative disclosure statement for policies that reimburse expenses incurred for specified diseases, or other specified impairments. This includes expense-incurred cancer, specified disease, and other types of health insurance policies that limit reimbursement to named medical conditions.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy. Medicare generally pays for most or all of these expenses.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(5) Policies Providing Only Fixed Dollar Benefits. The following is an alternative disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies:

| IMPORTANT NOTICE TO PERSONS ON MEDICARE THIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(6) Policies Providing Both Expense-Incurred and Fixed Indemnity Benefits. The following is an alternative disclosure statement for policies that provide benefits upon both an expense-incurred and fixed indemnity basis:

| IMPORTANT NOTICE TO PERSONS ON MEDICARETHIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

(7) Other Health Insurance Policies. The following is an alternative disclosure statement for other health insurance policies not specifically identified in the statements set forth in §D(1)-(6) of this regulation:

| IMPORTANT NOTICE TO PERSONS ON MEDICARETHIS IS NOT MEDICARE SUPPLEMENT INSURANCE | | --- |

Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.

Medicare generally pays for most or all of these expenses.

Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:

• hospitalization

• physician services

• hospice

• outpatient prescription drugs if you are enrolled in Medicare Part D

• other approved items and services

This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.

| Before You Buy This Insurance | | --- |

✓ Check the coverage in all health insurance policies you already have.

✓ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.

✓ For help in understanding your health insurance, contact your state insurance department or state health insurance assistance program {SHIP}.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.24 Medicare Select Policies and Certificates — General Requirements.

A. Applicability.

(1) This regulation applies to Medicare Select policies and certificates, as defined in Regulation .02 of this chapter.

(2) A policy or certificate may not be advertised as a Medicare Select policy or certificate unless it meets the requirements of this regulation.

B. The Commissioner may authorize an issuer to offer a Medicare Select policy or certificate pursuant to this regulation and §4358 of the Omnibus Budget Reconciliation Act (OBRA) of 1990 if the Commissioner finds that the issuer has satisfied all of the requirements of this regulation.

C. A Medicare Select issuer may not issue a Medicare Select policy or certificate in Maryland until its plan of operation has been approved by the Commissioner.

D. Required Filing of Plan of Operation.

(1) A Medicare Select issuer shall file a proposed plan of operation with the Commissioner and with the Secretary of the Maryland Department of Health in a format prescribed by the Commissioner.

(2) The plan of operation filed with the Commissioner shall contain at least the following information:

(a) A statement or map providing a clear description of the service area;

(b) A description of the grievance procedure to be utilized;

(c) Copies of the written information proposed to be used by the issuer to comply with Regulation .25B of this chapter; and

(d) Any other information requested by the Commissioner.

(3) The plan of operation filed with the the Secretary of the Maryland Department of Health shall contain, at a minimum, the following information:

(a) Evidence that all covered services subject to restricted network provisions are available and accessible through network providers, including a demonstration that:

(i) Services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation, and after-hours care;

(ii) The number of network providers in the service area is sufficient, with respect to current and expected policyholders, either to deliver adequately all services that are subject to a restricted network provision or to make appropriate referrals;

(iii) There are written agreements with network providers describing specific responsibilities;

(iv) Emergency care is available 24 hours per day and 7 days per week; and

(v) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate;

(b) A statement or map providing a clear description of the service area;

(i) The formal organizational structure;

(ii) The written criteria for selection, retention and removal of network providers; and

(iii) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action if warranted; and

(d) A list and description, by specialty, of the network providers.

(4) In determining the reasonable promptness of services provided with respect to geographic location in §D(3)(a)(i) of this regulation, the geographic availability shall reflect the usual travel times within the community.

(5) In determining the reasonable promptness of services provided with respect to hours of operation and after-hours care in §D(3)(a)(i) of this regulation, the hours of operation and availability of after-hours care shall reflect usual practice in the local area.

(6) With respect to the requirements in §D(3)(a)(v) of this regulation that prohibit providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate, the prohibition is not required to be applied to supplemental charges or coinsurance amounts stated in the Medicare Select policy or certificate.

(7) The Secretary of the Maryland Department of Health shall notify the Commissioner in writing after the determining that the plan of operation filed by the issuer is acceptable.

E. Required Filing of Changes to Plan of Operation.

(1) In General.

(a) A Medicare Select issuer shall file with the Commissioner any proposed changes to the plan of operation, except for changes to the list of network providers, prior to implementing the changes.

(b) Changes shall be deemed approved by the Commissioner after 30 days unless specifically disapproved.

(2) A Medicare Select issuer shall file an updated list of network providers with the Secretary of the Maryland Department of Health at least quarterly.

(3) The Secretary of the Maryland Department of Health shall notify the Commissioner in writing if the updated list of providers submitted in accordance with §E(2) of this regulation ceases to meet the criteria set forth in §D(3)(a) of this regulation.

F. A Medicare Select policy or certificate may not restrict payment for covered services provided by nonnetwork providers if:

(1) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or condition; and

(2) It is not reasonable to obtain services through a network provider.

G. A Medicare Select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers.

H. A Medicare Select issuer shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select Program.

Cross References

31.10.06.09D

31.10.06.28E

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.25 Medicare Select — Consumer Protection.

A. Applicability.

(1) This regulation shall apply to Medicare Select policies and certificates, as defined in Regulation .02 of this chapter.

(2) A policy or certificate may not be advertised as a Medicare Select policy or certificate unless it meets the requirements of this regulation.

B. Required Disclosure.

(1) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare Select policy or certificate to each applicant.

(2) The disclosure required by §B(1) of this regulation shall include at least the following:

(a) An outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with:

(i) Other Medicare supplement policies or certificates offered by the issuer; and

(ii) Other Medicare Select policies or certificates;

(b) A description, including address, phone number, and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals, and other providers;

(c) A description of the restricted network provisions, including payments for coinsurance and deductibles if providers other than network providers are utilized;

(d) A description of coverage for emergency and urgently needed care and other out-of-service-area coverage;

(e) A description of limitations on referrals to restricted network providers and to other providers;

(f) A description of the policyholder's rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer; and

(g) A description of the Medicare Select issuer's quality assurance program and grievance procedure.

(3) With regard to the description of restricted network provisions required by §B(2)(c) of this regulation, expenses incurred when using out-of-network providers may not count toward the out-of-pocket annual limit contained in plans K and L, except to the extent specified in the policy or certificate.

C. Before the sale of a Medicare Select policy or certificate, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided under §B of this regulation and that the applicant understands the restrictions of the Medicare Select policy or certificate.

D. Complaints and Grievances.

(1) Procedures Required.

(a) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the subscribers.

(b) The procedures for hearing complaints and resolving written grievances from subscribers shall be aimed at mutual agreement for settlement.

(2) The grievance procedure shall be described in the policy and certificates and in the outline of coverage.

(3) Any grievance procedure involving coverage decisions shall comply with the requirements found in Insurance Article, Title 15, Subtitle 10D, Annotated Code of Maryland.

(4) Any grievance procedure involving adverse decisions shall comply with the requirements found in Insurance Article, Title 15, Subtitle 10A, Annotated Code of Maryland.

(5) At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.

(6) An issuer shall consider grievances in a timely manner and shall transmit the grievances to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.

(7) If a grievance is found to be valid, an issuer shall take corrective action promptly.

(8) An issuer shall notify all concerned parties about the results of a grievance.

(9) Annual Report.

(a) The issuer shall report not later than March 31 of each year to the Commissioner regarding its grievance procedure.

(b) The report required by §D(9)(a) of this regulation shall be in a format prescribed by the Commissioner and shall contain the number of grievances filed in the past year and a summary of the subject, nature, and resolution of the grievances.

E. At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.

F. Right to Purchase Medicare Supplement Policy or Certificate.

(1) At the request of an individual insured under a Medicare Select policy or certificate, a Medicare Select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer which has comparable or lesser benefits and which does not contain a restricted network provision.

(2) The issuer shall make available the policies or certificates described in §F(1) of this regulation without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for 6 months.

(3) For the purposes of §F(1) of this regulation, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless the Medicare supplement policy or certificate contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced.

(4) A benefit shall be considered a significant benefit under §F(3) of this regulation if the benefit includes coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Part B excess charges.

G. Options if the Medicare Select Program is Discontinued.

(1) Medicare Select policies and certificates shall provide for continuation of coverage in the event the Secretary determines that Medicare Select policies and certificates issued under this regulation shall be discontinued due to either the:

(a) Failure of the Medicare Select Program to be reauthorized under law; or

(b) Substantial amendment of the Medicare Select Program.

(2) If the Secretary determines that Medicare Select policies and certificates should be discontinued as described in §G(1) of this regulation, each Medicare Select issuer shall make available to each individual insured under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer which has comparable or lesser benefits and which does not contain a restricted network provision.

(3) The issuer referenced in §G(2) of this regulation shall make available the policies and certificates without requiring evidence of insurability.

(4) For the purposes of §G(2) of this regulation, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced.

(5) A benefit shall be considered a significant benefit under §G(4) of this regulation if the benefit includes coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.

Cross References

31.10.06.24D(2)(c)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.26 Prohibition Against Use of Genetic Information and Requests for Genetic Testing.

A. This regulation applies to all policies with policy years beginning on or after July 1, 2009.

B. Definitions.

(1) In this regulation, the following terms have the meanings indicated.

(2) Terms Defined.

(a) “Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of the individual.

(b) Genetic Information.

(i) “Genetic information” means, with respect to an individual, information about the individual's genetic tests, the genetic tests of a family member of the individual, and the manifestation of a disease or disorder in a family member of the individual.

(ii) “Genetic information” includes, with respect to an individual, a request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by the individual or a family member of the individual.

(iii) “Genetic information” includes, with respect to a pregnant woman, genetic information of a fetus carried by the pregnant woman,

(iv) “Genetic information” includes, with respect to an individual or family member utilizing reproductive technology, genetic information of an embryo legally held by the individual or family member.

(v) “Genetic information” does not include information about the sex or age of an individual.

(i) A genetic test;

(ii) Genetic counseling, including obtaining, interpreting, or assessing genetic information; or

(iii) Genetic education.

(d) Genetic Test.

(i) “Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites that detects genotypes, mutations, or chromosomal changes.

(ii) “Genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes.

(iii) “Genetic test” does not mean an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.

(e) Issuer of a Medicare Supplement Policy or Certificate.

(i) “Issuer of a Medicare supplement policy or certificate” means an insurance company, fraternal benefit society, nonprofit health service plan, health maintenance organization, or any other entity delivering or issuing for delivery in this State Medicare supplement policies or certificates.

(ii) “Issuer of a Medicare supplement policy or certificate” includes a third-party administrator or other person acting for or on behalf of an entity described in §B(2)(e)(i) of this regulation.

(f) “Underwriting purposes” means:

(i) Rules for, or determination of, eligibility, including enrollment and continued eligibility, for benefits under the policy;

(ii) The computation of premium or contribution amounts under the policy;

(iii) The application of a preexisting condition exclusion under the policy; and

(iv) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.

C. An issuer of a Medicare supplement policy or certificate may not:

(1) Deny or condition the issuance or effectiveness of the policy or certificate, including the imposition of an exclusion of benefits under the policy or certificate because of a preexisting condition, based on the genetic information with respect to an individual;

(2) Discriminate in the pricing of the policy or certificate, including the adjustment of premium rates, of an individual based on the genetic information with respect to the individual;

(3) Request or require an individual or a family member of the individual to undergo a genetic test;

(4) Request, require, or purchase genetic information for underwriting purposes; or

(5) Request, require, or purchase, in connection with an enrollment, genetic information with respect to an individual before the individual's enrollment under the policy.

D. The prohibitions described in §C(1) and (2) of this regulation do not limit the ability of an issuer of a Medicare supplement policy or certificate, to the extent otherwise permitted by law, from:

(1) Denying or conditioning the issuance or effectiveness of the policy or certificate or increasing the premium for a group based on the manifestation of a disease or disorder of an insured or applicant; or

(2) Increasing the premium for a policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy, but the manifestation of a disease or disorder in one individual may not also be used as genetic information about other group members and to further increase the premium for the group.

E. The prohibition described in §C(3) of this regulation does not preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment, as defined for the purposes of applying the regulations promulgated under Part C of Title XI and Section 264 of the Health Insurance Portability and Accountability Act of 1996, and consistent with §C(1) and (2) of this regulation.

F. For purposes of carrying out §E of this regulation, an issuer of a Medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose.

G. Notwithstanding §C(3) of this regulation, an issuer of a Medicare supplement policy or certificate may request, but not require, that an individual or a family member of the individual undergo a genetic test if all of the following conditions are met:

(1) The request is made pursuant to research that complies with Part 46 of Title 45, Code of Federal Regulations, or equivalent federal regulations, and any applicable State or local law or regulations for the protection of human subjects in research;

(2) The issuer clearly indicates to the individual, or in the case of a minor child, to the legal guardian of the child, to whom the request is made that:

(a) Compliance with the request is voluntary, and

(b) Noncompliance with the request will have no effect on enrollment status or premium or contribution amounts;

(3) The issuer does not use genetic information collected or acquired under §G of this regulation to underwrite, determine eligibility to enroll or maintain enrollment status, set premium rates, or determine whether to issue, renew, or replace a policy or certificate;

(4) The issuer notifies the Secretary in writing that the issuer is conducting activities under the exception provided by §G of this regulation, and includes a description of the activities conducted; and

(5) The issuer complies with all other conditions for activities conducted under §G of this regulation, as the Secretary may require by regulation.

H. If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning an individual, the request, requirement, or purchase will not be considered a violation of §C(5) of this regulation if the request, requirement, or purchase does not violate §C(4) of this regulation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.27 Benefit Standards for 2010 Standardized Medicare Supplement Benefit Plans.

A. General Standards.

(1) The standards found in §§B—D of this regulation are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this State with an effective date for coverage on or after June 1, 2010.

(2) A policy or certificate may not be advertised, solicited, delivered, or issued for delivery in this State as a Medicare supplement policy or certificate on or after June 1, 2010, unless it complies with the benefit standards found in this regulation.

(3) An issuer may not offer a 1990 standardized Medicare supplement benefit plan for sale on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued with an effective date for coverage before June 1, 2010, remain subject to the requirements of Regulation .08 of this chapter.

B. Required Standards.

(1) The standards in this section apply to Medicare supplement policies and certificates and are in addition to all other requirements of this chapter.

(2) A Medicare supplement policy or certificate may not exclude or limit benefits for a loss incurred more than 6 months after the effective date of coverage because the loss involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.

(3) A Medicare supplement policy or certificate may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.

(6) Each Medicare supplement policy shall be guaranteed renewable. The issuer may not:

(a) Cancel or nonrenew the policy solely on the ground of the health status of the individual; or

(b) Cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.

(7) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under §B(9) of this regulation, the issuer shall offer each certificate holder an individual Medicare supplement policy, which at the option of the certificate holder provides for:

(a) Continuation of the benefits contained in the group policy; or

(b) Benefits that meet the requirements of these regulations.

(8) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:

(a) Offer the certificate holder the conversion option described in §B(7) of this regulation; or

(b) At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.

(9) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to each individual covered under the old group policy on the group policy's date of termination. Coverage under the new policy may not result in an exclusion for a preexisting condition that would have been covered under the group policy being replaced.

(10) Extension of Benefits.

(a) Termination of a Medicare supplement policy or certificate shall be without prejudice to a continuous loss that commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned on the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits.

(b) Receipt of Medicare Part D benefits may not be considered in determining a continuous loss under §B(10)(a) of this regulation.

(11) Suspension of Benefits.

(a) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for a period not to exceed 24 months in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to medical assistance.

(b) If the suspension described in §B(11)(a) of this regulation occurs and if the policyholder or certificate holder loses entitlement to medical assistance under Title XIX of the Social Security Act, the policy or certificate shall be reinstituted automatically, effective as of the date of termination of entitlement, if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss of entitlement and pays the premium attributable to the period, effective as of the date of termination of entitlement.

(i) Entitled to benefits under §226 (b) of the Social Security Act; and

(ii) Covered under a group health plan as defined in §1862(b)(1)(A)(v) of the Social Security Act.

(d) If the suspension described in §B(11)(c) of this regulation occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be reinstituted automatically, effective as of the date of loss of coverage under the group health plan, if the policyholder described in §B(11)(c):

(i) Provides notice of loss of coverage within 90 days after the date of the loss of group coverage; and

(ii) Pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

(e) Reinstitution of coverage under §B(11)(b) or (d) of this regulation:

(i) May not provide for any waiting period with respect to treatment of preexisting conditions;

(ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension; and

(iii) Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.

C. Standards for Basic (Core) Benefits Common to Benefit Plans A, B, C, D, F, F with High Deductible, G, M, and N.

(1) Every issuer of Medicare supplement insurance benefit plans shall make available a policy or certificate including only the following basic core package of benefits to each prospective insured:

(a) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;

(b) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;

(d) Coverage under Medicare Parts A and B for the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations;

(e) Coverage for the coinsurance amount, or, in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible; and

(f) Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.

(3) An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not instead of it.

D. Standards for Additional Benefits. The following additional benefits shall be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, M, and N as provided by Regulation .28 of this chapter:

(1) Medicare Part A Deductible—Coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period;

(2) Medicare Part A Deductible—Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period;

(3) Skilled Nursing Facility Care—Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A;

(4) Medicare Part B Deductible—Coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement;

(5) 100 Percent of the Medicare Part B Excess Charges—Coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge; and

(6) Medically Necessary Emergency Care in a Foreign Country—Coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000; for purposes of this benefit, “emergency care” means care needed immediately because of an injury or an illness of sudden and unexpected onset.

Cross References

31.10.06.28C

31.10.06.28D

31.10.06.28H(1)

31.10.06.28H(2)

31.10.06.28H(3)

31.10.06.28H(4)

31.10.06.28H(5)

31.10.06.28H(6)(b)

31.10.06.28H(7)(a)

31.10.06.28H(10)

31.10.06.28H(11)(a)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.28 Standard Medicare Supplement Benefit Plans for 2010 Plans.

A. Definitions.

(1) In this regulation, the following term has the meaning indicated.

(2) Term Defined. “Structure, language, and format” means style, arrangement, and overall content of a benefit.

B. General Standards.

(1) The standards found in §§C—I of this regulation are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this State with an effective date for coverage on or after June 1, 2010.

(3) Benefit plan standards applicable to Medicare supplement policies and certificates issued with an effective date for coverage before June 1, 2010, remain subject to the requirements of Regulation .09 of this chapter.

C. An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in Regulation .27C of this chapter.

D. If an issuer makes available any of the additional benefits described in Regulation .27D of this chapter, or offers standardized benefit Plans K or L, as described in §H(8) and (9) of this regulation, then the issuer shall make available to each prospective policyholder and certificate holder:

(1) A policy form or certificate form with only the core benefits as described in §C of this regulation; and

(2) A policy form or certificate form containing either standardized benefit Plan C, as described in §H(3) of this regulation, or standardized benefit Plan F, as described in §H(5) of this regulation.

E. Groups, packages, or combinations of Medicare supplement benefits other than those listed in this regulation may not be offered for sale in this State, except as may be permitted in §I of this regulation and Regulation .24 of this chapter.

F. Structure of Benefits.

(1) Benefit plans shall be uniform in structure, language, designation, and format to the standard benefit plans listed in this regulation and conform to the definitions in Regulation .02 of this chapter.

(2) Each benefit shall be structured in accordance with the format provided in Regulation .27C and D of this chapter, or in the case of plans K or L in §H(8) and (9) of this regulation, and shall list the benefits in the order shown in this regulation.

G. An issuer may use, in addition to the benefit plan designations required in §F of this regulation, other designations to the extent permitted by law.

H. Make-up of 2010 Standardized Benefit Plans.

(1) Standardized Medicare supplement benefit Plan A shall include only the following: The core benefits as defined in Regulation .27C of this chapter.

(2) Standardized Medicare supplement benefit Plan B shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible as defined in Regulation .27D(1) of this chapter.

(3) Standardized Medicare supplement benefit Plan C shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Deductible, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(1), (3), (4), and (6) of this chapter.

(4) Standardized Medicare supplement benefit Plan D shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, and Medically Necessary Emergency Care in an Foreign Country as defined in Regulation .27D(1), (3), and (6) of this chapter.

(5) Standardized Medicare supplement benefit Plan F shall include only the following: The basic core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Deductible, 100 percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(1) and (3)—(6) of this chapter.

(6) Standardized Medicare Supplement Benefit Plan F With High Deductible.

(a) Plan F with High Deductible shall include only 100 percent of covered expenses following the payment of the annual deductible set forth in §H(6)(c) of this regulation.

(b) The covered expenses include the core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Deductible, 100 percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(1) and (3)—(6) of this chapter.

(i) The annual deductible in Plan F with High Deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by Plan F, and is in addition to any other specific benefit deductibles.

(ii) The basis for the deductible is $1,500.

(iii) The Secretary shall adjust the deductible annually after 1999 to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(7) Standardized Medicare Supplement Benefit Plan G.

(a) Standardized Medicare supplement benefit Plan G shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, 100 percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(1), (3), (5), and (6) of this chapter.

(b) Effective January 1, 2020, the standardized benefit plan described in Regulation .31B(3) of this chapter (Re-designated Plan G High Deductible) may be offered to any individual who was eligible for Medicare prior to January 1, 2020.

(8) Standardized Medicare Supplement Benefit Plan K.

(a) Plan K is mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(b) Plan K shall include only the following:

(i) Part A Hospital Coinsurance 61st Through 90th Days — Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;

(ii) Part A Hospital Coinsurance 91st Through 150th Days — Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;

(iii) Part A Hospitalization After Lifetime Reserve Days are Exhausted — Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;

(iv) Medicare Part A Deductible — Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in §H(8)(b)(x) of this regulation;

(v) Skilled Nursing Facility Care — Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in §H(8)(b)(x) of this regulation;

(vi) Hospice Care — Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in §H(8)(b)(x) of this regulation;

(vii) Blood — Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in §H(8)(b)(x) of this regulation;

(viii) Part B Cost Sharing — Except for coverage provided in §H(8)(b)(ix) of this regulation, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in §H(8)(b)(x) of this regulation;

(ix) Part B Preventive Services — Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and

(x) Cost Sharing After Out-of-Pocket Limit — Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary.

(c) The provider shall accept the issuer's payment of the Medicare Part A eligible expenses for hospitalization under §H(8)(b)(iii) of this regulation as payment in full and may not bill the insured for any balance.

(9) Standardized Medicare Supplement Benefit Plan L.

(a) Plan L is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003.

(b) Plan L shall include only the following:

(i) The benefits described in §H(8)(b)(i)—(iii) and (ix) of this regulation;

(ii) The benefit described in §H(8)(b)(iv)—(viii) of this regulation, but substituting 75 percent for 50 percent; and

(iii) The benefit described in §H(8)(b)(x) of this regulation, but substituting $2,000 for $4,000.

(10) Standardized Medicare supplement benefit Plan M shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 50 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(2), (3), and (6) of this chapter.

(11) Standardized Medicare Supplement Benefit Plan N.

(a) Plan N shall include only the following: The core benefits as defined in Regulation .27C of this chapter, plus 100 percent of the Medicare Part A Deductible, Skilled Nursing Facility Care, and Medically Necessary Emergency Care in a Foreign Country as defined in Regulation .27D(1), (3), and (6) of this chapter, with copayments in the following amounts:

(i) The lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit, including visits to medical specialists; and

(ii) The lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit.

(b) The copayment described in §H(11)(a)(ii) of this regulation shall be waived if the insured is admitted to a hospital and the emergency visit is subsequently covered as a Medicare Part A expense.

I. New or Innovative Benefits.

(1) An issuer may, with the prior approval of the Commissioner, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards.

(2) The new or innovative benefits described in §I(1) of this regulation shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective.

(3) Approval of new or innovative benefits may not adversely impact the goal of Medicare supplement simplification.

(4) New or innovative benefits may not include an outpatient prescription drug benefit.

(5) New or innovative benefits may not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.

Cross References

31.10.06.08B(13)(a)

31.10.06.27D

31.10.06.31A(3)

31.10.06.31B(1)

31.10.06.31B(2)

31.10.06.31B(3)(b)

31.10.06.31C

31.10.06.31D

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.29 Repealed.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.30 Outlines of Coverage for Standardized Medicare Supplement Benefit Plans.

A. Forms.

FORMS AT END OF CHAPTER

Cross References

31.10.06.13E(3)(b)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.06.31 Standard Medicare Supplement Benefit Plans for 2020 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery to Individuals Newly Eligible for Medicare on or After January 1, 2020.

A. General Standards.

(1) A policy or certificate that provides coverage of the Medicare Part B deductible may not be advertised, solicited, delivered, or issued for delivery in this State as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020.

(2) Medicare supplement policies and certificates delivered or issued for delivery to individuals eligible for Medicare before January 1, 2020 remain subject to the requirements of Regulation .28 of the chapter.

(3) Medicare supplement policies or certificates delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020 are subject to the requirements of Regulation .28 of this chapter, except as stated in §§B and C of this regulation.

(4) Standardized Medicare supplement benefit Plans C, F, and F with High Deductible may not be offered to individuals newly eligible for Medicare on or after January 1, 2020.

B. Make-up of 2020 Standardized Benefit Plans

(1) Standardized Medicare supplement benefit Plan C is re-designated as Plan D and shall include the benefits contained in Regulation .28H(3) of this chapter except for coverage for 100 percent or any portion of the Medicare Part B deductible.

(2) Standardized Medicare supplement benefit Plan F is re-designated as Plan G and shall include the benefits contained in Regulation .28H(5) of this chapter except for coverage for 100 percent or any portion of the Medicare Part B deductible.

(3) Standardized Medicare Supplement Benefit Plan G With High Deductible.

(a) Standardized Medicare supplement benefit Plan F with High Deductible is re-designated as Plan G with High Deductible.

(b) Standardized Medicare supplement benefit Plan G with High Deductible shall include the benefits contained in Regulation .28H(6) of this chapter except for coverage for 100 percent or any portion of the Medicare Part B deductible.

(c) The Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual Plan G high deductible.

C. In the case of an individual newly eligible for Medicare on or after January 1, 2020, the reference to Plans C or F in Regulation .28D(2) of this chapter is deemed a reference to Plans D or G, respectively.

D. On or after January 1, 2020, the standardized benefit plan described in §B(3) of this regulation may be offered to an individual who was eligible for Medicare prior to January 1, 2020 in addition to the standardized plans described in Regulation .28H of this chapter.

E. For purposes of Regulation .09-1E of this chapter, in the case of an individual newly eligible for Medicare on or after January 1, 2020, any reference to Plans C or F (including F With High Deductible) shall be deemed to be a reference to Plans D or G (including G With High Deductible) respectively.

Cross References

31.10.06.06A(3)

31.10.06.28H(7)(b)

Attachments

31.10.06.30

History

Administrative History: Effective date:
Administrative History: Regulations .01—.21 adopted as an emergency provision effective July 14, 1992 (19:16 Md. R. 1466); adopted permanently effective August 3, 1992 (19:15 Md. R. 1389)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 1996 (23:6 Md. R. 475)
Administrative History: Regulation .14A amended, and Regulation .21 repealed, and Regulations .22 and .23 recodified to Regulations .21 and .22, respectively, as an emergency provision effective April 25, 1996 (23:10 Md. R. 728); amended permanently effective September 10, 1996 (23:18 Md. R. 1317)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.90 to COMAR 31.10.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .02 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .02 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .03 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .04B amended as an emergency provision effective January 1, 2000 (27:4 Md. R. 452); emergency status expired June 28, 2000
Administrative History: Regulation .04B amended effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: Regulation .06 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .08 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .08 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .09 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .09-1 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .09-1 amended as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; amended permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Administrative History: Regulation .22 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Administrative History: Regulation .23 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: Regulation .24 adopted as an emergency provision effective October 1, 2001 (28:23 Md. R. 2053); emergency status expired March 29, 2002; adopted permanently effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective January 1, 2006 (32:18 Md. R. 1522)
Administrative History: Regulation .02B amended effective September 21, 2009 (36:19 Md. R. 1439); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .06A amended effective August 21, 2023 (50:16 Md. R. 729)
Administrative History: Regulation .07A amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .08 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .09 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .26 adopted effective June 29, 2009 (36:13 Md. R. 901)
Administrative History: Regulations .27—.30 adopted effective September 21, 2009 (36:19 Md. R. 1439)
Administrative History: Regulation .28H amended effective November 29, 2010 (37:24 Md. R. 1660); January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .29 repealed effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .30 amended effective January 14, 2019 (46:1 Md. R. 13)
Administrative History: Regulation .30I, J amended effective November 29, 2010 (37:24 Md. R. 1660)
Administrative History: Regulation .31 adopted effective January 14, 2019 (46:1 Md. R. 13)
Authority: Health-General Article, §§19-705 and 19-706; Insurance Article, §§2-109 and 8-403(b), Title 15, Subtitle 9, and Title 27; Annotated Code of Maryland

COMAR 31.10.07 Limited Benefits Policies — Reporting Requirements [Repealed]

History

Administrative History: Effective date: December 21, 1992 (19:25 Md. R. 2205)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.92 to COMAR 31.10.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter repealed effective October 5, 1998 (25:20 Md. R. 1534)

COMAR 31.10.08 Limited Benefits Policies — Minimum Loss Ratio [Repealed]

History

Administrative History: Effective date: December 21, 1992 (19:25 Md. R. 2205)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.93 to COMAR 31.10.08 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter repealed effective October 5, 1998 (25:20 Md. R. 1534)

31.10.09 Hospice Care Benefits

COMAR 31.10.09.01 Scope.

A. This chapter is applicable to each:

(1) Group, blanket, or individual health insurance contract written on an expense-incurred basis which is issued or renewed in the State on or after April 1, 1997;

(2) Individual or group nonprofit health service plan contract which is issued or renewed on or after April 1, 1997; and

(3) Individual or group contract issued or renewed by a health maintenance organization on or after April 1, 1997.

B. This chapter does not apply to a comprehensive health benefit plan issued to a small employer in accordance with Insurance Article, Title 15, Subtitle 12, Annotated Code of Maryland.

History

Administrative History: Effective date: April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.15 to COMAR 31.10.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-204, 12-205, and 15-809; Health-General Article, §§19-703(c) and 19-901; Annotated Code of Maryland

COMAR 31.10.09.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Bereavement counseling” means counseling provided to the immediate family or family caregiver of the insured after the insured's death to help the immediate family or family caregiver cope with the death of the insured.

(2) “Carrier” means an insurer, a nonprofit health service plan, or a health maintenance organization.

(3) Expense Incurred.

(a) “Expense incurred” means the benefits payable under the contract are based on the medical expenses the insured incurs.

(b) For the purpose of this chapter, a contract which includes both expense-incurred benefits and indemnity benefits shall be considered to be written on an “expense-incurred” basis.

(4) “Family caregiver” means a relative by blood, marriage, or adoption who lives with or is the primary caregiver of the terminally ill insured.

(5) “Family counseling” means counseling given to the immediate family or family caregiver of the terminally ill insured for the purpose of learning to care for the insured and to adjust to the death of the insured.

(6) “Hospice care program” means a coordinated, interdisciplinary program of hospice care services for meeting the special physical, psychological, spiritual, and social needs of terminally ill individuals and their families, by providing palliative and supportive medical, nursing, and other health services through home or inpatient care during the illness and bereavement to:

(a) Individuals who have no reasonable prospect of cure as estimated by a physician; and

(b) The immediate families or family caregivers of those individuals described in §B(6)(a) of this regulation.

(7) “Immediate family” means the spouse, parents, siblings, grandparents, and children of the terminally ill insured.

(8) “Indemnity” means the benefits payable under the contract are flat amounts which are not related to the expenses the insured incurs, such as a hospital indemnity contract which pays a flat fee for each day the insured is confined in a hospital regardless of the actual expenses the insured incurs during the hospital confinement.

(9) “Insured” means a person who is covered under a:

(a) Group, blanket, or individual health insurance policy written on an expense-incurred basis;

(b) Nonprofit health service plan contract; or

(10) “Respite care” means temporary care provided to the terminally ill insured to relieve the family caregiver from the daily care of the insured.

(11) “Terminally ill” means a medical prognosis given by a physician that the insured's life expectancy is 6 months or less.

Cross References

31.10.09.04C

History

Administrative History: Effective date: April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.15 to COMAR 31.10.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-204, 12-205, and 15-809; Health-General Article, §§19-703(c) and 19-901; Annotated Code of Maryland

COMAR 31.10.09.03 Required Hospice Care Benefit Options.

A. A carrier shall offer the policyholder the option of purchasing the minimum hospice care benefits required by this chapter when the policyholder applies for coverage.

B. Contracts Issued Before April 1, 1997.

(1) Except as provided in §B(2) of this regulation, if a policyholder purchases a contract with hospice care benefits before April 1, 1997, the carrier shall revise the contract to include at least the minimum benefits required by this chapter on the renewal date occurring on or after April 1, 1997.

(2) Section B(1) of this regulation does not apply to guaranteed renewable or noncancellable contracts.

History

Administrative History: Effective date: April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.15 to COMAR 31.10.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-204, 12-205, and 15-809; Health-General Article, §§19-703(c) and 19-901; Annotated Code of Maryland

COMAR 31.10.09.04 Minimum Hospice Care Benefits.

A. Except as provided in §B of this regulation, the hospice care benefit offered shall include the following minimum benefits provided through a hospice care program:

(1) 30 days of inpatient care per insured;

(2) Part-time nursing care by or supervised by a registered graduate nurse;

(3) Counseling, including dietary counseling, for the terminally ill insured;

(4) Family counseling for the immediate family and the family caregiver before the death of the terminally ill insured;

(5) Bereavement counseling for the immediate family or family caregiver of the insured for at least the 6-month period following the insured's death or 15 visits, whichever occurs first;

(6) Respite care subject to the following:

(a) The annual benefit shall be at least 14 days, and

(b) The carrier may limit any one inpatient stay for respite care to 5 consecutive days; and

(7) Medical supplies, equipment, and medication required to maintain the comfort and manage the pain of the terminally ill insured.

B. If a contract does not include inpatient benefits, the carrier shall offer the benefits described in §A(2)—(7) of this regulation.

C. If a contract contains hospital indemnity benefits but is defined as an expense incurred policy according to Regulation .02B(3) of this chapter, the hospice care benefit may limit the hospice daily inpatient benefit to the amount payable for hospital confinement under the contract.

History

Administrative History: Effective date: April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.15 to COMAR 31.10.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-204, 12-205, and 15-809; Health-General Article, §§19-703(c) and 19-901; Annotated Code of Maryland

COMAR 31.10.09.05 Prohibited Exclusions and Limitations.

A. The hospice care benefit may not be subject to a lifetime maximum which is separate from the lifetime maximum applicable to other benefits in the contract.

B. The hospice care benefit may not be subject to an annual maximum benefit which is separate from the annual maximum applicable to other benefits in the contract.

C. A carrier may not exclude immediate family members or family caregivers of the insured from the family counseling benefit or the bereavement counseling benefit because the immediate family member or family caregiver is not otherwise covered under the contract which provides coverage to the insured.

D. A carrier may not exclude the siblings of a terminally ill child from the family counseling benefit or the bereavement counseling benefit, even if the siblings are not otherwise covered under the same contract as the terminally ill child.

E. A hospice care benefit may not exclude inpatient benefits if the hospice care benefit appears in a contract which includes other inpatient benefits.

F. The benefits provided as part of the hospice care benefit may not be subject to separate dollar maximum limits, except as provided in this chapter.

G. The carrier may not condition the inpatient hospice care benefits on a prior hospital confinement.

History

Administrative History: Effective date: April 7, 1997 (24:7 Md. R. 553)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.15 to COMAR 31.10.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-204, 12-205, and 15-809; Health-General Article, §§19-703(c) and 19-901; Annotated Code of Maryland

31.10.10 Summary Explanation of Benefits

COMAR 31.10.10.01 Applicability and Scope.

This chapter applies to all health insurers, including nonprofit health service plans, authorized to do business in Maryland, which provide benefits for inpatient hospitalization or outpatient surgical care on an expense-incurred basis in group or individual contracts, both for insured business and business for which the insurer is an administrator.

History

Administrative History: Effective date: December 1, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.95 to COMAR 31.10.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1007, Annotated Code of Maryland

COMAR 31.10.10.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Claimant” means an insured individual resident in Maryland making a claim against the insurer for benefits, who is a:

(a) Policyholder covered by an individual policy; or

(b) Certificate holder covered under a group policy or under an administration contract.

(2) “Service” means any service for which a charge is made which is covered under the policy or contract, including charges for, but not limited to:

(a) Fees of surgeons, anesthetists, and other physicians;

(b) Room and board charges;

(d) Recovery room charges; and

(e) Nursing care charges.

History

Administrative History: Effective date: December 1, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.95 to COMAR 31.10.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1007, Annotated Code of Maryland

COMAR 31.10.10.03 Summary Form.

A. An insurer which provides benefits for inpatient hospitalization or outpatient surgical care on an expense-incurred basis shall provide claimants annually a consolidated summary explanation regarding benefits claimed for those services during each calendar year.

B. The summary shall identify the provider by name and shall state the:

(1) Date of the service;

(2) Amount claimed;

(3) Amount which was paid or is payable by the insurer on claims processed during the year; and

(4) Balance to be paid by the covered individual, if the balance is determinable from the claim forms submitted.

C. The summary referred to in §B of this regulation shall be provided by insurers to claimants between January 1 and February 15 for claims made during the preceding calendar year.

D. At the insurer's option, the summary may include information pertaining to benefits other than those specified in §A of this regulation.

Cross References

31.10.10.04

31.10.10.05C

History

Administrative History: Effective date: December 1, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.95 to COMAR 31.10.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1007, Annotated Code of Maryland

COMAR 31.10.10.04 Group Coverage.

Instead of the procedure outlined in Regulation .03 of this chapter, an insurer may make the annual summary to claimants who are covered under group policies, or who are covered under employer-employee groups administered by the insurer, within 36 days after the annual anniversary of the group policy, or of the administration contract, for the 12-month period ending with that anniversary.

Cross References

31.10.10.05A

31.10.10.05B

31.10.10.05C

History

Administrative History: Effective date: December 1, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.95 to COMAR 31.10.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1007, Annotated Code of Maryland

COMAR 31.10.10.05 Group Coverage — Election of Alternate Procedure.

A. An insurer desiring to use the alternate procedure specified in Regulation .04 of this chapter may elect the procedure for:

(1) All groups; or

(2) Groups in excess of a certain size.

B. An insurer shall notify the Insurance Commissioner of its election under this regulation and Regulation .04 of this chapter within 90 days of the effective date of this chapter.

C. An insurer that follows the procedures set forth in Regulation .03 of this chapter, or that elects to comply with the procedures set forth in this regulation and Regulation .04 of this chapter, may change its procedures only after approval by the Commissioner.

History

Administrative History: Effective date: December 1, 1993 (20:20 Md. R. 1570)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.95 to COMAR 31.10.10 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1007, Annotated Code of Maryland

31.10.11 Uniform Claims Forms

COMAR 31.10.11.01 Applicability and Scope.

A. This chapter is applicable to all:

(1) Claims submitted to third-party payors as defined in Regulation .02B(22) of this chapter;

(2) Claims submitted by health care practitioners as defined in Regulation .02B(12) of this chapter;

(3) Claims submitted by hospitals as defined in Health-General Article, §19-301(g), Annotated Code of Maryland; and

(4) Claims submitted by other persons entitled to reimbursement from a third-party payor who submit claims to third-party payors on the HCFA Form 1500 or HCFA Form UB-92.

B. This chapter is not applicable to claims submitted by members.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Applicable standard code set” means the most recent versions, as of the date of service, of the following:

(a) For services rendered by health care practitioners, the Current Procedural Terminology (CPT) maintained and distributed by the American Medical Association, including its codes and modifiers, and codes for anesthesia services;

(b) For dental services, the Current Dental Terminology (CDT) maintained and distributed by the American Dental Association;

(c) For all professional and hospital services, the International Classification of Diseases, Clinical Modification (ICD-9 CM);

(d) For other health-related services, including prescribed drugs covered under a medical benefit of a contract issued by a third-party payor, the Centers for Medicare and Medicaid Services Common Procedure Coding System (HCPCS) levels I and II and modifiers maintained and distributed by the U.S. Department of Health and Human Services;

(e) For prescribed drugs covered under a pharmacy benefit of a contract issued by a third-party payor, the National Drug Codes (NDC) maintained and distributed by the U.S. Department of Health and Human Services;

(f) For anesthesia services, the codes maintained and distributed by the American Society of Anesthesiologists;

(g) For psychiatric services, the DSM-IV codes distributed by the American Psychiatric Association;

(h) For hospital and other applicable health-care services, including home health services, the State UB-92, Uniform Billing Data Elements Specification Manual;

(i) For hospital services pursuant to a Maryland contract or insurance policy, a revenue code:

(i) Approved by the Health Services Cost Review Commission for a hospital located in the State, or

(ii) Of the National or State Uniform Billing Data Elements Specifications for a hospital not located in the State; and

(j) For services rendered pursuant to Health-General Article, §15-103(b)(2), Annotated Code of Maryland, a code established by the Medicaid Program.

(2) “Auto code” means an ICD-9 code designed by a third-party payor as a diagnosis that is an emergency service.

(3) “CDT-1 Codes” means the current dental terminology, and its successors, required by the American Dental Association.

(4) “Clean claim” means a claim for reimbursement submitted to a third-party payor by a health care practitioner, pharmacy or pharmacist, hospital, or person entitled to reimbursement, that contains:

(a) In the case of a health care practitioner or person entitled to reimbursement:

(i) The data elements required by Regulation .08 of this chapter, and

(ii) Any attachments requested by the third-party payor pursuant to Regulation .10 of this chapter;

(b) In the case of a hospital or person entitled to reimbursement;

(i) The data elements required by Regulation .09 of this chapter, and

(ii) Any attachments requested by the third-party payor pursuant to Regulation .10 of this chapter; or

(c) In the case of a pharmacy or pharmacist, the data elements set forth on the Universal Prescription Drug Claim Form or its electronic equivalent.

(5) “CMS” means the federal Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services.

(6) “CPT-4 Codes” means the Current Procedural Terminology published by the American Medical Association.

(7) “Emergency services” has the meaning stated in Health-General Article, §19-701(d), Annotated Code of Maryland.

(8) “Global contract” means an agreement between a third-party payor, and a health care practitioner, hospital, or person entitled to reimbursement in which:

(a) For billing and payment purposes:

(i) The services of one or more health care practitioners, hospitals, or persons entitled to reimbursement are bundled together; and

(ii) The third-party payor agrees to pay, and the health care practitioner, hospital, or person entitled to reimbursement, agrees to accept a single rate for the applicable technical, facility, ancillary, and professional components of the services specified in the agreement; or

(b) The third-party payor agrees to pay, and the health care practitioner, hospital, or person entitled to reimbursement, agrees to accept a daily or per diem rate for the services related to home infusion therapy.

(9) HCFA Form 1500.

(a) “HCFA Form 1500” means the health insurance claims form and its electronic successor or equivalent published by CMS for use by health care practitioners or persons entitled to reimbursement.

(b) “HCFA Form 1500” includes any successor to HCFA Form 1500 published by CMS.

(10) HCFA Form UB-92.

(a) “HCFA Form UB-92” means the Revenue Code Summary UB-92 health insurance claim form and its electronic successor or equivalent published by CMS for use by hospitals, or person entitled to reimbursement.

(b) “HCFA Form UB-92” includes any successor to HCFA Form UB-92 published by the CMS.

(11) “HCPCS” means CMS's current Healthcare Common Procedural Coding System.

(12) Health Care Practitioner.

(a) “Health care practitioner” means a physician or any other person licensed or certified under Health Occupations Article, Annotated Code of Maryland.

(b) “Health care practitioner” does not include a physician or other person licensed or certified under Health Occupations Article, Annotated Code of Maryland, who:

(i) Is compensated by a health maintenance organization on a salaried or capitated basis; or

(ii) Is rendering care to a member or subscriber of the health maintenance organization on a salaried or capitated system basis.

(13) “Hospital” means a hospital as defined in Health-General Article, §19-301(g), Annotated Code of Maryland.

(14) ICD 9-CM Codes.

(a) “ICD-9-CM Codes” means the current disease and procedure codes in the international classification of diseases published by the U.S. Department of Health and Human Services.

(b) “ICD-9-CM Codes” includes any successor to ICD-9-CM Codes published by the U.S. Department of Health and Human Services.

(15) “J512 Form” means the uniform dental claim form approved by the American Dental Association for use by dentists and its electronic successor or equivalent.

(16) Member.

(a) “Member” means an individual entitled to health care benefits under a policy, plan, or certificate issued or delivered in the State by a carrier.

(b) “Member” includes a subscriber or an insured.

(17) “Modifier” means a code that is appended to a CPT or HCPCS code to provide more specific information about a medical procedure.

(18) “Person entitled to reimbursement” means:

(a) A health care practitioner as defined in §B(12) of this regulation; or

(b) Any other person who furnishes health care services or supplies.

(19) “Primary care” has the meaning stated in COMAR 31.11.06.02B(49).

(20) “Primary payor” means a third-party payor that, pursuant to the terms of an insurance policy or contract, is required to provide coverage for benefits to the insured or member:

(a) Before any other third-party payor provides benefits; and

(b) Regardless of whether benefits are available under any other insurance policy or contract.

(21) “Secondary payor” means a third-party payor that, pursuant to the terms of an insurance policy or contract, is required to pay all or some portion of the difference between the total amount of a claim and the amount paid by the primary payor, subject to the limitations of the insurance policy or contract.

(22) “Third-party payor” means a person that administers or provides reimbursement for health care benefits on an expense-incurred basis including:

(a) A health maintenance organization issued a certificate of authority in accordance with Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland;

(b) A health insurer or nonprofit health service plan authorized to offer health insurance policies or contracts in this State in accordance with the Insurance Article, Annotated Code of Maryland; or

(23) “Universal Prescription Drug Claim Form” means the uniform prescription drug claim form developed by the National Council for Prescription Drug Programs, Inc. and its electronic successor or equivalent.

Cross References

31.10.11.01A(1)

31.10.11.01A(2)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.03 Requirements for Use of HCFA Form 1500.

A. Except as provided in Regulation .10 of this chapter, third-party payors shall accept the HCFA Form 1500 and instructions provided by CMS for use of the HCFA 1500 as the sole instrument for filing claims with third-party payors for professional services.

B. The requirement set forth in §A of this regulation does not apply to:

(1) Dental services which are billed by dentists using the J512 Form, or its equivalent, and CDT-1 Codes; or

(2) Pharmacists or pharmacies which are filing claims for prescription drugs.

C. Except for parties to a global contract, a third-party payor may not require a health care practitioner or other person entitled to reimbursement to use any code or modifier for the filing of claims for health care services that is different from, or in addition to, what is required under the applicable standard code set for the professional services provided.

D. Except as provided in Regulation .10 of this chapter, a third-party payor may not use, and may not require a health care practitioner or other person entitled to reimbursement to use, any other descriptor with a code or to furnish additional information with the initial submission of a HCFA Form 1500 that is different from, or in addition to, the applicable standard code set for the professional services provided.

E. A health care practitioner or other person entitled to reimbursement whose billing is based on the amount of time involved shall indicate the start and stop time or number of minutes in field 24G, currently titled Days or Units, of the HCFA Form 1500 if it is not used to specify the number of days of treatment.

Cross References

31.10.11.08A

31.10.41.04B(3)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.04 Requirements for Use of J512 Form.

A. Third-party payors shall accept the J512 Form, or its equivalent, and most recent version of the instructions provided by the American Dental Association CDT-1 for use of the J512 Form, or its equivalent, as the sole instrument for filing claims with third-party payors for dental services.

B. A third-party payor may not require a dentist to use any code other than the CDT-1 codes for the initial filing of claims for dental care services.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.05 Requirements for Use of HCFA Form UB-92.

A. Third-party payors shall accept HCFA Form UB-92, and its successors, and the instructions provided by CMS for use of the HCFA Form UB-92, as the sole instrument for filing claims with third-party payors for hospital and other health-care services.

B. Except for parties to a global contract, a third-party payor may not use, and may not require a hospital, or person entitled to reimbursement, to use any code or modifier for the filing of claims for hospital or other health-care services that is different from or in addition to, what is required under the applicable standard code set for the hospital or other health-care services provided.

C. Except as provided in Regulation .10 of this chapter, a third-party payor may not use and may not require a hospital or person entitled to reimbursement to furnish additional information with the initial submission of the UB-92 that is different from, or in addition to, the applicable standard code set or for the hospital or other health-care services provided.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.06 Requirements for Use of Universal Prescription Drug Claim Form.

Third-party payors shall accept the Universal Prescription Drug Claim Form, or its electronic equivalent, as the sole instrument for filing claims with third-party payors for prescription drugs.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.07 General Provisions.

A. A third-party payor shall accept a clean claim which is submitted in compliance with these regulations for the processing of the third-party payor's claims.

B. A third-party payor is subject to the provisions of Insurance Article, §15-1005, Annotated Code of Maryland.

C. If a third party payor delegates its claims processing to another entity, the third-party payor is responsible for a violation by the entity of any regulation under this chapter.

D. A third-party payor shall accept current coding changes by the effective date of the changes set forth by the developers of the codes.

E. If a referral is required under Regulation .10 of this chapter, a third party payor may not deny a claim on the basis that a referral was not received unless the third party payor could not identify the member using the member's name and the following information specified on the referral form:

(1) Date of birth;

(2) Subscriber's plan identification number; or

(3) Other personally identifying information.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.08 Essential Data Elements for Clean Claims by Health Care Practitioners or Persons Entitled to Reimbursement.

A. In General. To qualify as a clean claim, a claim submitted to a third-party payor by a health care practitioner as provided in Regulation .03 of this chapter, or by a person entitled to reimbursement, shall conform to the applicable standard code set and include the following data elements:

(1) Subscriber's plan ID number (HCFA Form 1500, field 1a);

(2) Patient's name (HCFA Form 1500, field 2);

(3) Patient's date of birth and gender (HCFA Form 1500, field 3);

(4) Subscriber's name (HCFA Form 1500, field 4);

(5) Patient's address (street or P.O. box, city, and zip code) (HCFA Form 1500, field 5);

(6) Patient's relationship to the subscriber (HCFA Form 1500, field 6);

(7) Subscriber's address (street or P.O. box, city, and zip code) (HCFA Form 1500, field 7);

(8) Except in the case of a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, patient status (HCFA Form 1500, field 8);

(9) Whether the patient's condition is related to employment (HCFA Form 1500, field 10(a));

(10) Whether the patient's condition is related to an auto accident (HCFA Form 1500, field 10(b));

(11) Whether the patient's condition is related to an accident other than an auto accident (HCFA Form 1500, field 10(c));

(12) Subscriber's policy number (HCFA Form 1500, field 11);

(13) Except in the case of a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, subscriber's birth date and gender (HCFA Form 1500, field 11a);

(14) Except in the case of a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, name of the third-party payor (HCFA Form 1500, field 11c);

(15) Disclosure of any other health benefit plans (HCFA Form 1500, field 11d);

(16) Patient's or authorized person's signature or notation that the signature is on file with the health care practitioner (HCFA Form 1500, field 12);

(17) Subscriber's or authorized person's signature or notation that the signature is on file with the health care practitioner or person entitled to reimbursement, if applicable (HCFA Form 1500, field 13);

(18) Except in the case of a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, date of current illness, injury, or pregnancy (HCFA Form 1500, field 14);

(19) Except in the case of a health care practitioner for emergency services, or a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, whether the patient has had the same or a similar illness (HCFA Form 1500, field 15);

(20) Except in the case of a health care practitioner for emergency services, the name of the referring physician or health maintenance organization (HCFA Form 1500, field 17);

(21) Hospitalization dates related to current services, if applicable (HCFA Form 1500, field 18);

(22) Diagnosis codes or nature of the illness or injury (HCFA Form 1500, field 21);

(23) Date of service (HCFA Form 1500, field 24A);

(24) Place of service codes for all claims, as designated by HFCA for Medicare (HCFA Form 1500, field 24B);

(25) Procedure code (HCFA Form 1500, field 24D);

(26) Diagnosis code by specific service (HCFA Form 1500, field 24E);

(27) Charge for each listed service (HCFA Form 1500, field 24F);

(28) Number of days, time (minutes), start and stop time, or units (HCFA Form 1500, field 24G);

(29) The carrier-assigned rendering provider number until the National Provider Identifier is developed and assigned, if applicable (HCFA Form 1500, field 24K);

(30) Health care practitioner's or person entitled to reimbursement's federal tax ID number (HCFA Form 1500, field 25);

(31) Patient's account number (HCFA Form 1500, field 26);

(32) Total charge (HCFA Form 1500, field 28);

(33) For claims:

(a) Submitted electronically, a computer-printed name as the signature of the health care practitioner or person entitled to reimbursement (HCFA Form 1500, field 31), or

(b) Not submitted electronically, the signature of the health care practitioner who provided the service, or person entitled to reimbursement who provided the service, or notation that the signature is on file with the HMO or preferred provider carrier (HCFA Form 1500, field 31);

(34) Name and address of the facility where services were rendered (if other than home or office) (HCFA Form 1500, field 32);

(35) Health care practitioner's or person entitled to reimbursement's billing name, address, zip code, phone number, and, if applicable, carrier-assigned provider number until the National Provider Identifier (NPI) is developed and assigned, including a provider number pursuant to Health-General Article, §19-710.1(b)(3), Annotated Code of Maryland, (HCFA Form 1500, field 33); and

(36) Any other field or essential data element necessary to comply with the applicable standard code set.

B. Specific Circumstances. In addition to the data elements required by §A of this regulation, to qualify as a clean claim, a claim submitted to a third-party payor by a health care practitioner or person entitled to reimbursement shall include the following data elements if circumstances exist that render the data elements applicable to the specific claim being filed:

(1) The other insured's or enrollee's name (HCFA Form 1500, field 9) is applicable if the patient is covered by more than one health benefit plan;

(2) The other insured's or enrollee's policy/group number (HCFA Form 1500, field 9a) is applicable if the patient is covered by more than one health benefit plan;

(3) The other insured's or enrollee's date of birth (HCFA Form 1500, field 9b) is applicable if the patient is covered by more than one health benefit plan;

(4) The other insured's or enrollee's plan name (employer, school, etc.) (HCFA Form 1500, field 9c) is applicable if the patient is covered by more than one health benefit plan;

(5) The other insured's or enrollee's HMO or insurer name (HCFA Form 1500, field 9d) is applicable if the patient is covered by more than one health benefit plan;

(6) Except in the case of a laboratory issued a license pursuant to Health-General Article, §17-205, Annotated Code of Maryland, the subscriber's plan name (employer, school, etc.) (HCFA Form 1500, field 11(b)) is applicable if the health benefit plan is a group plan;

(7) The prior authorization number (HCFA Form 1500, field 23) is applicable when prior authorization is required;

(8) A code pursuant to a global contract (HCFA Form 1500, field 24D) is applicable if the claim is between parties to a global contract;

(9) A code established by the Medicaid Program (HCFA Form 1500, field 24D) is applicable if the claim is for services rendered pursuant to Health-General Article, §15-103(b)(2), Annotated Code of Maryland;

(10) The modifier code (HCFA Form 1500, field 24(D)) is applicable when a modifier code is used to explain unusual circumstances;

(11) Whether an assignment was accepted (HCFA Form 1500, field 27) is applicable when an assignment has been accepted;

(12) The amount paid (HCFA Form 1500, field 29) is applicable if an amount has been paid to the health care practitioner or person entitled to reimbursement submitting the claim, by the patient or subscriber, or on behalf of the patient or subscriber; and

(13) The balance due (HCFA Form 1500, field 30) is applicable if an amount has been paid to the health care practitioner or person entitled to reimbursement submitting the claim, by the patient or subscriber, or on behalf of the patient or subscriber.

C. A third-party payor may not use or require a health care practitioner or person entitled to reimbursement to use any field for purposes that are inconsistent with these essential data elements or in addition to the applicable standard code set.

D. A third-party payor may accept a HCFA Form 1500 that includes data elements in addition to those set forth in §§A and B of this regulation.

Cross References

31.10.11.02B(4)(a)(i)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.09 Essential Data Elements for Clean Claims by Hospitals.

A. In General. To qualify as a clean claim, a claim submitted to a third-party payor by a hospital, or person entitled to reimbursement, shall conform to the applicable standard code set and include the following data elements:

(1) Hospital's, or person entitled to reimbursement's, name, address, and telephone number (HCFA Form UB-92, field 1);

(2) Patient's control number (HCFA Form UB-92, field 3);

(3) Type of bill code (HCFA Form UB-92, field 4);

(4) Hospital's, or person entitled to reimbursement's, federal tax ID number (HCFA Form UB-92, field 5);

(5) Beginning and ending date of claim period (HCFA Form UB-92, field 6);

(6) Patient's name (HCFA Form UB-92, field 12);

(7) Patient's address (HCFA Form UB-92, field 13);

(8) Patient's date of birth (HCFA Form UB-92, field 14);

(9) Patient's gender (HCFA Form UB-92, field 15);

(10) Patient's marital status (HCFA Form UB-92, field 16);

(11) Date of admission (HCFA Form UB-92, field 17);

(12) Admission hour (HCFA Form UB-92, field 18);

(13) Type of admission (for example, emergency, urgent, elective, newborn) (HCFA Form UB-92, field 19);

(14) Source of admission code (HCFA Form UB-92, field 20);

(15) Patient-status-at-discharge code (HCFA Form UB-92, field 22);

(16) Medical record number (HCFA Form UB-92, field 23);

(17) Responsible party name and address (HCFA Form UB-92, field 38);

(18) Value code and amounts (HCFA Form UB-92, fields 39—41);

(19) Applicable revenue code (HCFA Form UB-92, field 42) of:

(a) The Health Services Cost Review Commission, for hospitals located in the State, or

(b) The National or State Uniform Billing Data Elements Specifications, for hospitals not located in the State;

(20) Revenue description (HCFA Form UB-92, field 43);

(21) Service date (HCFA Form UB-92, field 45);

(22) Units of service (HCFA Form UB-92, field 46);

(23) Total charge (HCFA Form UB-92, field 47);

(24) Noncovered charges (HCFA Form UB-92, field 48);

(25) Name of the third-party payor (HCFA Form UB-92, field 50);

(26) Provider number (HCFA Form UB-92, field 51);

(27) Release of information (HCFA Form UB-92, field 52);

(28) Assignment of benefits (HCFA Form UB-92, field 53);

(29) Estimated amount due (HCFA Form UB-92, field 55);

(30) Subscriber's name (HCFA Form UB-92, field 58);

(31) Patient's relationship to the subscriber (HCFA Form UB-92, field 59);

(32) Patient's/subscriber's certificate number, health claim number, and ID number (HCFA Form UB-92, field 60);

(33) Treatment authorization code (HCFA Form UB-92, field 63);

(34) Principal diagnosis code (HCFA Form UB-92, field 67);

(35) Admitting diagnosis (HCFA Form UB-92, field 76);

(36) Attending physician ID (HCFA Form UB-92, field 82);

(37) Other physician ID (HCFA Form UB-92, field 83);

(38) Signature of the provider representative or notation that the signature is on file with the third-party payor (HCFA Form UB-92, field 85);

(39) Date the bill was submitted (HCFA Form UB-92, field 86); and

(40) Any other field or essential data element necessary to comply with the applicable standard code set.

B. Specific Circumstances. In addition to the data elements required by §A of this regulation, to qualify as a clean claim, a claim submitted to a third-party payor by a hospital, or person entitled to reimbursement, shall include the following data elements if circumstances exist that render the data elements applicable to the specific claim being filed:

(1) Covered days (HCFA Form UB-92, field 7) is applicable if Medicare is a primary or secondary payor;

(2) Noncovered days (HFCA Form UB-92, field 8) is applicable if Medicare is a primary or secondary payor;

(3) Coinsurance days (HFCA Form UB-92, field 9) is applicable if Medicare is a primary or secondary payor;

(4) Lifetime reserve days (HCFA Form UB-92, field 10) is applicable if Medicare is a primary or secondary payor and the patient was an inpatient;

(5) The discharge hour (HCFA Form UB-92, field 21) is applicable if the patient was an inpatient or was admitted for outpatient observation;

(6) The condition codes (HCFA Form UB-92, fields 24—30) are applicable if the HCFA Form UB-92 manual contains a condition code appropriate to the patient's condition;

(7) The occurrence codes and dates (HCFA Form UB-92, fields 32—35) are applicable if the HCFA Form UB-92 manual contains an occurrence code appropriate to the patient's condition;

(8) The occurrence span code and from and through dates (HCFA Form UB-92 field 36) are applicable if the HCFA Form UB-92 manual contains an occurrence span code appropriate to the patient's condition;

(9) HCPCS/Rates (HCFA Form UB-92, field 44) are applicable if there is a primary or secondary payor;

(10) A code pursuant to a global contract (HCFA Form UB-92, field 44) is applicable if the claim is between parties to a global contract;

(11) Prior payments (HCFA Form UB-92, field 54) are applicable if payments have been made to the hospital by the patient or another payor;

(12) The employment status code (HCFA Form UB-92, field 64) is applicable if there are payors of higher priority than the third-party payor, including workers' compensation;

(13) The employer name (HCFA Form UB-92, field 65) is applicable if there are payors of higher priority than the third-party payor, including workers' compensation;

(14) The employer location (HCFA Form UB-92, field 66) is applicable if there is workers' compensation involvement;

(15) Diagnoses codes other than the principal diagnosis code (HCFA Form UB-92, field 68—75) are applicable if there are diagnoses other than the principal diagnosis;

(16) Diagnoses codes describing the patient's signs, or presenting symptoms, or both (HCFA Form UB 92, field 76) are applicable for services provided in a hospital emergency department;

(17) The procedure coding methods used (HCFA Form UB-92, field 79) are applicable if the HCFA Form UB-92 manual indicates a procedural coding method appropriate to the patient's condition;

(18) The principal procedure code (HCFA Form UB-92, field 80) is applicable if the patient has undergone an inpatient or outpatient surgical procedure; and

(19) Other procedure codes (HCFA Form UB-92, field 81) are applicable as an extension of §B(17) of this regulation if additional surgical procedures were performed.

C. A third-party payor may not use or require a hospital to use any field for purposes that are inconsistent with these data elements or in addition to the applicable standard code set.

D. A third-party payor may accept the HCFA Form UB-92 that includes data elements in addition to those set forth in §§A and B of this regulation.

Cross References

31.10.11.02B(4)(b)(i)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.10 Attachments to Uniform Claims Forms.

A. A third-party payor may require a health care practitioner, hospital, or person entitled to reimbursement to include any of the following attachments to a HCFA Form UB-92 or HCFA Form 1500, respectively, for a claim to qualify as a clean claim:

(1) A referral or consultant treatment plan submitted by the specialist, if the claim is for specialty services under an HMO plan or in-network point-of-service plan, unless the third-party payor requires the provider of primary care services to submit directly to it the referral or consultant treatment plan for specialty services;

(2) An explanation of benefits statement from the primary payor to the secondary payor, unless an electronic remittance notice has been sent by the primary payor to the secondary payor;

(3) A Medicare remittance notice, if the claim involves Medicare as a primary payor and the third-party payor provides evidence that it does not have a crossover agreement to accept an electronic remittance notice;

(4) A description of the procedure or service, which may include the medical record, if a procedure or service rendered has no corresponding Current Procedural Terminology (CPT) or HCPCS code, or additional description information relating to a CDT code;;

(5) Operative notes, if the claim is for multiple surgeries, or includes modifier 22, 58, 62, 66, 78, 80, 81, or 82;

(6) Anesthesia records documenting the time spent on the service, if the claim for anesthesia services rendered includes modifiers P4 or P5;

(7) Documents referenced as contractual requirements in the global contract, if there is a global contract between a third-party payor and a health care practitioner, hospital, or person entitled to reimbursement;

(8) An ambulance trip report, if the claim is for ambulance services submitted by an ambulance company licensed by the Maryland Institute for Emergency Medical Services Systems;

(9) Office visit notes, if the claim includes modifier 21 or 22;

(10) Information related to the audit as specified in writing by the third-party payor, if the third-party payor's audit of the health care practitioner, hospital, or person entitled to reimbursement demonstrated a pattern of fraud, improper billing, or improper coding;

(11) Admitting notes, except in the case of services rendered in accordance with Health-General Article, §§19-701(d) and 19-712.5, Annotated Code of Maryland, if the claim is for inpatient services provided outside of the time or scope of the authorization;

(12) Physician notes, except in the case of services rendered in accordance with Health-General Article, §§19-701(d) and 19-712.5, Annotated Code of Maryland, if the claim for services provided is outside of the time or scope of the authorization, or when there is an authorization in dispute;

(13) Itemized bills, except in the case of services rendered in accordance with Health-General Article, §§19-701(d) and 19-712.5, Annotated Code of Maryland, if the claim is for services:

(a) Rendered in a hospital and the hospital claim has no prior authorization for admission, or

(b) Inconsistent with a third-party payor's concurrent review determination rendered before the delivery of services, regarding the medical necessity of the service;

(14) Adjunct claims documentation pursuant to Health-General Article, §19-710.1(b)(3), Annotated Code of Maryland;

(15) A treatment plan from a child’s health care practitioner that includes one or more specific treatment goals, if the claim is for habilitative services for a child diagnosed with autism or autism spectrum disorder.

B. In its manual, or other document that sets forth the claim filing procedures pursuant to Insurance Article, §15-1004(d), Annotated Code of Maryland, a third-party payor shall:

(1) List the attachments to an HCFA Form UB-92 or HCFA Form 1500 that it may require under §A of this regulation for a claim to qualify as a clean claim; and

(2) Describe the circumstances under which each attachment may be required.

C. A third-party payor may accept any additional attachments with the HCFA Form 1500 or HCFA Form UB-92.

Cross References

31.10.11.02B(4)(a)(ii)

31.10.11.02B(4)(b)(ii)

31.10.11.03A

31.10.11.03D

31.10.11.05C

31.10.11.07E

31.10.11.11A(1)(b)(ii)

31.10.11.11B

31.10.11.11C(1)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.11 Additional Information.

A. The following are permissible categories of disputed claims for which third-party payors may request additional information pursuant to Insurance Article, §§15-1004(c) and 15-1005(c), Annotated Code of Maryland:

(1) Except in cases of services rendered in accordance with Health-General Article, §§19-701(d) and 19-712.5, Annotated Code of Maryland, the legitimacy, medical necessity, or appropriateness of the health care service, if:

(a) There is no authorization; or

(b) There was preauthorization and the third-party payor disputes the claim:

(i) Consistent with the bases for a carrier's denial as set forth in Insurance Article, §15-1009(b), Annotated Code of Maryland, or

(ii) Because the claim is for services provided outside of the time or scope of the authorization and the applicable attachment required in Regulation .10 of this chapter was not submitted with the claim;

(2) Eligibility for benefits or coverage in accordance with Insurance Article, §15-1004(e)(1), Annotated Code of Maryland;

(3) The appropriateness of a service, procedure, or durable medical equipment rendered or provided by a specialist not requested by the primary care provider of an enrollee of a health maintenance organization on a referral form or consultant treatment plan;

(4) In the case of a claim made pursuant to a global contract, the information necessary to adjudicate the claim consistent with the global contract;

(5) A reasonable belief of incorrect billing in accordance with Insurance Article, §15-1005(c)(2)(ii), Annotated Code of Maryland;

(6) The insured's or enrollee's liability for the service under the insurance policy or contract, subject to the third-party payor obtaining the additional information from its insured or enrollee within 30 days from receipt of the claim;

(7) Legibility of the claim in a material matter;

(8) A reasonable belief of fraudulent or improper coding consistent with the bases for a carrier's retroactive denial as set forth in Insurance Article, §15-1008(e), Annotated Code of Maryland;

(9) A reasonable belief that a claim for emergency services may not meet the standards for an emergency service pursuant to Health-General Article, §19-701(d), Annotated Code of Maryland;

(10) The essential information required for a third-party payor to adjudicate a claim for dental services; and

(11) A category approved by the Commissioner by regulation.

B. A third-party payor may not request additional information if an attachment containing the same type of information was submitted with the claim pursuant to Regulation .10 of this chapter.

C. Except as provided for in §A(1) and (2) of this regulation, a third-party payor may not request medical records if:

(1) The claim is for services as set forth in Regulation .10A(12) of this chapter; and

(2) An itemized bill was submitted with the claim.

D. The following are impermissible categories of disputed claims for which third-party payors may not request additional information pursuant to Insurance Article, §§15-1004(c) and 15-1005(c), Annotated Code of Maryland:

(1) Except for global contracts, a description of the procedure or service that is inconsistent with the applicable standard code set;

(2) Reimbursement for hospital services, in accordance with the rates approved by the Health Services Cost Review Commission pursuant to Insurance Article, §15-1214, Annotated Code of Maryland; and

(3) Except for the bases for a carrier's denial of reimbursement for preauthorized or approved services as set forth in Insurance Article, §15-1009(b), Annotated Code of Maryland, services that were preauthorized by the third-party payor or a private review agent.

Cross References

31.10.11.14A(2)(c)

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.12 Receipt of a Claim.

A. Each third-party payor shall:

(1) Date-stamp the claim with the date received, for a written claim; or

(2) Assign to the document a batch number that includes the date received for an electronic claim.

B. Each third-party payor shall maintain a written or electronic record of the date of receipt of a claim.

C. Except as provided in §E of this regulation, a claim is presumed to have been received by a third-party payor according to the date of receipt of the claim stated in the written or electronic record required under §B of this regulation.

D. Pursuant to a request for claim receipt verification by a health care practitioner, hospital, or person entitled to reimbursement, a third-party payor shall provide within 5 working days verification of the date of claim receipt as stated in the written or electronic record, either in:

(1) Electronic form, if the request was for electronic verification; or

(2) Written form, including microfilm, if the request was for written verification.

E. A claim is presumed to have been received by a third-party payor:

(1) 3 working days from the date the submitting health care practitioner, hospital, or person entitled to reimbursement placed the claim in the U.S. mail, if the health care practitioner, hospital, or person entitled to reimbursement maintains the stamped certificate of mailing for the claim; or

(2) On the date recorded by the courier, if the claim was delivered by courier.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.13 Disclosure.

A. Third-party payors shall follow the disclosure requirements set forth in Insurance Article, §15-1004(d), Annotated Code of Maryland.

B. If a third-party payor uses auto codes to determine whether health care services provided in a hospital emergency facility are “emergency services” as defined in Health-General Article, §19-701(e), Annotated Code of Maryland, the third-party payor shall provide to all contracting health care practitioners or hospitals rendering emergency services, or to all health care practitioners or hospitals rendering emergency services that request them:

(1) Auto codes used by the third-party payor to determine emergency services; and

(2) Updated auto codes for emergency services at least 30 days before an update of the auto codes will be used, stating the date on which the updated auto codes for emergency services will be used.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

COMAR 31.10.11.14 Claims Data Filing.

A. Required.

(1) Except as provided in §B(2) of this regulation, twice each calendar year a third-party payor shall submit to the Commissioner a claims data filing that documents the payment and denial practices for claims from health care practitioners, hospitals, and other persons entitled to reimbursement of:

(a) The third-party payor; and

(b) Each entity to which the third-party payor has delegated claims processing.

(2) Each claims data filing required pursuant to this regulation shall include, at a minimum, data documenting:

(a) The number of claims received;

(b) The number of claims received that were clean claims pursuant to Regulations .08, .09, and .10 of this chapter;

(c) Claims for which additional information was requested by the third-party payor, or the entity to which the third-party payor has delegated claims processing, pursuant to Regulation .11 of this chapter; and

(d) As to all claims received, compliance or noncompliance with the requirements of Insurance Article, §15-1005, Annotated Code of Maryland, including timeliness of processing claims and paying interest.

B. Filing Deadlines.

(1) The claim data filing shall be in the form approved by the Commissioner and shall be submitted to the Commissioner not later than:

(a) September 1 of each year, beginning on September 1, 2002, for all claims received for the period of January 1—June 30 of the same calendar year; and

(b) March 1 of each year, beginning on March 1, 2003, for all claims received for the period of July 1—December 31 of the preceding calendar year.

(2) If the Commissioner has evidence that a third-party payor, or an entity to which a third-party payor has delegated claims processing, is not in compliance with Insurance Article, §15-1003, 15-1004, or 15-1005, Annotated Code of Maryland, the Commissioner may require a third-party payor to submit a claims data filing more frequently than twice a year.

C. Use of Data by Commissioner. The Commissioner shall use the claims data filings to determine the general business practices of third-party payors and entities to which third-party payors have delegated claims processing pursuant to Insurance Article, §15-1005, Annotated Code of Maryland.

D. Confidentiality of Information.

(1) A claims data filing submitted to the Commissioner pursuant to this regulation is confidential commercial information pursuant to State Government Article, §10-617, Annotated Code of Maryland.

(2) Except as provided in §D(3) of this regulation, the Commissioner shall deny inspection of a claims data filing.

(3) If information from a claims data filing is used as the basis for imposing interest or penalties on a third-party payor, the information shall be available for public inspection only as to the portions pertinent to the imposition of interest or penalties.

E. The Commissioner may impose penalties if a third-party payor submits inaccurate information required by §A of this regulation, in an amount not to exceed the penalty amount set forth in Insurance Article, §4-113(d)(1), Annotated Code of Maryland.

F. The Commissioner may act in accordance with Insurance Article, §4-113(b) or (d), Annotated Code of Maryland, if a third-party payor willfully submits inaccurate information required by §A of this regulation.

History

Administrative History: Regulations .01—.07 adopted as an emergency provision effective July 22, 1993 (20:16 Md. R. 1274); adopted permanently effective October 25, 1993 (20:21 Md. R. 1653)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.56 to COMAR 31.10.11 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective September 7, 2001 (28:12 Md. R. 1113); December 11, 2003 (30:24 Md. R. 1747)
Administrative History: Regulation .02B amended effective October 1, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .07E adopted effective January 26, 2009 (36:2 Md. R. 102)
Administrative History: Regulation .10A amended effective March 17, 2014 (41:5 Md. R. 348)
Administrative History: Regulation .14C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health Occupations Article, §1-208; Insurance Article, §§2-108, 2-109, and 15-1003—15-1005; Annotated Code of Maryland

31.10.12 Uniform Consultation Referral

COMAR 31.10.12.01 Applicability and Scope.

This chapter is applicable to all:

A. Carriers as defined in Regulation .02B(1) of this chapter;

B. Consultant/facility providers as defined in Regulation .02B(2) of this chapter; and

C. Primary or requesting providers as defined in Regulation .02B(4) of this chapter.

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A dental plan organization.

(2) “Consultant/facility provider” means:

(a) A person licensed or certified under Health Occupations Article, Annotated Code of Maryland, who receives a referral from a primary or requesting provider; or

(b) Hospitals and related institutions that receive a referral from a primary or requesting provider.

(3) “Hospital” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(4) “Primary or requesting provider” means a person licensed or certified under the Health Occupations Article, Annotated Code of Maryland, who refers patients for consultation to a consultant/facility provider.

(5) “Related institution” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(6) “Uniform consultation referral form” means:

(a) For dentists referring patients for dental care procedures or services, the Maryland Uniform Dental Consultation Referral Form or its electronic equivalent shown in Regulation .08 of this chapter; or

(b) For all other health care professionals referring patients for health, medical, or dental care procedures or services, the Maryland Uniform Consultation Referral Form or its electronic equivalent shown in Regulation.06 of this chapter.

Cross References

31.10.12.01A

31.10.12.01B

31.10.12.01C

31.10.12.03A

31.10.12.04A

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.03 Uniform Consultation Referral Form — Carrier Requirements.

A. If a carrier requires a covered person to have a written referral in order to receive services, the carrier shall use the uniform consultation referral form as defined in Regulation .02B(6) of this chapter.

B. The carrier may not impose as a condition of coverage a requirement to:

(1) Modify the uniform consultation referral form, except as provided in §E of this regulation; or

(2) Submit additional consultation referral forms.

C. The carrier may provide a separate set of instructions for properly completing the Uniform Consultation Referral Form.

D. For the uniform consultation referral form, the carrier’s specific instructions:

(1) If applicable, may be preprinted on the back of the uniform consultation referral form, if the instructions do not result in any modifications in the format of, or information categories directed to be supplied on the front of, the uniform consultation referral form; and

(2) Shall be made available to primary or requesting providers on the carrier’s website.

E. Notwithstanding the provisions of §B of this regulation, the carrier may provide stamps or preprinted stickers to include additional information to the carrier information block on the uniform consultation referral form.

F. The carrier may preprint the designated carrier information in the carrier information field on the Maryland uniform consultation referral form.

Cross References

31.10.12.04A

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.04 Uniform Consultation Referral Form — Primary or Requesting Provider.

A. The primary or requesting provider shall use the uniform consultation referral form as defined in Regulation .02B(6) of this chapter and instructions as provided in Regulation .03C of this chapter.

B. The uniform consultation referral form shall be properly completed by the primary or requesting provider.

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.05 Uniform Consultation Referral Form — Consultant/Facility Provider.

The consultant/facility provider shall accept a properly completed uniform consultation referral form.

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.06 General Provisions.

A. The requirements under these regulations do not apply to an entity that would be using a consultation form solely for internal purposes.

B. The Maryland Uniform Consultation Referral Form shall read as follows:

C. The electronic equivalent of the uniform consultation referral form is as follows:

| Electronic Equivalent of the Uniform Consultation Referral Form | | | | | --- | --- | --- | --- | | | | | | | Field | Length | Start | Stop | | 1 - Patient last name | 18 | 1 | 18 | | 2 - Patient first name | 12 | 19 | 30 | | 3 - Patient MI | 1 | 31 | 31 | | 4 - Patient DOB | 8 | 32 | 39 | | 5 - Patient phone number | 10 | 40 | 49 | | 6 - Patient member number | 16 | 50 | 65 | | 7 - Patient site number | 10 | 66 | 75 | | 8 - Carrier name | 24 | 76 | 99 | | 9 - Carrier address 1 | 24 | 100 | 123 | | 10 -Carrier address 2 | 24 | 124 | 147 | | 11 - Carrier city | 24 | 148 | 171 | | 12 - Carrier state | 2 | 172 | 173 | | 13 - Carrier zip code | 9 | 174 | 182 | | 14 - Carrier phone number | 10 | 183 | 192 | | 15 - Carrier fax number | 10 | 193 | 202 | | 16 - Primary/requesting provider last name | 18 | 203 | 220 | | 17 - Primary/requesting provider first name | 12 | 221 | 232 | | 18 - Primary/requesting provider MI | 1 | 233 | 233 | | 19 - Primary/requesting provider specialty | 25 | 234 | 258 | | 20 - Primary/requesting provider institution/group name | 80 | 259 | 338 | | 21 - Primary/requesting provider NPI # | 10 | 339 | 348 | | 22 - Primary/requesting provider address 1 | 24 | 349 | 372 | | 23 - Primary/requesting provider address 2 | 24 | 373 | 396 | | 24 - Primary/requesting provider city | 24 | 397 | 420 | | 25 - Primary/requesting provider state | 2 | 421 | 422 | | 26 - Primary/requesting provider zip | 9 | 423 | 431 | | 27 - Primary/requesting provider phone | 10 | 432 | 441 | | 28 - Primary/requesting provider fax | 10 | 442 | 451 | | 29 - Consultant/facility provider last name | 18 | 452 | 469 | | 30 - Consultant/facility provider first name | 12 | 470 | 481 | | 31 - Consultant/facility provider MI | 1 | 482 | 482 | | 32 - Consultant/facility provider specialty | 25 | 483 | 507 | | 33 - Consultant/facility provider institution/group name | 80 | 508 | 587 | | 34 - Consultant/facility provider NPI # | 10 | 588 | 597 | | 35 - Consultant/facility provider address 1 | 24 | 598 | 621 | | 36 - Consultant/facility provider address 2 | 24 | 622 | 645 | | 37 - Consultant/facility provider city | 24 | 646 | 669 | | 38 - Consultant/facility provider state | 2 | 670 | 671 | | 39 - Consultant/facility provider zip | 9 | 672 | 680 | | 40 - Consultant/facility provider phone | 10 | 681 | 690 | | 41 - Consultant/facility provider fax | 10 | 691 | 700 | | 42 - Reasons for referral | 80 | 701 | 780 | | 43 - Brief history, dx, results or attachment | 120 | 781 | 900 | | 44 - Service desired - code | 2 | 901 | 902 | | 45 - Place of service - code | 2 | 903 | 904 | | 46 - Number of visits | 2 | 905 | 906 | | 47 - Authorization number | 10 | 907 | 916 | | 48 - Referral validity date | 8 | 917 | 924 | | 49 - Signature/electronic person completing the form | 30 | 925 | 954 | | 50 - Authorized signature/electronic | 30 | 955 | 984 | | Referral certification is not a guarantee of payment. Payment of benefits is subject to a member’s eligibility on the date that the service is rendered and to any other contractual provision of the plan/carrier. | | | |

Cross References

10.67.04.02O

10.67.04.17A(3)(j)

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.07 Electronic Transfer of the Uniform Consultation Referral Form.

A. A transmission by facsimile is not considered an electronic transfer for the purposes of this chapter.

B. A carrier shall accept the electronic transfer of the uniform consultation referral form.

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.12.08 Uniform Consultation Referral Form — Required Forms.

A. The Maryland Uniform Dental Consultation Referral Form shall read as follows:

(SEE NEXT PAGE)

B. The electronic equivalent of the uniform consultation referral form is as follows:

| Uniform Dental Consultation Referral | | | | | --- | --- | --- | --- | | | | | | | Field | Length | Start | Stop | | 1 - Patient last name | 18 | 1 | 18 | | 2 - Patient first name | 12 | 19 | 30 | | 3 - Patient MI | 1 | 31 | 31 | | 4 - Patient DOB | 8 | 32 | 39 | | 5 - Patient phone number | 10 | 40 | 49 | | 6 - Patient member number | 16 | 50 | 65 | | 7 - Patient site number | 10 | 66 | 75 | | 8 - Carrier name | 24 | 76 | 99 | | 9 - Carrier address 1 | 24 | 100 | 123 | | 10 -Carrier address 2 | 24 | 124 | 147 | | 11 - Carrier city | 24 | 148 | 171 | | 12 - Carrier state | 2 | 172 | 173 | | 13 - Carrier zip code | 9 | 174 | 182 | | 14 - Carrier phone number | 10 | 183 | 192 | | 15 - Carrier fax number | 10 | 193 | 202 | | 16 - Primary/requesting dentist last name | 18 | 203 | 220 | | 17 - Primary/requesting dentist first name | 12 | 221 | 232 | | 18 - Primary/requesting dentist MI | 1 | 233 | 233 | | 19 - Primary/requesting dentist specialty | 25 | 234 | 258 | | 20 - Primary/requesting dentist institution/group name | 80 | 259 | 338 | | 21 - Primary/requesting dentist NPI # | 10 | 339 | 348 | | 22 - Primary/requesting dentist address 1 | 24 | 349 | 372 | | 23 - Primary/requesting dentist address 2 | 24 | 373 | 396 | | 24 - Primary/requesting dentist city | 24 | 397 | 420 | | 25 - Primary/requesting dentist state | 2 | 421 | 422 | | 26 - Primary/requesting dentist zip | 9 | 423 | 431 | | 27 - Primary/requesting dentist phone | 10 | 432 | 441 | | 28 - Primary/requesting dentist fax | 10 | 442 | 451 | | 29 - Specialist dentist last name | 18 | 452 | 469 | | 30 - Specialist dentist first name | 12 | 470 | 481 | | 31 - Specialist dentist MI | 1 | 482 | 482 | | 32 - Specialist dentist specialty | 25 | 483 | 507 | | 33 - Specialist dentist institution/group name | 80 | 508 | 587 | | 34 - Specialist dentist NPI # | 10 | 588 | 597 | | 35 - Specialist dentist address 1 | 24 | 598 | 621 | | 36 - Specialist dentist address 2 | 24 | 622 | 645 | | 37 - Specialist dentist city | 24 | 646 | 669 | | 38 - Specialist dentist state | 2 | 670 | 671 | | 39 - Specialist dentist zip | 9 | 672 | 680 | | 40 - Specialist dentist phone | 10 | 681 | 690 | | 41 - Specialist dentist fax | 10 | 691 | 700 | | 42 - Reasons for referral | 80 | 701 | 780 | | 43 - Brief history, dx, results or attachment | 120 | 781 | 900 | | 44 - Service desired - code | 2 | 901 | 902 | | 45 - Place of service - code | 2 | 903 | 904 | | 46 - Teeth diagram - attachment | 2 | 905 | 906 | | 47 - Authorization number | 10 | 907 | 916 | | 48 - Referral validity date | 8 | 917 | 924 | | 49 - Signature/electronic person completing the form | 30 | 925 | 954 | | 50 - Authorized signature/electronic | 30 | 955 | 984 | | Referral certification is not a guarantee of payment. Payment of benefits is subject to a member’s eligibility on the date that the service is rendered and to any other contractual provision of the plan/carrier. | | | |

Cross References

31.10.12.02B(6)(a)

History

Administrative History: Effective date: October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .03 amended as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: Regulation .07 adopted as an emergency provision effective January 28, 1997 (24:4 Md. R. 289); adopted permanently effective May 19, 1997 (24:10 Md. R. 710)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.23 to COMAR 31.10.12 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .03A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .04A amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .05 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .06D amended effective January 1, 2005 (31:23 Md. R. 1655)
Administrative History: Regulation .07 amended effective January 13, 2011 (38:1 Md. R. 12)
Administrative History: Regulation .08 adopted effective January 1, 2005 (31:23 Md. R. 1655); January 13, 2011 (38:1 Md. R. 12)
Authority: Insurance Article, §§2-109 and 15-120, Annotated Code of Maryland

COMAR 31.10.13.01 Preface.

The issuance or delivery of health insurance policies in Maryland in any manner not in compliance with this chapter shall be deemed to constitute the transaction of insurance business hazardous to policyholders and the public and contrary to the public interest and otherwise contrary to requirements of the Insurance Article. Insurance Article, §2-109, Annotated Code of Maryland, authorizes the Commissioner to make reasonable regulations necessary for or as an aid to implementing any provision of the Insurance Article. Insurance Article, §12-203, Annotated Code of Maryland, provides, in part, that no health insurance policy form shall be delivered or issued for delivery in this State unless the form has been filed with and approved by the Commissioner. Insurance Article, §12-205, Annotated Code of Maryland, authorizes the Commissioner to disapprove any policy form if it contains an inequitable provision or a provision without substantial benefit to the policyholder or if the policy benefits are unreasonable in relation to the premium charged or if the policy benefits are not of real economic value to the insured.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.02 Applicability.

This chapter applies to individual policies of health insurance and its application varies with the types of benefit provided by a policy. For this purpose, the benefits which have been found to appear in individual policies of health insurance are classified as follows:

A. Type 1: A benefit payable if an event involving a morbidity risk occurs or commences during the premium paying period of the policy. Most accident and health insurance benefits fall into this category.

B. Type 2: A deferred benefit in the form of a payment at the expiration date of the policy or at a date specified instead of an expiration date. This payment may be defined as an amount equal to all or a stated portion of the accumulated premiums for the policy, with or without interest, or the amount may be defined without regard to the premiums.

C. Type 3: A deferred periodic benefit providing for specified amounts payable at one or more specified times or intervals during the premium paying period. The specified amounts may be defined as equal to all or a stated portion of the premiums paid during a specified period, with or without interest, or the amounts of the payments may be defined without regard to the premiums.

Cross References

31.10.13.04

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.03 Purpose.

The purpose of this chapter is to serve the interests of continuing policyholders and to afford reasonable protection to the interests of those policyholders who are forced to discontinue their policies prematurely by regulating the design of the policies in a manner which is equitable to the policyholder and which provides benefits reasonable in relation to the premium charged and which provides benefits of economic value to the insured.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.04 Construction.

The classification in Regulation .02 of this chapter applies to the benefit rather than to the policy. A policy may contain benefits of more than one type. Benefits of Type 2 and Type 3 are deemed supplementary to Type 1 benefits. Premiums for Type 2 benefits and Type 3 benefits are normally payable at the same time as premiums for other benefits of the policy, but payments of Type 2 and Type 3 benefits will normally be made only after the passage of a considerable period of time.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.05 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Guaranteed renewable” when used in connection with an individual health insurance policy means that the insured has the right to continue the policy in force by the timely payment of premiums:

(a) Until at least age 50; or

(b) In the case of a policy issued after age 44, for at least 5 years from its date of issue, during which period the insurer has no right to make unilaterally any change in any policy provision except the right to change premiums in accordance with the terms of the policy.

(2) “Withdrawal benefit” means:

(a) Any paid-up nonforfeiture benefit, for example, extended insurance for a limited period of time or insurance continued for the original term of the policy but for a reduced amount of benefit, providing coverage for morbidity risks; or

(b) Any cash surrender nonforfeiture benefit or any endowment or annuity payment which is payable without reference to any morbidity risk.

(3) “Morbidity risk” means any loss resulting from injury, sickness, childbirth, or health care.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.06 Type 1 Benefit.

Provision for a withdrawal benefit in connection with a nondeferred benefit, Type 1, is not required. However, provision for a withdrawal benefit in connection with a Type 1 benefit may be used at the insurer's option, if any payment under it is not greater than an amount corresponding to a reserve which might properly be held at the time of withdrawal with respect to the Type 1 benefit to which it is related.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.07 Type 2 or Type 3 Benefit.

A. No deferred benefit of Type 2 or Type 3, or any provision for a withdrawal benefit, may be used in any individual policy of health insurance unless the policy is guaranteed renewable.

B. An individual policy containing a provision for a Type 2 or Type 3 benefit shall make further provision for a withdrawal benefit. In the event of discontinuance by the policyholder on or after the fifth anniversary of the effective date of the policy, or any earlier date which the policy may specify, the withdrawal benefit shall be payable. The value of the withdrawal benefit before any reduction because of provision for claim payments offset (see §F of this regulation), shall be not less than an amount computed (without provision for claim payments offset for the purpose of this section) in the same manner as the minimum reserve required with respect to the Type 2 or Type 3 benefit to which it is related but on a 5-year preliminary term basis with an interest rate of 5 percent per annum, using mortality and morbidity tables which are approved by the Commissioner as acceptable for reserve purposes.

C. If the policy gives the policy owner the option of electing one of two or more withdrawal benefits, the right of election shall extend for at least 60 days after the date the policy ceases to be in force, and one of the withdrawal benefits shall be designated as the automatic benefit in event the policy owner does not make a timely election.

D. If the policy gives the policy owner the option of electing one of two or more withdrawal benefits, and one of these benefits provides for extended insurance, the extended insurance benefit shall be in effect from the date the policy lapses until the earlier of the date the policyholder exercises his option to elect an alternate benefit or until the date an alternate benefit becomes effective as an automatic withdrawal benefit. The insurer may deduct the cost of the extended insurance benefit from the value of an alternate withdrawal benefit which later becomes effective.

E. If the policy provides a cash surrender nonforfeiture benefit upon lapse before the expiry date stated in the policy, the insurer may provide the policyholder the option of electing an arrangement for automatic premium loans. The insurer may charge the amount advanced as automatic premium loans, together with interest thereon at an effective rate not to exceed 8 percent per annum, against the cash surrender value or against the value of any other withdrawal benefit which may later become effective under the policy.

F. Claim Payments Offset. An individual health insurance policy may provide that a Type 2 benefit or a Type 3 benefit, or any withdrawal benefit associated with a Type 2 or Type 3 benefit, shall be reduced because of prior claim payments under the policy. No provision may be used which could cause the amount of a Type 2 or Type 3 benefit, or any associated withdrawal benefit, to be reduced by more than the amount of any currently incurred and prior claims.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.08 Combining Withdrawal Provisions.

If a policy provides for withdrawal benefits in connection with more than one benefit or more than one type of benefit, provision for these withdrawal benefits may be combined in a single part of the policy.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.09 Death of an Insured.

Any cash withdrawal benefit provided by a policy shall be payable on death of an insured.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.10 Policies Insuring More Than One Life.

If a policy covers more than one life, any provision of the regulation defining a minimum withdrawal benefit shall be construed, when appropriate, to be applicable separately to each covered life. The benefit provision shall be specific in regard to the determination of the amount of benefits under these cases.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.11 Dividends.

For purposes of this chapter, dividends to policyholders may not be regarded as claims paid, but may be regarded as reductions of premiums paid.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.12 Premium Waiver.

For purposes of this chapter, a waived premium shall be regarded both as a premium paid and a claim paid.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.13 Premium Notices.

The insurer shall send the policyholder timely advance notice of each premium as it comes due, unless the premium installments are payable on a payroll savings or salary deduction plan, or by a series of preauthorized checks or bank drafts, or a similar plan.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

COMAR 31.10.13.14 Advertising.

A sales presentation or advertising concerning any Type 2 or Type 3 benefit may not state, or in any manner indicate or imply, or tend to cause the policyholder to believe, that any withdrawal benefit is provided free or without additional cost or charge to the policyholder.

History

Administrative History: Effective date: August 10, 1979 (6:16 Md. R. 1330)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.46 to COMAR 31.10.13 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 12-203—12-205, Annotated Code of Maryland

31.10.14 Minimum Loss Ratio with Respect to Specified Disease Policies

COMAR 31.10.14.01 Purpose.

The purpose of this chapter is to establish minimum loss ratios with respect to specified disease policies in order to assure that the benefits provided in those policies are reasonable in relation to the premium charged and may be approved under the requirements of Insurance Article, §§12-203—12-205, and 15-109, Annotated Code of Maryland.

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Claim reserve” means the sum of the present value of amounts not yet due on claims plus the reserve for future contingent benefits included in Exhibit 9, Part B of the Annual Statement. All numerical references to the Annual Statement in this regulation are to the National Association of Insurance Commissioners form for Life and Accident and Health insurers, current edition.

(2) “Claims liability” means the amount included in Line 4a of Exhibit 11, Part 1 of the Annual Statement.

(3) “Loss ratio” means the ratio of losses incurred to premiums earned on specified disease policies.

(4) “Policy reserves” means the sum of the additional reserves plus the reserve for future contingent benefits included in Lines 2 and 3 of Exhibit 9, Part A of the Annual Statement.

(5) “Premium reserve” means unearned premiums plus advance premiums plus reserve for dividends, refunds, and retrospective rate credits.

(6) “Premiums written” means premiums due during the current year and is equal to premiums collected during the current year plus premiums uncollected at the end of the current year less premiums uncollected at the end of the previous year.

(7) Specified Disease Policy.

(a) “Specified disease policy” means a health insurance policy that provides:

(i) Benefits only for a disease or diseases specified in the policy or for treatment unique to a specified disease or diseases; or

(ii) Additional benefits for a disease or diseases specified in the policy or for treatment unique to a specified disease or diseases, provided the actuarial net premium for the additional benefits exceeds 33 percent of the actuarial net premium for all of the health insurance benefits provided in the policy.

(b) If an insurer issues a health insurance policy to which a rider providing coverage for a specified disease or diseases may be added at the option of the policy owner and if the actuarial net premium for the benefits provided by the rider exceeds 33 percent of the actuarial net premium for all of the health insurance benefits provided by the policy including the rider, then either the policy to which the rider is attached, or the rider separately, shall be considered to be a “specified disease policy”, whichever the insurer elects.

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.03 Minimum Loss Ratio.

A. In order to assure that benefits under specified disease policies are reasonable in relation to the premium charged, the insurer shall establish premiums for specified disease policies in accordance with generally accepted actuarial principles and practices so as to return to policyholders in the form of aggregate benefits provided under the policy during the period for which rates are computed at least 75 percent of the aggregate premiums earned in the case of group and blanket policies, and at least 60 percent of the aggregate premiums earned in the case of individual policies.

B. Policies issued as a result of solicitation of individuals through the mail or mass media advertising, including both print and broadcast advertising, shall be considered individual policies for purposes of this regulation.

C. The benefits provided in a specified disease policy shall be considered unreasonable in relation to the premium charged if the actual or anticipated loss ratio is less than 75 percent in the case of group and blanket policies, or less than 60 percent in the case of individual policies.

Cross References

31.10.14.04

31.10.14.06A

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.04 Rate Filings.

In filing a specified disease policy for approval, the insurer shall also file the premium rates proposed to be charged for the policy and shall include an actuarial memorandum based on credible data to show that the anticipated loss ratio under the policy will be not less than the ratios required by Regulation .03 of this chapter. The actuarial memorandum shall describe how the rates were determined and how the anticipated loss ratio was calculated and shall include a general description and the source of each assumption used in the memorandum. This filing as well as those required under Regulations .05 and .06 of this chapter shall assume a reasonable rate of interest to be earned on claim and policy reserves.

Cross References

31.10.14.06A

31.10.14.06B

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.05 Reports to the Commissioner.

A. On or before June 30 of each calendar year, each insurer issuing specified disease policies in Maryland shall file with the Commissioner a report regarding the loss ratio being experienced under each specified disease policy form being issued by the insurer in this State. Experience with regard to substantially similar policy forms may be combined as if they were the same form.

B. The report as to each policy form or combination of similar policy forms shall show for each of the 5 preceding calendar years, or for the preceding years since the policy form was first issued, the following information regarding experience on direct business (before reinsurance ceded or assumed) issued, delivered, or renewed in Maryland:

(1) Premiums written;

(2) Dividends, refunds, and retrospective rate credits paid or allowed;

(3) Premiums written net of §B(2) of this regulation;

(4) Premium reserve at end of previous year;

(5) Premium reserve at end of current year;

(6) Premiums earned (§B(3) + (4) - (5));

(7) Claims paid;

(8) Claims liability at end of current year;

(9) Claim reserve at end of current year;

(10) Policy reserves at end of current year;

(11) Claims liability at end of previous year;

(12) Claim reserve at end of previous year;

(13) Policy reserves at end of previous year;

(14) Losses incurred (§B(7) + (8) + (9) + (10) - (11) - (12) - (13));

(15) Loss ratio (§B(14) divided by (6)).

C. If the amount of the insurer's specified disease business in Maryland is not sufficient to make the report credible from a statistical standpoint, upon application to and with the approval of the Commissioner, the insurer may make the report based on its entire national experience.

Cross References

31.10.14.06A

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.06 Procedure for Rate Reduction.

A. If the report referred to in Regulation .05 of this chapter with respect to a policy form or combination of similar policy forms indicates that the form or forms are not meeting the loss ratio requirements of Regulation .03 of this chapter, the insurer, within 30 days after the due date of the report, shall file for an appropriate reduction in premium to be effective not later than 90 days after the due date of the report. The filing shall include an actuarial memorandum as described in Regulation .04 of this chapter. If the insurer does not propose a reduced premium which in the opinion of the Commissioner meets the requirements of these regulations, the Commissioner shall afford the insurer a hearing upon due notice. If, as a result of the hearing, the Commissioner finds that the premium proposed to be charged by the insurer would not be likely to result in a loss ratio meeting the requirements of these regulations, he may withdraw approval of the affected policy form or forms in accordance with Insurance Article, §12-203(c)(5), Annotated Code of Maryland.

B. If a reduced premium is required, the insurer may offer the policy owner the option of obtaining increased benefits instead of the reduction in premium. The proposed benefit increase should be filed in accordance with Regulation .04 of this chapter.

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.14.07 Applicability.

These regulations apply to all insurers to whom Insurance Article, §15-109, Annotated Code of Maryland, is applicable.

History

Administrative History: Effective date: March 15, 1982 (9:5 Md. R. 527)
Administrative History: Regulation .02B amended effective November 6, 1995 (22:22 Md. R. 1657)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.57 to COMAR 31.10.14 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .07 amended effective September 21, 2009 (36:19 Md. R. 1439)
Authority: Insurance Article, §§2-109, 12-203—12-205, and 15-109, Annotated Code of Maryland

COMAR 31.10.15 Substantial, Available, and Affordable Coverage Plan [Repealed]

History

Administrative History: Effective date: October 11, 1993 (20:20 Md. R. 1570)
Administrative History: Chapter recodified from COMAR 09.30.96 to COMAR 31.10.15 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter, Reporting of Benefits for Child Wellness Services and Mammograms, repealed effective October 5, 1998 (25:20 Md. R. 1534)
Administrative History: ——————
Administrative History: Regulations .01—.10, Substantial, Available, and Affordable Coverage Plan, adopted effective November 16, 1998 (25:23 Md. R. 1697)
Administrative History: Regulation .01 amended as an emergency provision effective June 28, 1999 (26:15 Md. R. 1146); emergency status expired December 15, 1999
Administrative History: Regulation .01E amended as an emergency provision effective November 10, 1999 (26:25 Md. R1896); emergency status expired April 5, 2000
Administrative History: Regulation .01E amended as an emergency provision effective April 5, 2000 (27:8 Md. R. 795); amended permanently effective July 24, 2000 (27:14 Md. R. 1344)
Administrative History: ——————
Administrative History: Chapter revised as an emergency provision effective August 7, 2000 (27:19 Md. R. 1724); revised permanently effective November 27, 2000 (27:23 Md. R. 2150)
Administrative History: Regulation .01E amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: Regulation .02B amended effective March 18, 2002 (29:5 Md. R. 506)
Administrative History: Regulation .03A amended effective April 16, 2001 (28:7 Md. R. 692); March 18, 2002 (29:5 Md. R. 506)
Administrative History: Regulation .04E amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: Regulation .05H amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: Regulation .06B amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: Regulation .08A amended effective March 18, 2002 (29:5 Md. R. 506)
Administrative History: Regulation .08C amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: Regulation .10 amended effective April 16, 2001 (28:7 Md. R. 692)
Administrative History: ——————
Administrative History: Chapter repealed effective June 17, 2008 (35:12 Md. R. 1121)

31.10.16 Carrier Provider Panels — Application Process

COMAR 31.10.16.01 Applicability.

This chapter applies to all insurers, nonprofit health service plans, health maintenance organizations, dental plans, and to any other person or organization which utilizes a provider panel and which provides health benefit plans subject to regulation in this State.

History

Administrative History: Effective date: June 17, 1996 (23:12 Md. R. 870)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.13 to COMAR 31.10.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03C amended effective April 21, 2008 (35:8 Md. R. 812)
Administrative History: Regulation .03D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03F amended effective December 23, 2002 (29:25 Md. R. 1984)
Administrative History: Regulation .05B amended effective December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109 and 15-112, Annotated Code of Maryland

COMAR 31.10.16.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Carrier.

(a) “Carrier” means:

(i) An insurer;

(ii) A nonprofit health service plan;

(iii) A health maintenance organization;

(iv) A dental plan organization; and

(v) Any other person or organization that provides health benefit plans subject to State regulation.

(b) “Carrier” includes an entity that arranges a provider panel for a carrier.

(2) “Provider” means a health care practitioner or a group of health care practitioners licensed or otherwise authorized by law to provide health care services.

(3) Provider Panel.

(a) “Provider panel” means those providers with which a carrier contracts to provide health care services to the carrier's enrollees under the carrier's health benefit plan.

(b) “Provider panel” does not include an arrangement between a carrier and providers in which a provider may participate solely on the basis of the provider's contracting with the carrier to provide services at a discounted fee-for-service rate.

History

Administrative History: Effective date: June 17, 1996 (23:12 Md. R. 870)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.13 to COMAR 31.10.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03C amended effective April 21, 2008 (35:8 Md. R. 812)
Administrative History: Regulation .03D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03F amended effective December 23, 2002 (29:25 Md. R. 1984)
Administrative History: Regulation .05B amended effective December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109 and 15-112, Annotated Code of Maryland

COMAR 31.10.16.03 Requirements for Application Process.

A. A carrier that utilizes a provider panel shall establish written procedures for reviewing applications for participation in the provider panel.

B. A carrier that utilizes a provider panel shall, upon request, make its applications publicly available.

C. The form of application:

(1) Shall include instructions for completion of the application;

(2) Shall provide a specifically designated space for dating the receipt of the application by the carrier; and

(3) Shall comply with federal and State laws concerning the Americans with Disability Act.

D. A carrier shall maintain an application log which, at a minimum, provides the following information:

(1) Name of the provider requesting or submitting the application;

(2) Date the provider requested an application, if applicable;

(3) Date the application is sent or delivered to the provider, if applicable;

(4) Date the application is received from the provider;

(5) Date the application is returned to the provider with a request for additional information to complete the application, if applicable;

(6) Date of receipt by the carrier of an application previously returned for additional information, if applicable;

(7) Date that the provider is notified of:

(a) Rejection, or

(b) Carrier's intent to continue the credentialing process; and

(8) Date after completion of credentialing that the provider is notified of acceptance or rejection in the provider panel.

E. The log shall be available for inspection by the Commissioner.

F. Notice.

(1) A carrier shall:

(a) If the carrier maintains a web site:

(i) Post on the web site a notice of how to apply to the carrier's provider panel; and

(ii) Provide, on request, a paper copy of the notice of how to apply to the carrier's provider panel; or

(b) If the carrier does not maintain a web site, provide on request a paper copy of the notice of how to apply to the carrier's provider panel.

(2) The notice required pursuant to §F(1) of this regulation shall include relevant addresses and telephone numbers for contact purposes.

History

Administrative History: Effective date: June 17, 1996 (23:12 Md. R. 870)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.13 to COMAR 31.10.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03C amended effective April 21, 2008 (35:8 Md. R. 812)
Administrative History: Regulation .03D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03F amended effective December 23, 2002 (29:25 Md. R. 1984)
Administrative History: Regulation .05B amended effective December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109 and 15-112, Annotated Code of Maryland

COMAR 31.10.16.04 Application Fees.

A. A carrier may charge a reasonable fee for any application that a provider submits to the carrier.

B. The fee shall be nonrefundable and uniform for all applicants within a practice specialty.

C. The fee may not exceed $75 for each provider application.

D. A carrier may not charge additional fees for processing an application which was returned because of insufficient information.

History

Administrative History: Effective date: June 17, 1996 (23:12 Md. R. 870)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.13 to COMAR 31.10.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03C amended effective April 21, 2008 (35:8 Md. R. 812)
Administrative History: Regulation .03D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03F amended effective December 23, 2002 (29:25 Md. R. 1984)
Administrative History: Regulation .05B amended effective December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109 and 15-112, Annotated Code of Maryland

COMAR 31.10.16.05 Document Retention.

A. A carrier shall maintain its provider application log for a minimum of 3 years or until its next market conduct examination, whichever occurs last.

B. A carrier shall:

(1) Date stamp each application received from a provider upon initial receipt; and

(2) Maintain a legible copy of each application, and any correspondence regarding that application, for a minimum of 3 years or until its next market conduct examination, whichever occurs last.

History

Administrative History: Effective date: June 17, 1996 (23:12 Md. R. 870)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.13 to COMAR 31.10.16 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .03C amended effective April 21, 2008 (35:8 Md. R. 812)
Administrative History: Regulation .03D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .03F amended effective December 23, 2002 (29:25 Md. R. 1984)
Administrative History: Regulation .05B amended effective December 6, 2018 (45:24 Md. R. 1164)
Authority: Insurance Article, §§2-109 and 15-112, Annotated Code of Maryland

31.10.17 Health Care Consumer Information and Education Act

COMAR 31.10.17.01 Scope.

This chapter applies to all carriers that provide health care services to enrollees or otherwise make health care services available to enrollees through contracts with providers.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A dental plan organization;

(e) Any person or entity acting as a third-party administrator; or

(f) Except for a managed care organization as defined in Health-General Article, Title 15, Subtitle 1, Annotated Code of Maryland, any other person that provides health benefit plans subject to regulation by the State.

(2) “Enrollment sales materials” means any materials provided by a carrier to:

(a) An employer at the time of plan selection; or

(b) Enrollees at the time of enrollment.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.03 Information to be Disclosed.

A. Each carrier that provides health care services to enrollees, or otherwise makes health care services available to enrollees through contracts with providers, shall disclose in its enrollment sales material the:

(1) Methodology or methodologies that the carrier uses to compensate the physicians for health care services rendered to enrollees; and

(2) Distribution of each $100 it receives in premium dollars from enrollees for the preceding calendar year.

B. The information required to be disclosed under §A of this regulation shall be based on Maryland-specific information.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.04 Disclosure of Compensation Methodologies.

A. Each carrier shall include the following in its enrollment sales materials:

(1) The following disclosure statement typeset in bold italic type:

"Our compensation to physicians who offer health care services to our insured members or enrollees may be based on a variety of payment mechanisms such as fee-for-service payments, salary, or capitation. Bonuses may be used with these various types of payment methods.

If you desire additional information about our methods of paying physicians, or if you want to know which method(s) apply to your physician, please call us (name) at (phone number) or write (address).";

(2) The table, specified in §C of this regulation, defining methods of paying physicians and giving an example of each method; and

(3) A statement of:

(a) The payment method or methods used to compensate physicians during the preceding year, and

(b) An estimated percentage of physicians under contract with the carrier compensated by each payment method.

B. Requests Pursuant to Disclosure.

(1) Each carrier shall provide information in response to requests made pursuant to the disclosure requirement set forth in §A(1) of this regulation with respect to provider compensation by disclosing the method by which a specific physician is compensated.

(2) A carrier is not required to state the dollar amount of compensation or otherwise provide more specific information about the compensation arrangement it has with a specific physician.

C. Methods of Paying Physicians.

| This table shows definitions of how insurance carriers may pay physicians for your health care services with a simple example of how each payment mechanism works. | | | --- | --- | | Terms | The example shows how Dr. Jones, an obstetrician gynecologist, would be compensated under each method of payment. | | Salary | A physician is an employee of the HMO and is paid compensation (monetary wages) for providing specific health care services. Since Dr. Jones is an employee of an HMO, she receives her usual bi-weekly salary regardless of how many patients she sees or the number of services she provides. During the months of providing prenatal care to Mrs. Smith, who is a member of the HMO, Dr. Jones' salary is unchanged. Although Mrs. Smith's baby is delivered by Cesarean section, a more complicated procedure than a vaginal delivery, the method of delivery will not have any effect upon Dr. Jones' salary. | | Capitation | A physician (or group of physicians) is paid a fixed amount of money per month by an HMO for each patient who chooses the physician(s) to be his or her doctor. Payment is fixed without regard to the volume of services that an individual patient requires. Under this type of contractual arrangement, Dr. Jones participates in an HMO network. She is not employed by the HMO. Her contract with the HMO stipulates that she is paid a certain amount each month for patients who select her as their doctor. Since Mrs. Smith is a member of the HMO, Dr. Jones' monthly payment does not change as a result of her providing ongoing care to Mrs. Smith. The capitation amount paid to Dr. Jones is the same whether or not Mrs. Smith requires obstetric services. | | Fee-for-Service | A physician charges a fee for each patient visit, medical procedure, or medical service provided. An HMO pays the entire fee for physicians it has under contract and an insurer pays all or part of that fee, depending on the type of coverage. The patient is expected to pay the remainder. Dr. Jones' contract with the insurer or HMO states that Dr. Jones will be paid a fee for each patient visit and each service she provides. The amount of payment Dr. Jones receives will depend upon the number, types, and complexity of services, and the time she spends providing services to Mrs. Smith. Because Cesarean deliveries are more complicated than vaginal deliveries, Dr. Jones is paid more to deliver Mrs. Smith's baby than she would be paid for a vaginal delivery. Mrs. Smith may be responsible for paying some portion of Dr. Jones' bill. | | Discounted Fee-for-Service | Payment is less than the rate usually received by the physician for each patient visit, medical procedure, or service. This arrangement is the result of an agreement between the payer, who gets lower costs and the physician, who usually gets an increased volume of patients. Like fee-for-service, this type of contractual arrangement involves the insurer or HMO paying Dr. Jones for each patient visit and each delivery; but, under this arrangement, the rate, agreed upon in advance, is less than Dr. Jones' usual fee. Dr. Jones expects that in exchange for agreeing to accept a reduced rate, she will serve a certain number of patients. For each procedure that she performs, Dr. Jones will be paid a discounted rate by the insurer or HMO. | | Bonus | A physician is paid an additional amount over what he or she is paid under salary, capitation, fee-for-service, or other type of payment arrangement. Bonuses may be based on many factors, including member satisfaction, quality of care, control of costs, and use of services. An HMO rewards its physician staff or contracted physicians who have demonstrated higher than average quality and productivity. Because Dr. Jones has delivered so many babies and she has been rated highly by her patients and fellow physicians, Dr. Jones will receive a monetary award in addition to her usual payment. | | Case Rate | The HMO or insurer and the physician agree in advance that payment will cover a combination of services provided by both the physician and hospital for an episode of care. This type of arrangement stipulates how much an insurer or HMO will pay for a patient's obstetric services. All office visits for prenatal and postnatal care, as well as the delivery, and hospital-related charges are covered by one fee. Dr. Jones, the hospital, and other providers (such as an anesthesiologist) will divide payment from the insurer or HMO for the care provided to Mrs. Smith. |

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.05 Disclosure of Distribution of Premium Dollars.

A. The disclosure required under this regulation shall:

(1) Be in the form of a pie chart or bar graph; and

(2) Identify, in layman's terms, the proportion of every $100 in premium dollars that the carrier uses to pay:

(a) Providers for the provision of health care services to enrollees, including what proportion is for direct medical care expenses, and

(b) For plan administration.

B. The computation used in the pie chart or bar graph shall be in accordance with the National Association of Insurance Commissioners' instructions and formulas used in deriving the 5-year historical data page of the carrier's annual statement.

C. The pie chart or bar graph to be included in enrollment sales material shall be based on the annual statement of the:

(1) Immediate prior year for enrollment sales material used on or after July 1 of each year; and

(2) Year before the immediate prior year for enrollment sales material used before July 1 of each year.

D. The computation used under §B of this regulation shall be limited to benefits under policies which make health care services available through contracts with providers.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.06 Manner of Disclosure.

The disclosures required by this chapter may be on a separate form, which shall be provided to employers at the time of plan selection and to enrollees at the time of enrollment.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

COMAR 31.10.17.07 Other Permitted Disclosures.

A. A carrier may disclose on the pie chart or bar graph that the administrative expenses do not include taxes.

B. A carrier may disclose on the pie chart or bar graph whether the carrier includes dental benefits as part of the underlying benefit plan.

History

Administrative History: Effective date: July 12, 1998 (25:14 Md. R. 1132)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.26 to COMAR 31.10.17 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-121; Health-General Article, §19-706; Annotated Code of Maryland

31.10.18 Denials of Coverage Based on Medical Necessity

COMAR 31.10.18.01 Scope.

This chapter applies to carriers and to private review agents to whom the internal grievance process has been delegated by a carrier.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Adverse Decision.

(a) “Adverse decision” means a utilization review determination by a private review agent, a carrier, or a health care provider acting on behalf of a carrier that:

(i) A proposed or delivered health care service which would otherwise be covered under the member's contract is not or was not medically necessary, appropriate, or efficient; and

(ii) May result in noncoverage of the health care service.

(b) “Adverse decision” does not include a decision concerning a person's status as a member.

(2) “Carrier” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(3) “Complaint” means a protest filed with the Commissioner involving an adverse decision or grievance decision concerning a member.

(4) “Emergency case” means a case involving an adverse decision for which an expedited review is required under Regulation .05 of this chapter.

(5) “Filing date” means the earlier of:

(a) 5 days after the date of mailing; or

(b) The date of receipt.

(6) “Grievance” means a protest filed by a member, a member’s representative, or a health care provider on behalf of a member with a carrier through the carrier's internal grievance process regarding an adverse decision concerning the member.

(7) “Grievance decision” means a final determination by a carrier that arises from a grievance filed with the carrier under its internal grievance process regarding an adverse decision concerning a member.

(8) “Health Advocacy Unit” means the Health Education and Advocacy Unit in the Division of Consumer Protection of the Office of the Attorney General established under Commercial Law Article, Title 13, Subtitle 4A, Annotated Code of Maryland.

(9) “Health care provider” means:

(a) An individual who is:

(i) Licensed or otherwise authorized in this State to provide health care services in the ordinary course of business or practice of a profession, and

(ii) A treating provider of a member; or

(b) A hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland.

(10) “Health care service” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(11) Member.

(a) “Member” means a person entitled to health care benefits under a policy, plan, or certificate issued or delivered in the State by a carrier.

(b) “Member” includes:

(i) A subscriber; and

(ii) Unless preempted by federal law, a Medicare recipient.

(12) “Member’s representative” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(13) “Private review agent” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.03 Repealed.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.04 Health Advocacy Unit Information in Notice of Adverse Decision.

A carrier shall include in each notice of adverse decision the following disclosure in at least 12-point typeface, with the first sentence in bold capital typeface:

"THERE IS HELP AVAILABLE TO YOU IF YOU WISH TO DISPUTE THE DECISION OF THE PLAN ABOUT PAYMENT FOR HEALTH CARE SERVICES. You may contact the Health Advocacy Unit of Maryland's Consumer Protection Division at (phone number, address, fax, e-mail).

The Health Advocacy Unit can help you, your representative, and your health care provider prepare a grievance to file under the carrier's internal grievance procedure. That unit can also attempt to mediate a resolution to your dispute. The Health Advocacy Unit is not available to represent or accompany you during any proceeding of the internal grievance process.

Additionally, you, your representative, or your health care provider may file a complaint with the Maryland Insurance Administration, without having to first file a grievance with the plan, if:

(1) The plan has denied authorization for a health care service not yet provided to you; and

(2) You, your representative, or your provider can show a compelling reason to file a complaint, including that a delay in receiving the health care service could result in loss of life, serious impairment to a bodily function, or serious dysfunction of a bodily organ or part, or the member remaining seriously mentally ill with symptoms that cause the member to be in danger to self or others. INFORMATION DESCRIBED IN THIS NOTICE MAY ALSO BE FOUND IN (cite policy, plan, certificate, enrollment materials, or other evidence of coverage)."

Cross References

31.10.18.05B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.05 Procedures for Emergency Cases.

A. An expedited review of an adverse decision in accordance with this regulation is required if the:

(1) Adverse decision is rendered for health care services that are proposed but have not been delivered; and

(2) Services are necessary to treat a condition or illness that, without immediate medical attention, would:

(a) Seriously jeopardize the life or health of the member of the member’s ability to regain maximum functions;

(b) Cause the member to be in danger to self or others; or

B. The content of any written notice by a carrier of an adverse decision or grievance decision under this regulation shall comply with Regulation .04 of this chapter and Insurance Article, §15-10A-02(f) and(i), Annotated Code of Maryland.

Cross References

31.10.18.02B(4)

31.10.19.01B(5)

31.10.19.07A

31.10.21.01B(9)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.06 Establishment, Filing, and Reporting of Internal Grievance Process.

A. Each carrier shall establish an internal grievance process.

B. Each carrier shall:

(1) File with the Commissioner its internal grievance process not more than 30 days after the effective date of this chapter;

(2) File with the Commissioner each amendment to its internal process at least 30 days before its intended use;

(3) Include with the filing the circumstances, if any, under which the internal grievance process will be delegated to a private review agent;

(4) Include with the filing a copy of the applicable part of the policy, plan, certificate, enrollment materials, or other evidence of coverage that shows the information required under Insurance Article, §15-10A-02(k), Annotated Code of Maryland; and

(5) Submit to the Health Advocacy Unit the document describing the details of its internal grievance process and procedures that the carrier will send to a member, member’s representative, or health care provider when the member, member’s representative, or provider contacts the carrier about an adverse decision.

C. Each carrier shall submit its internal grievance process and any amendments to the Health Advocacy Unit not later than the date on which the carrier begins to use the process or amendment.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.07 Requirements for Internal Grievance Process.

An internal grievance process shall:

A. Meet the requirements established under this chapter; and

B. Include an expedited procedure for use in an emergency case for purposes of rendering a grievance decision within 24 hours after filing the grievance pursuant to the carrier's internal grievance process, that includes an explanation about:

(1) Who will make the determination whether an emergency case exists when a grievance asserts an emergency case,

(2) How the determination will be made about the existence of an emergency case,

(3) How the disclosure to the member, the member’s representative, or health care provider required by Insurance Article, §15-10A-02(g), Annotated Code of Maryland, will be provided when the grievance asserts that an emergency case exists; and

(4) How the notice to the member and, if applicable, the member’s representative and health care provider required by Insurance Article, §15-10A-02(i), Annotated Code of Maryland, will be provided when the grievance asserts that an emergency case exists.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.08 Time for Rendering Final Decisions Resulting from Internal Grievance Process.

A. Except as otherwise provided in this regulation, a carrier shall render a final decision on a grievance that involves a:

(1) Prospective denial in a nonemergency case within 30 working days after the filing date; and

(2) Retrospective denial within 45 working days after the filing date.

B. With the written consent of the member, member’s representative, or health care provider who filed a grievance on behalf of the member, a carrier may extend the period for making a final decision for an additional period of not longer than 30 working days.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.09 Repealed.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.10 Repealed.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.11 Demonstration of Compelling Reason to File Complaint.

A. A member, a member’s representative, or a health care provider on behalf of a member may file a complaint without first exhausting the internal grievance process of a carrier if the complaint demonstrates to the satisfaction of the Commissioner a compelling reason to do so. A compelling reason includes showing that the potential delay in receipt of a health care service until after the member or health care provider exhausts the internal grievance process and obtains a final decision under the grievance process could result in:

(1) Loss of life;

(2) Serious impairment to a bodily function;

(3) Serious dysfunction of a bodily organ;

(4) The member remaining seriously mentally ill or using intoxicating substances with symptoms that cause the member to be in danger to self or others; or

(5) The member continuing to experience severe withdrawal symptoms.

B. A member is considered to be in danger to self or others if the member is unable to function in activities of daily living or care for self without imminent dangerous consequences.

C. In a case involving a retrospective denial, there is no compelling reason to allow a member, a member’s representative, or a health care provider on behalf of a member to file a complaint without first exhausting the internal grievance process of a carrier.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

COMAR 31.10.18.12 General Procedures for Complaints.

A. Consent Form.

(1) For services rendered on or after January 1, 1999, the Commissioner shall request the signed consent of the member that filed the complaint, or a legally authorized designee of the member, authorizing the release of the member's medical records to the Commissioner or the Commissioner's designee that are needed in order for the Commissioner to make a final decision on the complaint.

(2) The Commissioner may refuse to investigate a complaint if the member or legally authorized designee of the member fails to sign a consent form.

(3) In the case of alcohol and drug abuse, the member shall deliver the member's medical records to the Health Advocacy Unit or to the Commissioner, or to both, pursuant to federal law and regulations.

B. The Commissioner may refer complaints not within the Commissioner's jurisdiction to the Health Advocacy Unit or any other appropriate federal or state government agency or unit for disposition or resolution.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective April 11, 2005 (32:7 Md. R. 686)
Administrative History: ——————
Administrative History: Chapter revised effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .05A amended effective July 30, 2018 (45:15 Md. R. 728)
Administrative History: Regulation .11 amended effective July 30, 2018 (45:15 Md. R. 728)
Authority: Insurance Article, §2-109 and Title 15, Subtitle 10A, Annotated Code of Maryland

31.10.19 Independent Review Organizations and Medical Experts

COMAR 31.10.19.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Adverse Decision.

(a) “Adverse decision” means a utilization review determination by a private review agent, a carrier, or a health care provider acting on behalf of a carrier that:

(i) A proposed or delivered health care service that is otherwise covered under the member's contract is not or was not medically necessary, appropriate, or efficient; and

(ii) May result in noncoverage of the health care service.

(b) “Adverse decision” does not include a decision concerning a subscriber's status as a member.

(2) “Affiliate” means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.

(3) “Carrier” means:

(a) An insurer that offers health insurance other than long-term care insurance or disability insurance;

(b) A nonprofit health service plan;

(d) A dental plan organization; or

(e) Any other person that provides health benefit plans subject to regulation by the State.

(4) “Complaint” means a protest filed with the Commissioner involving an adverse decision or grievance decision concerning a member.

(5) “Emergency case” means a case involving an adverse decision for which an expedited review is required under COMAR 31.10.18.05.

(6) “Expert reviewer” means a physician or other appropriate health care provider who contracts with or is retained by an independent review organization to conduct external review of a carrier's adverse decision pursuant to Insurance Article, §15-10A-05, Annotated Code of Maryland.

(7) “Health care provider” means:

(a) An individual who is:

(i) Licensed under the Health Occupations Article, Annotated Code of Maryland, or holds a nonrestricted license in a state of the United States to provide health care services in the ordinary course of business or practice of a profession, and

(ii) A treating provider of the member; or

(b) A hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland.

(8) “Health care service” means a health or medical care procedure or service rendered by a health care provider including:

(a) Testing, diagnosis, or treatment of a human disease or dysfunction;

(b) Dispensing of drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction; and

(c) Any other care, service, or treatment of disease or injury, the correction of defects, or the maintenance of the physical and mental well-being of human beings.

(9) “Independent review organization” means an entity that contracts with the Commissioner to conduct independent review of a carrier's adverse decision pursuant to Insurance Article, §15-10A-05, Annotated Code of Maryland.

(10) “Medical expert” means a physician or other appropriate health care provider who contracts with the Commissioner to conduct external review of a carrier's adverse decision pursuant to Insurance Article, §15-10A-05, Annotated Code of Maryland.

(11) “Medical record” has the meaning stated in Health-General Article, §4-301, Annotated Code of Maryland.

(12) Member.

(a) “Member” means a person entitled to health care benefits under a policy, plan, or certificate issued or delivered in the State by a carrier.

(b) “Member” includes:

(i) A subscriber; and

(ii) Unless preempted by federal law, a Medicare recipient.

(13) “Member’s representative” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(14) “Private review agent” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.02 Use of Independent Review Organizations and Medical Experts.

A. In cases considered appropriate by the Commissioner, the Commissioner shall seek advice concerning adverse decisions from an independent review organization or medical expert, as provided in Insurance Article, §15-10A-05, Annotated Code of Maryland.

B. For any independent review organization or medical expert that contracts with the Commissioner, the independent review organization or medical expert shall have a quality assurance mechanism in place that assures the:

(1) Timeliness and quality of the reviews;

(2) Qualifications and independence of the expert reviewers and the independent review organization, or the medical expert; and

(3) Confidentiality of medical records and review materials, consistent with federal and State laws.

C. An independent review organization seeking to contract with the Commissioner shall submit to the Commissioner a copy of the accreditation certificate issued by a nationally recognized private accrediting organization.

D. An independent review organization designated by the Commissioner to review an adverse decision shall have the authority and powers as delegated by the Commissioner for the following functions related to conducting an independent review:

(1) Obtaining all information relative to the complaint from the carrier, the provider, the member, and the member’s representative;

(2) Assigning the expert reviewer for review of an adverse decision; and

(3) Performing conflicts checks relative to the independent review organization and the expert reviewer assigned to review the adverse decision.

E. A medical expert designated by the Commissioner to review an adverse decision shall have the authority and powers, as delegated by the Commissioner, for obtaining all information relative to the complaint from the:

(1) Carrier;

(2) Provider;

(3) Member; and

(4) Member’s representative.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.03 Conflicts of Interest Standards for Independent Review Organizations and Medical Experts.

A. An independent review organization or medical expert may not be an affiliate of a trade association of:

(1) Health benefit plans; or

(2) Health care providers.

B. The independent review organization shall provide to the Commissioner the following:

(1) The name and biographical information for each director, officer, and management employee of the independent review organization, and a description of any relationship, either direct or indirect, the named individual has that represents ownership of or income from any of the following entities:

(a) A health maintenance organization;

(b) An insurer;

(d) A nonprofit health corporation;

(e) A carrier dental plan organization;

(f) A health care provider or health care provider group; or

(g) Any group acting on behalf of any of the entities described by §B(1)(a)—(f) of this regulation;

(2) If the independent review organization is a publicly held organization, the names of all stockholders and owners of more than 5 percent of any stock or options of the independent review organization;

(3) The names of all holders of bonds or notes in excess of $100,000;

(4) A list of any currently outstanding loans or contracts to provide services between the independent review organization and any entity listed in §B(1) of this regulation;

(5) The names of all affiliates of the independent review organization and the nature and extent of any ownership or control, including:

(a) The affiliate's type of business; and

(b) A chart or list clearly identifying the relationships between the independent review organization and any affiliates; and

(6) A list of any currently outstanding loans or contracts to provide services between the independent review organization and any affiliates.

C. The medical expert, or independent review organization on behalf of the expert reviewer, shall provide to the Commissioner the following:

(1) The name and biographical information for the medical expert or expert reviewer, and a description of any relationship, either direct or indirect, the medical expert or expert reviewer has which represents ownership of or income from any of the following entities:

(a) A health maintenance organization;

(b) An insurer;

(d) A nonprofit health organization;

(e) A carrier dental plan organization;

(f) A health care provider or health care provider group; or

(g) Any group activity on behalf of any of the entities described by §C(1)(a)—(f) of this regulation;

(2) A list of any currently outstanding loans or contracts to provide services between the medical expert or expert reviewer and any entity listed in §B(1) of this regulation;

(3) The names of all affiliates of the medical expert or expert reviewer and the nature and extent of any ownership or control, including:

(a) The affiliate's type of business; and

(b) A chart or list clearly identifying the relationships between the medical expert or expert reviewer and any of the affiliates; and

(4) A list of any currently outstanding loans or contracts to provide services between the medical expert or expert reviewer and any affiliates.

D. An expert reviewer assigned by an independent review organization or a medical expert selected by the Commissioner may not have a material professional, familial, or financial conflict of interest with any of the following:

(1) The carrier that is the subject of the complaint;

(2) Any officer, director, or management employee of the carrier that is the subject of the complaint;

(3) The member that is subject to the adverse decision;

(4) The health care provider, the health care provider's medical group, or the independent practice association that rendered or is proposing to render the health care service that is under review;

(5) The health care facility at which the health care service was provided or will be provided; or

(6) The developer or manufacturer of the principal drug, device, procedure, or other therapy that is being proposed for the member.

E. The independent review organization or medical expert shall report any material changes in the information submitted to the Commissioner not later than the 30th day before the date on which the change takes effect.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.04 Assignment of an Independent Review Organization or Medical Expert.

A. Concurrently with the assignment of a complaint to an independent review organization or a medical expert, the Commissioner shall notify the member, member’s representative, or health care provider acting on behalf of the member, and the carrier of the assignment.

B. If the complaint is assigned to an independent review organization, the independent review organization shall screen its expert reviewer for potential material conflicts of interest.

C. The Commissioner shall have the discretion to determine whether a material conflict of interest exists for the expert reviewer of an independent review organization or the medical experts subject to this regulation and as provided by Insurance Article, §15-10A-05, Annotated Code of Maryland.

D. An expert reviewer or medical expert shall:

(1) Be an expert in the treatment of the member's specific medical condition;

(2) Be knowledgeable about the recommended health care service or treatment through actual clinical experience as determined by the Commissioner based on the period of time:

(a) Actually treating patients with the same or similar specific medical condition, and

(b) That has elapsed between the clinical experience and the present;

(3) Hold:

(a) A nonrestricted license as a physician or other appropriate health care provider in a state of the United States; and

(b) For physicians, a current certification by a recognized American Medical Specialty Board in the area appropriate to the subject of review;

(4) Be licensed in the same health care occupation as the health care provider who considers the health care service that is the subject of the carrier's adverse decision to be medically necessary, appropriate, or efficient; and

(5) Have no history of disciplinary investigations, actions, or sanctions, including loss of staff privileges or participation restrictions that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body, that raises a substantial question as to the expert reviewer's or medical expert's physical, mental or professional competence or moral character as determined by the Commissioner.

E. To allow the Commissioner to determine whether an expert reviewer assigned by the independent review organization or a medical expert has a history of disciplinary investigations, actions, or sanctions that raises a substantial question as to the expert reviewer's or medical expert's physical, mental, or professional competence or moral character, the independent review organization or medical expert shall disclose to the Commissioner any:

(1) Pending investigation or action against the expert reviewer or medical expert relating to health care of which the expert reviewer or medical expert has notice, and the nature of the action;

(2) Civil or criminal investigation or action against the expert reviewer or medical expert relating to health care, and the nature of the action; and

(3) Investigation, conviction, or plea of guilty or nolo contendere with respect to a crime of moral turpitude against the expert reviewer or medical expert, regardless of whether any appeal or other proceeding is pending to have the conviction or plea set aside.

F. The information relevant to the consideration by the Commissioner of whether the expert reviewer or medical expert meets the requirements of this regulation will be handled in accordance with State Government Article, §10-618, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.05 Independent Review.

A. In conducting a review of an adverse decision, each independent review organization or medical expert shall, after reviewing all relevant medical and contractual information, advise the Commissioner in writing on whether the service was medically necessary.

B. The advice to the Commissioner shall state in writing the specific factual bases for the decision of the expert reviewer or the medical expert and reference the specific criteria and standards, including interpretive guidelines, on which the expert reviewer's or the medical expert's decision was based.

C. The Commissioner shall preserve the confidentiality of commercial information and a member's medical records and personal records in accordance with:

(1) State Government Article, §10-611 et seq., Annotated Code of Maryland;

(2) Health-General Article, §4-301, Annotated Code of Maryland; and

(3) Any pertinent federal laws.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.06 Payment of Fees.

A. The carrier that is the subject of the complaint is responsible for paying the reasonable expenses for the complaint under review by the independent review organization or medical expert selected by the Commissioner.

B. The independent review organization or medical expert for each complaint under review shall:

(1) Present to the carrier:

(a) An invoice detailing the expenses incurred by the independent review organization or medical expert related to the complaint under review, and

(b) Any other information required in the event that the contract between the independent review organization or the medical expert and the Commissioner requires a flat fee; and

(2) Provide a copy of the invoice for each complaint under review to the Commissioner.

C. Payment by Carrier.

(1) A carrier shall pay the reasonable expenses of an independent review organization or medical expert related to the complaint under review directly within 30 days of receipt of an invoice.

(2) Failure by a carrier to pay an invoice from an independent review organization or medical expert for the complaint under review within 30 days of receipt shall result in the issuance of an order for payment by the Commissioner.

(3) Failure by a carrier to pay in accordance with the order for payment issued by the Commissioner shall constitute a violation of the Insurance Article and the Health-General Article, Annotated Code of Maryland, subject to penalty pursuant to Health-General Article, §19-730, Annotated Code of Maryland, and Insurance Article, §27-305, Annotated Code of Maryland.

D. The carrier that is the subject of the complaint may not pay and an independent review organization or medical expert may not accept any compensation for the complaint under review in addition to the payment for reasonable expenses under §A of this regulation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

COMAR 31.10.19.07 Time for Rendering Final Decisions on Complaints.

A. Except for an emergency case as provided in COMAR 31.10.18.05 or as provided in §B of this regulation, the Commissioner shall make a final written decision on a complaint within 45 days after a complaint is filed.

B. The Commissioner may extend the period within which a final written decision is to be made under §A of this regulation for up to an additional 30 working days if the:

(1) Commissioner has not yet received the information requested by the Commissioner; and

(2) Information requested is necessary for the Commissioner to render a final written decision on the complaint.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (25:26 Md. R. 1917); adopted permanently effective February 22, 1999 (26:4 Md. R. 274)
Administrative History: Regulation .01B amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .02 amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .04A, D amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .06C amended effective April 16, 2012 (39:7 Md. R. 496)
Administrative History: Regulation .07 amended effective April 16, 2012 (39:7 Md. R. 496)
Authority: Insurance Article, §§2-109, 15-10A-05, and 15-10A-09, Annotated Code of Maryland;

31.10.20 Certification of HMO Medical Directors

COMAR 31.10.20.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Board” means the State Board of Physician Quality Assurance established under Health Occupations Article, Title 14, Annotated Code of Maryland.

(3) “Certificate” means a certificate, issued by the Commissioner under this chapter, to act as a medical director.

(4) “Commissioner” means the State Insurance Commissioner.

(5) “Contact information” means an individual’s name, job title and department, address, telephone number, facsimile number, and email address.

(6) “Department” means the Maryland Department of Health.

(7) “Governing authority” means the person or persons designated in the bylaws with the responsibility for operating the health maintenance organization.

(8) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(9) Medical Director.

(a) “Medical director” means a physician employed by or under contract with a health maintenance organization who is responsible for:

(i) The establishment or maintenance of the policies and procedures at the health maintenance organization for quality assurance and utilization management;

(ii) Compliance with the quality assurance and utilization management policies and procedures of the health maintenance organization; and

(iii) Oversight of utilization review decisions of private review agents employed by or under contract with the health maintenance organization.

(b) “Medical director” includes an associate medical director or an assistant medical director who has been delegated any of the functions of a medical director.

(10) “Quality assurance” means a formal set of activities to review the quality of medical services provided to those persons covered by the health maintenance organization including implementation of corrective actions to address any deficiencies identified in the care and services provided to those persons covered by the health maintenance organization.

(11) “Utilization management” means the process of evaluating and determining the appropriateness of the utilization of covered medical services, including prior authorization, concurrent review, retrospective review, discharge planning, and case management.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

COMAR 31.10.20.02 Issuance of a Temporary Certificate.

A. Not later than the date of hire, a medical director seeking temporary certification shall submit to the Commissioner an application for certification on a form specified by the Commissioner.

B. The medical director shall attach the following additional information to the application:

(1) A description of the applicant's professional qualifications, including medical education, medical training and experience, clinical experience, history of malpractice claims; and licensures;

(2) Evidence of one of the following:

(a) An advanced health-related degree;

(b) Current board certification from either the American Board of Medical Specialties (ABMS) or the American Osteopathic Association (AOA); or

(3) Evidence of licensure status;

(4) Disclosure of any disciplinary action or sanction taken by any hospital, professional board, or regulating entity;

(5) The name, address, phone number, and facsimile number of the health maintenance organization, and the name of the governing authority of the health maintenance organization that the applicant is employed by or contracted with as a medical director; and

(6) The date of hire or expected date of hire.

C. A certificate issued under this regulation is effective for 90 days from the date of the applicant's employment as a medical director with the health maintenance organization.

D. Extension of Temporary Certificate.

(1) Unless the Commissioner extends for good cause under §D(2) of this regulation, a certificate issued under this regulation may not be renewed.

(2) At the Commissioner's discretion, the Commissioner may extend for good cause for a 30-day period a temporary certificate issued under this regulation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

COMAR 31.10.20.03 Certification.

A. A medical director shall hold a certificate from the Commissioner that authorizes the applicant to act as the medical director of a health maintenance organization.

B. To qualify for a certificate to act as a medical director of a health maintenance organization, the applicant:

(1) Shall be a physician licensed to practice medicine in Maryland;

(2) Shall have one of the following:

(a) An advanced health-related degree;

(b) Current board certification from either the American Board of Medical Specialties (ABMS) or the American Osteopathic Association (AOA); or

(3) May not receive any direct or indirect financial compensation that:

(a) Violates Health-General Article, §19-705.1, Annotated Code of Maryland; or

(b) Deters the delivery of medically appropriate care to an enrollee; and

(4) Shall be of good character and trustworthy.

C. An applicant for a certificate to act as a medical director of a health maintenance organization does not qualify if there is a history of disciplinary action or sanction taken by any hospital, professional board, or regulating entity that raises a substantial question as to the applicant's physical, mental, or professional competence.

D. An applicant seeking certification as a medical director shall submit to the Commissioner an application for certification on a form specified by the Commissioner.

E. A medical director shall submit to the Commissioner the contact information of one person who will be available to respond to inquiries from the Maryland Insurance Administration. If the contact information for the designated person changes, the medical director shall:

(1) Notify the Commissioner in writing within 30 days; and

(2) Provide new contact information.

F. The medical director shall attach the following additional information to the application:

(1) A description of the applicant's professional qualifications, including medical education, medical training and experience, history of malpractice claims, and licensures;

(2) Evidence of education;

(3) Evidence of internship or residency training;

(4) Evidence of board certification from either ABMS or AOA, as appropriate;

(5) Evidence of licensure status;

(6) Disclosure of any disciplinary action or sanction taken by any hospital, professional board, or regulating entity;

(7) Verification of status through the federal national practitioner data bank;

(8) Disclosure of all methods of compensation to the applicant by the health maintenance organization;

(9) Unless already on file with the Commissioner, the utilization management procedures and policies to be used by the health maintenance organization;

(10) Certification by the medical director that the utilization management procedures and policies are:

(a) Objective;

(b) Clinically valid;

(d) Flexible enough to allow deviations from the norms when justified on a case by case basis;

(11) A list of all staff who conduct utilization management; and

(12) Payment to the Commissioner of the nonrefundable application fee of $100.

G. The delegation by a medical director of any of the medical director's responsibilities under this chapter to an associate medical director or an assistant medical director does not prevent the medical director, regardless of the delegation, from being held responsible for any violation of this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

COMAR 31.10.20.04 Denial or Revocation of Certification.

A. The Commissioner shall deny a certificate to an applicant if the Commissioner finds that the initial application does not meet the requirements of this chapter.

B. The Commissioner may revoke the certification of a medical director:

(1) Who violates any provision of this chapter;

(2) Who fails to meet the requirements for certification under Regulation .04B of this chapter;

(3) Who obtains certification based on inaccurate information;

(4) Who fraudulently or deceptively obtains, attempts to obtain, or uses a certificate; or

(5) If the Commissioner finds a pattern that the utilization management procedures and policies used by the medical director in making utilization review decisions or used by a private review agent employed by or under contract with the health maintenance organization over whose utilization review decisions the medical director has responsibility are not:

(a) Objective;

(b) Clinically valid;

(d) Flexible enough to allow deviations from the norms when justified on a case by case basis.

C. Before denying an initial application for certification or revoking an issued certificate, the Commissioner shall provide the applicant or certificate holder with:

(1) Reasonable time to supply additional information which demonstrates compliance with the requirements of this chapter and the opportunity to request a hearing;

(2) Written notice of the reasons for the denial or revocation; and

(3) 30 days in which to request a hearing in accordance with State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.

Cross References

31.10.20.05B(3)(b)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

COMAR 31.10.20.05 Term of Certification and Recertification.

A. A certificate:

(1) Is not transferable; and

(2) Expires on the second anniversary of its effective date unless certification has been renewed for another 2-year term.

B. Before certification expires, a medical director may renew certification if the certified medical director:

(1) Otherwise is entitled to be certified;

(2) Pays to the Commissioner the nonrefundable renewal fee of $100; and

(3) Submits to the Commissioner:

(a) A renewal application on a form that the Commissioner requires; and

(b) An update of the information required under Regulation .04B of this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

COMAR 31.10.20.06 Notification to the Board of Physician Quality Assurance.

A. The Commissioner shall annually provide to the Board a list of certified individuals authorized by the Commissioner to act as a medical director.

B. The Commissioner shall notify the Board of the revocation of a certificate issued under this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.07 adopted as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); adopted permanently effective March 22, 1999 (26:6 Md. R. 490)
Administrative History: ——————
Administrative History: Chapter revised effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .03 amended effective August 27, 2018 (45:17 Md. R. 804)
Authority: Insurance Article, §§2-109 and 15-10C-02, Annotated Code of Maryland

31.10.21 Private Review Agents

COMAR 31.10.21.01 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accrediting organization” means an entity that accredits or certifies the utilization management activities of a private review agent.

(2) “Administration” means the Maryland Insurance Administration.

(3) Adverse Decision.

(a) “Adverse decision” means a utilization review determination made by a private review agent that a proposed or delivered health care service that is otherwise covered under the patient's contract:

(i) Is or was not medically necessary, appropriate, or efficient; and

(ii) May result in noncoverage of the health care service.

(b) “Adverse decision” does not include a decision concerning a subscriber's status as a member.

(4) “Approved accrediting organization” means an accrediting organization that has been approved by the Commissioner as having accreditation standards that meet or exceed standards in this chapter.

(5) “Carrier” has the meaning stated in Insurance Article, §15-10A-01, Annotated Code of Maryland.

(6) “Certificate” means a certificate of registration granted by the Commissioner to a private review agent.

(7) “Commissioner” means the State Insurance Commissioner.

(8) “Contact information” means an individual’s name, job title and department, address, telephone number, facsimile number, and email address.

(9) “Emergency case” means a case involving an adverse decision for which an expedited review is required under COMAR 31.10.18.05.

(10) Employee Assistance Program.

(a) “Employee assistance program” means a health care service plan that, in accordance with a contract with an employer or labor union:

(i) Consults with employees or members of an employee's family or both to identify the employee's or the employee's family member's mental health, alcohol, or substance abuse problems, and refers the employee or the employee's family member to health care providers or other community resources for counseling, therapy, or treatment; and

(ii) Performs utilization review for the purpose of making claims or payment decisions on behalf of the employer's or labor union's health insurance or health benefit plan.

(b) “Employee assistance program” does not include a health care service plan operated by a hospital solely for employees, or members of an employee's family, of that hospital.

(11) Grievance.

(a) “Grievance” means a protest filed by a patient or health care provider on behalf of a patient with a private review agent through the private review agent's internal grievance process regarding an adverse decision concerning a patient.

(b) “Grievance” does not include a verbal request for reconsideration of a utilization review determination.

(12) “Grievance decision” means a final determination by a private review agent that arises from a grievance filed with the private review agent under its internal grievance process regarding an adverse decision concerning a patient.

(13) “Health care facility” means:

(a) A hospital as defined in Health-General Article, §19-301, Annotated Code of Maryland;

(b) A related institution as defined in Health-General Article, §19-301, Annotated Code of Maryland;

(c) An ambulatory surgical facility or center which is any entity or part of an entity that operates primarily for the purpose of providing surgical services to patients not requiring hospitalization and seeks reimbursement from third-party payors as an ambulatory surgical facility or center;

(d) A facility that is organized primarily to help in the rehabilitation of disabled individuals;

(e) A home health agency as defined in Health-General Article, §19-401, Annotated Code of Maryland;

(f) A hospice as defined in Health-General Article, §19-901, Annotated Code of Maryland;

(g) A facility that provides radiological or other diagnostic imagery services;

(h) A medical laboratory as defined in Health-General Article, §17-201, Annotated Code of Maryland; or

(i) An alcohol abuse and drug abuse treatment program as defined in Health-General Article, §8-403, Annotated Code of Maryland.

(14) “Health care provider” means:

(a) An individual who is:

(i) Licensed or otherwise authorized to provide health care services in the ordinary course of business or practice of a profession, and

(ii) A treating provider of the patient; or

(b) A hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland.

(15) “Health care service” means a health or medical care procedure or service rendered by a health care provider licensed or authorized to provide health care services that:

(a) Provides testing, diagnosis, or treatment of a human disease or dysfunction;

(b) Dispenses drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction; or

(c) Provides any other care, service, or treatment of disease or injury, the correction of defects, or the maintenance of the physical and mental well-being of human beings.

(16) “Private review agent” means:

(a) A non-hospital-affiliated person or entity performing utilization review that is either affiliated with, under contract with, or acting on behalf of a Maryland business entity, or a third party that pays for, provides, or administers health care services to citizens of this State; or

(b) A person or entity including a hospital-affiliated person performing utilization review for the purpose of making claims or payment decisions for health care services on behalf of the employer's or labor union's health insurance plan under an employee assistance program for employees other than the employees:

(i) Employed by the hospital; or

(ii) Employed by a business wholly owned by the hospital.

(17) “Reconsideration” means a verbal request or verbal inquiry by a patient, the patient's representative, or a provider regarding an adverse decision.

(18) “Significant beneficial interest” means the ownership of any financial interest that is greater than the lesser of:

(a) 5 percent of the whole; or

(b) $5,000.

(19) “Specific criteria and standards” means professionally developed objective measures used during utilization review to make determinations to authorize or certify the appropriate use and efficient allocation of health care resources.

(20) “Uniform treatment plan form” means a form specified by the Commissioner to be used for utilization review of services for the treatment of a mental illness, emotional disorder, or a substance abuse disorder.

(21) “Utilization review” means a system for reviewing the appropriate and efficient allocation of health care resources and services given or proposed to be given to a patient or group of patients.

(22) “Utilization review plan” means a description of the standards governing utilization review activities performed by a private review agent.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.02 Certification.

A. A private review agent shall hold a certificate from the Commissioner to conduct utilization review in this State.

B. A private review agent shall submit to the Commissioner the contact information of one person who will be available to respond to inquiries from the Maryland Insurance Administration. If the contact information for the designated person changes, the private review agent shall:

(1) Notify the Commissioner in writing within 30 days; and

(2) Provide new contact information.

C. A private review agent seeking certification shall submit to the Commissioner an application for certification on a form specified by the Commissioner so that the Commissioner can determine whether the private review agent meets the requirements of this regulation. The private review agent shall attach the following additional information to the application:

(1) A utilization review plan which includes the following:

(a) Types of reviews performed and a written protocol describing each type of review, including:

(i) Preauthorization;

(ii) Preadmission;

(iii) Admission;

(iv) Emergency admission;

(v) Second surgical opinion;

(vi) Discharge planning;

(vii) Concurrent; or

(viii) Retrospective;

(b) Copies of specific criteria and standards to be used in conducting utilization reviews of proposed or delivered health care services, including:

(i) A list of the interpretive guidelines used by the private review agent that identifies the title, author, publisher, and edition of the guidelines; and

(ii) Copies of interpretive guidelines for which there are no applicable copyright laws;

(d) Specified time frames in which the private review agent makes determinations to authorize or certify services;

(e) A written protocol describing the following:

(i) The grievance procedure by which a patient, a patient's representative, or a patient's health care provider may file a grievance with a private review agent;

(ii) The grievance procedure for receipt of an emergency case, including the initial acceptance of a verbal grievance by a patient, a patient's representative, or a patient's health care provider; and

(iii) Any procedures for handling a verbal request for reconsideration of a utilization review determination;

(f) Forms to be completed by a private review agent, a patient, or a patient's representative, including a health care provider, during the grievance procedure;

(g) Specified time frames in which a private review agent shall make a final grievance decision in writing;

(h) Qualifications of the personnel making the final grievance determinations; and

(i) The circumstances, if any, under which utilization review may be delegated to a hospital utilization review program and, if applicable, a list of the carriers for whom the private review agent:

(i) Is performing utilization review; and

(ii) Has been delegated the internal grievance process pursuant to Insurance Article, Title 15, Subtitle 10A, Annotated Code of Maryland;

(2) Type and qualifications of the personnel either employed or under contract to perform utilization review which includes:

(a) Registered nurses;

(b) Medical records technicians or similar personnel supported and supervised by physicians as may be required;

(d) Other appropriate health care providers;

(3) Policies and procedures to ensure that a representative of a private review agent is reasonably accessible to patients and providers 7 days a week, 24 hours a day in this State;

(4) Policies and procedures to ensure that all applicable State and federal laws protecting the confidentiality of individual medical records are followed;

(5) A copy of materials designed to inform patients and providers of requirements of the utilization review plan;

(6) A list of third-party payors for which a private review agent is performing utilization review in this State;

(7) Policies and procedures to ensure that a private review agent has a formal program for the effective orientation and training of the personnel either employed or under contract to perform utilization review;

(8) An outline of the training program which includes content and schedule of presentation;

(9) Qualifications of health care providers involved in establishing the specific criteria and standards to be used in conducting utilization review if nationally recognized criteria are not used;

(10) Certification by a private review agent that the criteria and standards to be used in conducting utilization review are:

(a) Objective;

(b) Clinically valid;

(d) Flexible enough to allow deviations from norms when justified on a case-by-case basis; and

(11) A nonrefundable application fee of $1,500.

Cross References

31.10.21.06A

31.10.21.06B(3)

31.10.21.07B(3)(b)

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.02-1 Uniform Treatment Plan.

A. Scope. This regulation does not apply to a person that uses a treatment plan form solely for internal purposes, unless the private review agent requires the information to authorize treatment.

B. Form Required. If a private review agent requires a health care provider to submit a treatment plan or telephonically provide the information requested on the uniform treatment plan, to enable the private review agent to conduct utilization review of services for the treatment of a mental illness, emotional disorder, or a substance abuse disorder, the private review agent shall use the uniform treatment plan form set forth in §H of this regulation.

C. Acceptance of Form by Private Review Agent. A private review agent shall accept the uniform treatment plan form as a properly submitted treatment plan form and may not require a health care provider to:

(1) Modify the uniform treatment plan form or its content except as provided in this regulation; or

(2) Submit additional treatment plan forms.

D. Instructions. A private review agent may provide a set of instructions for use by the health care provider regarding the private review agent's specific managed care requirements.

E. Modification of Form Prohibited. A private review agent may not modify the uniform treatment plan form in any manner.

F. Use of Form by Health Care Provider. A health care provider shall use and properly complete the uniform treatment plan form as provided in this regulation.

G. Submission of Form by Electronic Transfer. The uniform treatment plan form may be submitted by electronic transfer.

H. The uniform treatment plan form required by this regulation shall read as follows:

FORM AT END OF CHAPTER

I. Telephonic Review. If a private review agent conducts utilization review of services for the treatment of a mental illness, emotional disorder, or a substance abuse disorder telephonically, the private review agent may not require the health care provider to provide any information that is not requested on the uniform treatment plan form.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.03 Specific Criteria and Standards.

A. Required Copies. Upon the written request of a person or health care facility, a private review agent shall provide one copy of the specific criteria and standards to be used in conducting utilization review of proposed or delivered services and any subsequent revisions or modifications to the specific criteria and standards.

B. Fee for Copy. A private review agent shall:

(1) Make available a copy of specific criteria and standards used in conducting utilization review of proposed or delivered services for inspection on the premises during normal business hours;

(2) Provide a copy of the specific criteria and standards to a person or health care facility upon request at a reasonable fee determined by the private review agent; and

(3) Provide a copy of the specific criteria and standards upon request to a State agency at no charge to the agency.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.04 Determinations.

A. Nonemergency Treatment. A private review agent shall make all initial determinations on whether to authorize or certify a nonemergency course of treatment for a patient within the time period specified in Insurance Article, §15-10B-06, Annotated Code of Maryland.

B. Extended Stays or Additional Health Care Services. A private review agent shall make all determinations on whether to authorize or certify an extended stay in a health care facility or additional health care services within the time period specified in Insurance Article, §15-10B-06, Annotated Code of Maryland.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.05 Patient Referrals by Private Review Agents.

A. Except as provided in §B of this regulation, this regulation does not apply to:

(1) A private review agent referring an individual to a health care provider or facility that participates in a health maintenance organization;

(2) A preferred provider organization network of participating health care providers or facilities to which the individual would otherwise be referred as part of the individual's membership or insurance contract; or

(3) An employee assistance program referring an individual to a network of participating health care providers or facilities in accordance with a contract with the individual's employer or labor union to provide comprehensive mental health and substance abuse services.

B. A private review agent or other individual who is affiliated with, under contract with, or acting on behalf of a private review agent, may not approve or fail to approve treatment based on whether the treatment is delivered by a provider who is a participating or nonparticipating provider in the preferred provider organization or an employee assistance program network.

C. Prohibited Referrals. A private review agent or individual who is affiliated with, under contract with, or acting on behalf of a private review agent may not:

(1) Refer a patient who has undergone utilization review by that private review agent to:

(a) A health care facility in which the private review agent owns a significant beneficial interest; or

(b) A health care practice owned by the private review agent;

(2) Pay, agree to pay, accept, or agree to accept a sum for bringing or referring a patient to a private review agent; or

(3) Provide for different insurance coverage or benefits based on the patient receiving service from a health care facility or provider in which a private review agent owns a significant beneficial interest.

D. Authorized Referrals.

(1) A private review agent, or individual who is affiliated with, under contract with, or acting on behalf of a private review agent, may refer a patient to another health care provider if:

(a) The patient or health care provider requests the private review agent to provide the patient with the name of a health care provider appropriate to meet the health care needs of the patient; or

(b) The patient has no attending physician.

(2) If §D(1) of this regulation is satisfied the private review agent shall provide the patient with names of at least two health care providers appropriate to meet the health care needs of the patient.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.06 Denial or Revocation of Certification.

A. The Commissioner shall deny a certificate to an applicant if the Administration finds that the initial application does not include all requirements of Regulation .02 of this chapter.

B. The Commissioner may revoke the certification of a private review agent:

(1) That violates any provision of this chapter;

(2) That fraudulently or deceptively obtains, attempts to obtain, or uses a certificate;

(3) That fails to meet the requirements for certification under Regulation .02B of this chapter;

(4) That obtains certification based on inaccurate information; or

(5) If the Commissioner finds a pattern that the utilization management procedures and policies used by a private review agent are not:

(a) Objective,

(b) Clinically valid,

(d) Flexible enough to allow deviations from the norms when justified on a case by case basis.

C. Before denying an initial application for certification or revoking an issued certificate, the Commissioner shall provide the applicant or certificate holder with:

(1) Reasonable time to supply additional information which demonstrates compliance with the requirements of this chapter and the opportunity to request a hearing;

(2) Written notice of the reasons for the denial or revocation; and

(3) 30 days in which to request a hearing in accordance with State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.07 Term of Certification and Recertification.

A. A certificate of registration:

(1) Is not transferable; and

(2) Expires on the second anniversary of its effective date unless certification has been renewed for another 2-year term.

B. Before certification expires, a private review agent may renew its certification if the certified private review agent:

(1) Otherwise is entitled to be certified;

(2) Pays to the Commissioner the nonrefundable renewal fee of $1,500; and

(3) Submits to the Commissioner:

(a) A renewal application on a form that the Commissioner requires, and

(b) An update of the information required under Regulation .02B of this chapter.

C. The Commissioner shall renew the certification of each certified private review agent if the requirements of this chapter are met.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.08 Penalties.

A. Criminal Penalty. A person who violates a provision of this chapter shall be guilty of a misdemeanor, and on conviction is subject to a penalty not exceeding $1,000. Each day a violation is continued after the first conviction is a separate offense.

B. Administrative Penalty. In addition to, or instead of, the criminal penalty described in §A of this regulation, the Commissioner may impose an administrative penalty not to exceed $5,000 for violation of any regulation of this chapter.

C. When considering whether conditions warrant the imposition of an administrative penalty, the Commissioner shall consider the following factors:

(1) The nature and seriousness of each condition of noncompliance;

(2) The number of conditions of noncompliance;

(3) The extent to which a condition of noncompliance is part of an ongoing pattern;

(4) The efforts made by, and the ability of the private review agent to correct, the condition of noncompliance in a timely manner; and

(5) Other factors as justice may require.

D. The Commissioner may impose an administrative penalty for any one of the factors in §C of this regulation.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.09 Hearings and Appeals.

A private review agent subject to an administrative penalty, or to denial or revocation of certification, has the right to a hearing and the right to appeal from an action of the Commissioner in accordance with Insurance Article, §§2-210—2-215, Annotated Code of Maryland.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.10 Exemptions.

The Commissioner may waive the requirements of this chapter for a private review agent that operates solely under contract with the federal government for utilization review of patients eligible for hospital services under Title XVIII of the Social Security Act.

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

COMAR 31.10.21.11 Accredited Private Review Agents and Filing Requirement Waivers.

A. Determination of Approved Accrediting Organization.

(1) An accrediting organization is not an approved accrediting organization until the Commissioner issues a letter of approval to the accrediting organization.

(2) For the purpose of determining which entities are approved accrediting organizations, the Commissioner shall consider whether:

(a) Some or all of the accreditation standards required to be met for accreditation by the accrediting organization meet or exceed the requirements of Insurance Article, Title 15, Subtitles 10A and 10B, Annotated Code of Maryland;

(b) The accrediting organization measures an applicant's ability to meet each standard; and

(c) The accrediting organization agrees to notify the Commissioner at least 30 days in advance if it revises its accreditation standards or changes the method in which it reviews private review agents.

(3) The approved accrediting organization continues to be approved by the Commissioner until notified in writing by the Commissioner that its approval has been withdrawn.

B. Demonstration by Applicant of Meeting Filing Requirement through Accreditation.

(1) An applicant for a private review agent certification may request an exemption from a particular filing requirement of this chapter if the applicant:

(a) Is accredited by an approved accrediting organization; and

(b) Submits the following information to the Commissioner for approval:

(i) A list of the filing items for which the private review agent applicant is requesting exemption;

(ii) The letter of accreditation from an approved accrediting organization;

(iii) The standards by which the private review agent applicant was measured by the approved accrediting organization; and

(iv) Evidence that the private review agent applicant met or exceeded each accreditation standard for which the private review agent applicant is requesting a filing exemption.

(2) In addition to the information specified in §B(1) of this regulation, the Commissioner may request additional information before granting the filing exemption provided by this regulation.

Attachments

31.10.21.02-1-form

History

Administrative History: Effective date: June 6, 1994 (21:11 Md. R. 951)
Administrative History: Chapter revised and recodified from COMAR 10.07.19 to COMAR 31.10.21 as an emergency provision effective January 1, 1999 (26:2 Md. R. 104); amended and recodified permanently effective March 22, 1999 (26:6 Md. R. 491)
Administrative History: Regulation .02-1 adopted effective August 21, 2000 (27:16 Md. R. 1526)
Administrative History: ——————
Administrative History: Chapter revised effective April 12, 2004 (31:7 Md. R. 587)
Administrative History: Regulation .01B amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02 amended effective August 27, 2018 (45:17 Md. R. 804)
Administrative History: Regulation .02-1 repealed and new Regulation .02-1 adopted effective January 30, 2006 (33:2 Md. R. 83)
Administrative History: Regulation .02-1 amended effective May 17, 2010 (37:10 Md. R. 724)
Administrative History: Regulation .02-1H amended as an emergency provision effective January 1, 2013 (40:6 Md. R. 470); amended permanently effective April 15, 2013 (40:7 Md. R. 613)
Administrative History: Regulation .02-1H amended effective May 11, 2015 (42:9 Md. R. 648); February 24, 2020 (47:4 Md. R. 264)
Administrative History: Regulation .03 amended effective August 15, 2016 (43:16 Md. R. 902)
Authority: Insurance Article, §§2-109(a)(1), 15-10B-03(h), and 15-802(d)(5), Annotated Code of Maryland

31.10.22 Provider-Sponsored Organizations

COMAR 31.10.22.01 Scope.

The scope of this chapter is the scope of Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland, as it relates to the Insurance Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Commissioner” means the Maryland Insurance Commissioner.

(2) “Contract” means the contractual agreement for the provision of health care services on a prepaid, capitated basis entered into between a provider-sponsored organization and the Health Care Finance Administration to provide health care benefits to medicare program beneficiaries.

(3) “Enrollee” means an individual who is enrolled in a provider-sponsored organization.

(4) Health Care Delivery Assets.

(a) “Health care delivery assets” means any tangible asset that is part of a provider-sponsored organization operation.

(b) “Health care delivery assets” includes:

(i) Hospitals, medical facilities, and their ancillary equipment; and

(ii) Property as may reasonably be required for a provider-sponsored organization's principal office or for such purposes as may be necessary in the transaction of the business of a provider-sponsored organization.

(5) “Health Care Finance Administration” means the Health Care Finance Administration of the federal Department of Health and Human Services.

(6) “Health care services” means a health or medical procedure or service rendered by a health care provider that:

(a) Provides testing, diagnosis, or treatment of a human disease or dysfunction; or

(b) Dispenses drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction.

(7) “Insolvent” means the condition of having been:

(a) Declared as not meeting the fiscal requirements for continued licensing; or

(b) Placed under an order of liquidation by a court of competent jurisdiction.

(8) “Leasehold estate improvements” means improvements made to property that is leased by a provider-sponsored organization and used by it to provide health care services directly.

(9) “Net worth” means the excess of total admitted assets over liabilities, but the liabilities may not include fully subordinated debt.

(10) “Provider” means a physician, hospital, or other person licensed or otherwise authorized to provide health care services.

(11) “Provider-sponsored organization” has the meaning stated in Health-General Article, §19-7A-01(f), Annotated Code of Maryland.

(12) “Subordinated debt” means a surplus account item derived from the subordination of provider-sponsored organization debts to owners, medical providers, or other creditors.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.03 Certificate of Authority Required.

Before a person may operate as a provider-sponsored organization under the federal Medicare+Choice Program, the person shall obtain a certificate of authority from the Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.04 Application for Certificate of Authority.

A. Submission of Application. An applicant shall submit an application for a certificate of authority to the Commissioner at least 90 days before the date that the applicant proposes to engage in business in the State.

B. Provision of Application Form. The Commissioner shall provide an application form to an applicant on request.

C. Filing of Information. Each applicant seeking a certificate of authority to transact business in the State shall file the following items with the Commissioner:

(1) If incorporated, a copy of the articles of incorporation of the applicant and any amendments to the articles of incorporation, certified by the Department of Assessments and Taxation;

(2) A copy of the applicant's current bylaws, certified by the appropriate officer of the applicant;

(3) A list of the names, addresses, and official capacity with the applicant of the individuals who are to be responsible for conducting the applicant's affairs, including all members of the governing body, the officers and directors in the case of a corporation, and the partners or associates in the case of a partnership or association;

(4) A resume of the qualifications of the administrator, the medical director, each officer, and each other individual associated with the applicant or as requested by the Commissioner;

(5) A statement generally describing the:

(a) Applicant and its structure,

(b) Applicant's operations,

(d) The type, specialty, and number of physicians and health care personnel engaged or contracted with to provide health care services;

(6) A statement describing with reasonable certainty the geographic area to be served by the applicant;

(7) A certified statement of the financial condition of the applicant, including:

(a) Sources of financial support,

(b) Assets and liabilities and minimum net worth, and

(8) Copies of proposed techniques and methods of marketing the services of the applicant;

(9) A power of attorney duly executed by the applicant appointing the Commissioner and the Commissioner's duly authorized deputies as the true and lawful attorney of the applicant in and for the State on whom may be served all lawful process in any action, proceeding, or cause of action arising in the State against the applicant;

(10) A certificate of compliance evidencing employee coverage under the Maryland Workers' Compensation Act (Labor and Employment Article, Title 9, Annotated Code of Maryland); and

(11) A prospective budget and expected cash flow analysis for the first 12 months of the applicant's anticipated operation, demonstrating its financial viability based on reasonable assumptions.

D. Disclosure. Each individual who is responsible for the conduct of the affairs of an applicant shall disclose to the Commissioner and the governing body of the applicant the extent and nature of any contracts or arrangements between the individual and the applicant, including any possible conflicts of interest.

E. Insurance—General Liability and Medical Malpractice.

(1) An applicant may not obtain a certificate of authority until the applicant:

(a) Submits to the Commissioner evidence of general liability and medical malpractice insurance or a plan of self-insurance to cover general liability and medical malpractice; and

(b) Obtains approval of its insurance or plan of self-insurance from the Commissioner with respect to the amount of coverage and type of coverage.

(2) With each annual report, a provider-sponsored organization shall submit to the Commissioner evidence of renewal of insurance or continuation of self-insurance.

F. Advertising. Before using any advertising that has been approved by the Health Care Financing Administration, a provider-sponsored organization shall file a copy of the advertising with the Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.05 Net Worth Requirements.

A. Initial Net Worth. An applicant may not obtain a certificate of authority unless the applicant has an initial net worth of at least:

(1) $1,500,000; or

(2) $1,000,000, based on evidence from the applicant's financial plan, as required by 42 CFR §422.384, demonstrating to the Commissioner's satisfaction that the applicant has available to it an administrative infrastructure that the Commissioner considers appropriate to reduce, control, or eliminate start-up administrative costs.

B. Minimum Net Worth.

(1) After issuance of a certificate of authority, a provider-sponsored organization shall maintain at least the minimum net worth required under this section.

(2) Except as provided in §C of this regulation, each provider-sponsored organization shall maintain a minimum net worth equal to the greater of:

(a) $1,000,000;

(b) 2 percent of annual premium revenues as reported on the most recent annual financial statement filed with the Commissioner on the first $150,000,000 of premium and 1 percent of annual premium revenues on the premium in excess of $150,000,000;

(c) An amount equal to the sum of 3 months uncovered health care expenditures as reported on the most recent financial statement filed with the Commissioner; or

(d) Using the most recent annual financial statement filed with the Commissioner, an amount equal to the sum of:

(i) 8 percent of annual health care expenditures paid on a non-capitated basis to non-affiliated providers,

(ii) 4 percent of annual health care expenditures paid on a capitated basis to non-affiliated providers plus annual health care expenditures paid on a non-capitated basis to affiliated providers, and

(iii) Annual health care expenditures that are paid on a capitated basis to affiliated providers that are not included in the calculation of the net worth requirement under §§A and B(2)(d)(i) and (ii) of this regulation.

C. Determining Net Worth. In determining net worth:

(1) A debt may not be considered fully subordinated unless the subordination clause is in a form acceptable to the Commissioner;

(2) Any interest obligation relating to the repayment of a subordinated debt shall be similarly subordinated;

(3) The interest expense relating to the repayment of any fully subordinated debt shall be considered covered expenses; and

(4) Any debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the Commissioner, is not considered a liability and shall be recorded as equity.

D. Composition of Assets. To meet the minimum net worth requirements, a provider-sponsored organization shall have the following composition of assets:

(1) At the time of application, at least $750,000 of the minimum net worth shall be in cash or cash equivalents;

(2) After the effective date of the Medicare+Choice contract, the greater of $750,000 or 40 percent of the minimum net worth amount shall be in cash or cash equivalents;

(3) During the licensing process, up to 10 percent of the minimum net worth amount may be comprised of intangible assets except that, if a provider-sponsored organization keeps $1,000,000 in cash or cash equivalents and does not use the administrative reduction, then up to 20 percent of that provider-sponsored organization's minimum net worth may be comprised of intangible assets;

(4) After the licensing process, a provider-sponsored organization shall keep the greater of $1,000,000 or 67 percent of the ongoing minimum net worth in cash or cash equivalents to qualify for the 20 percent level on intangibles;

(5) Subject to §D(1)—(4) of this regulation, health care delivery assets may be admitted at 100 percent of their value according to generally accepted accounting principles (GAAP); and

(6) Subject to §D(1)—(5) of this regulation, other assets may be admitted according to their value under statutory accounting practices (SAP).

Cross References

31.10.22.06A

31.10.22.06A(4)

31.10.22.06B(2)

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.06 Determination of Financial Condition.

A. Additional Assets. In any determination of the financial condition of an applicant or provider-sponsored organization, in addition to the assets under Regulation .05 of this chapter, the following assets are allowed:

(1) Cash in the possession of the applicant or provider-sponsored organization or in transit under its control, and the balance of any deposit of the applicant or provider-sponsored organization in a solvent bank or trust company;

(2) Investments and securities owned and held by the applicant or provider-sponsored organization, free and clear of any liens, encumbrances, pledges, or judgements, and the income due or accrued on the investments and securities;

(3) Member premium charges in the course of collection, not more than 90 days past due (the foregoing limitation does not apply to amounts payable directly by the federal government under the Medicare+Choice contract);

(4) Health care delivery assets in accordance with Regulation .05C of this chapter;

(5) Prepaid charges on contracts with other organizations or hospitals, or other persons as approved by the Commissioner;

(6) Pharmaceutical and medical supply inventories;

(7) Cost of land and depreciated cost of buildings owned and occupied by the applicant or provider-sponsored organization and used to directly provide health care, in excess of any encumbrances on it;

(8) Leasehold estate improvements, if the initial cost is amortized over the useful life of the improvements but not beyond the termination of the lease;

(9) Electronic, mechanical, and computer hardware including the operating system software used for data processing and accounting purposes, the cost of which shall be amortized in full over a period not to exceed 5 calendar years; and

(10) Other assets, not inconsistent with the foregoing provisions, deemed by the Commissioner available for the provision of health care, at values to be determined by the Commissioner.

B. Non-Admitted Assets. The following may not be allowed as assets in determining the financial condition of an applicant or provider-sponsored organization:

(1) Deferred acquisition costs;

(2) Subject to the provisions of Regulation .05 of this chapter, good will, trade names, and other similar intangible assets;

(3) Advances to officers, whether secured or not, and advances to employees, agents, and other persons on personal security only;

(4) Stock of the applicant or provider-sponsored organization, owned by it, or any equity in it or loans secured by it, or any proportionate interest in the stock through the ownership by the applicant or provider-sponsored organization or an interest in another firm, corporation, or business unit;

(5) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the applicant or provider-sponsored organization exceeds the aggregate value of the investments as determined by the values approved annually by the Securities Valuation Office of the National Association of Insurance Commissioners; and

(6) Furniture and fixtures, leasehold improvements other than leasehold estate improvements which qualify under §A(8) of this regulation, vehicles, and maintenance equipment.

C. Liabilities Chargeable Against Assets. In any determination of the financial condition of an applicant or provider-sponsored organization, liabilities to be charged against its assets shall include:

(1) The amount of its capital stock outstanding, if any;

(2) The estimated amount necessary to pay for all accrued benefits to enrollees and all claims, both reported or unreported, incurred on or before the date of the statement, together with estimated costs of adjusting or settling disputed claims;

(3) The pro rata amount of premium charges paid by or on behalf of enrollees for any period of coverage beyond the date of the statement; and

(4) Its other liabilities, including but not limited to taxes, expenses, and other obligations due or accrued at the date of the statement.

D. Earned Charges.

(1) Charge Defined.

(a) In this section, “charge” means consideration for health services regardless of the name given to the consideration.

(b) In this section, “charge” includes an assessment, membership fee, policy fee, survey fee, inspection fee, service fee, or similar fee or charge in consideration for the provider-sponsored organization contract.

(2) Earned charges shall include Medicare+Choice contract charges and premium charges, including all determined excess and additional charges, less:

(a) Return charges;

(b) Charges on canceled contracts; and

(3) Every provider-sponsored organization shall maintain an unearned charge reserve on all health care contracts in force. This reserve shall be set up as a liability.

(4) All prepaid charges shall be considered unearned.

E. Standards for Investments.

(1) An applicant or provider-sponsored organization may not make or engage in an investment unless the investment has been authorized or ratified by:

(a) The board of directors; or

(b) A committee of the board of directors charged with the duty of supervising investments.

(2) All investments of the applicant or provider-sponsored organization may be held in a custodial account pursuant to COMAR 31.09.04.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.07 Deposit of Securities.

A. Deposit Required. The Commissioner may not issue or renew a certificate of authority for a provider-sponsored organization unless it has deposited and maintains in trust with the State Treasurer, for the protection of its members or its members and creditors, cash or government securities of the type described in Health-General Article, §19-710, Annotated Code of Maryland, in the market value amount of $100,000.

B. Assets.

(1) For purposes of determining net worth, the deposit is an admitted asset of the provider-sponsored organization.

(2) All income from deposits is an asset of the provider-sponsored organization.

C. Withdrawal of Deposit. A provider-sponsored organization that has made a securities deposit may withdraw that deposit, or any part of the deposit, after making a substitute deposit of cash, securities, or any combination of these, or other measures of equal amount and value.

D. Approval of Commissioner. Securities shall be approved by the Commissioner before being deposited or substituted.

E. Use of Deposit. The deposit shall be used to:

(1) Protect the interests of the provider-sponsored organization's enrollees; and

(2) Assure continuation of health care services to enrollees of a provider-sponsored organization that is in rehabilitation, conservation, or liquidation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.08 Term and Renewal of Certificate of Authority.

A. Expiration. Unless previously suspended or revoked, each original and renewal certificate of authority issued to a provider-sponsored organization expires at midnight on the November 30 after its effective date in accordance with Health-General Article, §19-721(a), Annotated Code of Maryland.

B. Renewal. On payment of an annual renewal fee of $25 by the provider-sponsored organization before the expiration date of its certificate of authority, its certificate of authority remains in effect until a new certificate of authority is issued or specifically refused in accordance with Health-General Article, §19-721, Annotated Code of Maryland.

C. Refusal to Renew. The Commissioner may refuse to renew a certificate of authority in accordance with Health-General Article, §19-722, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.09 Disciplinary Action.

If a provider-sponsored organization violates any provision of Health-General Article, §19-729, Annotated Code of Maryland, the Commissioner may take any action against the provider-sponsored organization that is authorized pursuant to Health-General Article, §19-730, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.10 Change of Name.

A provider-sponsored organization may not:

A. Use a name that has not been approved by the Commissioner; or

B. Change its name without the prior approval of the Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.11 Termination of Services

A. Notice of Intent to Terminate. When a provider-sponsored organization desires to cease offering a service under the contract, the provider-sponsored organization shall provide written notice of the intent to terminate to the Commissioner at least 30 days before ceasing to offer the service.

B. Permissible Reasons for Cancellation or Nonrenewal of Enrollment. A provider-sponsored organization may cancel or nonrenew enrollment in the provider-sponsored organization only for the following reasons:

(1) Change of the place of residence of the member from the geographical area served by the provider-sponsored organization;

(2) Failure of the member to pay any deductible or co-payment charges permitted under a contract;

(3) Fraudulent use of the provider-sponsored organization's identification card on the part of the member or the alteration or sale of prescriptions by the member;

(4) Failure of the enrollee to pay a premium charge when due;

(5) Termination of the contract.

(6) Termination of the plan with respect to all individuals in the area in which the enrollee resides; or

(7) The enrollee has:

(a) Engaged in disruptive behavior as specified in standards under 42 U.S.C. §1395w-21,

(b) Lost entitlement to Part A or Part B of Title 42, Chapter 7, Subchapter XVIII of the U.S. Code, or

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.12 Annual Report.

A. Required. Each licensed provider-sponsored organization shall file with the Commissioner a report, certified by at least two principal officers, showing its financial condition on the last day of the preceding calendar year.

B. Form. The report shall be on the form adopted by the Commissioner.

C. Filing Deadline. Unless the time is extended for good cause, a provider-sponsored organization shall file its annual report with the Commissioner on or before the first day of March of each year.

D. Supplemental Information. The report shall be supplemented with a description of any changes in the information submitted with the last previous annual report or with the provider-sponsored organization's original application for a certificate of authority.

E. Audited Financial Statement. A provider-sponsored organization shall file a certified audited financial statement on or before June 1 of each year.

F. Additional Reports. The Commissioner may require additional reports as are deemed necessary and appropriate to enable the Commissioner to carry out the duties of the Commissioner under the law.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.13 Fiscal Examination.

A. Frequency of Examination. The Commissioner may examine the operation of a provider-sponsored organization as often as the Commissioner deems necessary for the protection of the interest of the people of Maryland, but the examinations may not be less frequent than once every 5 years.

B. Cost of Examination.

(1) The Commissioner shall assess the provider-sponsored organization being examined for the cost of the examination.

(2) The provider-sponsored organization shall remit the cost of the examination to the Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.14 General Operations of a Provider-Sponsored Organization.

A. Effective Date of Contract. A provider-sponsored organization shall inform the Commissioner of the effective date of its contract.

B. Review of Agreements by Commissioner. All signed written agreements, including those defining physicians' services, shall be on file and available for review by the Commissioner at all times in the provider-sponsored organization's central office.

C. Duration of Agreements. All agreements shall have a duration of 12 months.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

COMAR 31.10.22.15 Insurance — Catastrophic or Back-Up Coverage.

A. Insurance Coverage Required. Unless the Commissioner grants an exemption from the requirements of this section, a provider-sponsored organization shall secure insurance coverage to provide:

(1) Payments or services required to be made or furnished under the health care contract to those enrollees who are injured or become ill outside the geographic limits served by the provider-sponsored organization; and

(2) Reinsurance protection to the provider-sponsored organization in the event of catastrophic or unusual losses that would be in excess of the levels of loss that the provider-sponsored organization assumes in the basis of its calculation of premium charges.

B. Term and Renewal of Exemptions.

(1) Any exemption to the requirements of §A shall be for a period of 1 year, and may be renewed from year to year after that.

(2) The provider-sponsored organization shall make any request for renewal of an exemption at least 90 days before the expiration date of the then-current exemption.

C. Reinsurance. With the approval of the Commissioner, a provider-sponsored organization may reinsure any portion or aspect of its operation.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.15 adopted as an emergency provision effective June 29, 1999 (26:15 Md. R. 1146); emergency status extended at 27:3 Md. R. 326; emergency status expired April 17, 2000; adopted permanently effective May 15, 2000 (27:9 Md. R. 860)
Authority: Health-General Article, Title 19, Subtitle 7A, Annotated Code of Maryland

31.10.23 Penalties for Failure to Make Prompt Payment of Claims

COMAR 31.10.23.01 Violations Subject to Penalties.

A. Violations. In addition to the requirement that an insurer, nonprofit health service plan, or health maintenance organization pay interest as required under Insurance Article, §15-1005(f), Annotated Code of Maryland, an insurer, nonprofit health service plan, or health maintenance organization is subject to the penalties set forth in §B of this regulation if the insurer, nonprofit health service plan, or health maintenance organization:

(1) Fails to:

(a) Pay a claim within 30 days after receipt of a claim for reimbursement from a:

(i) Person entitled to reimbursement under Insurance Article, §15-701(a), Annotated Code of Maryland, or

(ii) Hospital or related institution as defined in Health-General Article, §19-301, Annotated Code of Maryland; or

(b) Send a notice of receipt and status of the claim in accordance with Insurance Article, §15-1005(c)(2), Annotated Code of Maryland;

(2) Requests additional information that is not reasonably necessary to determine if all or part of the claim will be reimbursed, in accordance with Insurance Article, §15-1005(c)(2)(ii), Annotated Code of Maryland;

(3) Fails to pay a claim within 30 days after receipt of all reasonable and necessary documentation in accordance with Insurance Article, §15-1005(e)(1), Annotated Code of Maryland; or

(4) Fails to pay interest in accordance with Insurance Article, §15-1005(e)(2) or (f), Annotated Code of Maryland.

B. Penalties. The penalties for insurers, nonprofit health service plans, and health maintenance organizations for the commission of an act listed in §A of this regulation are as follows:

(1) Up to $500 for a single commission of an act listed in §A of this regulation that is arbitrary or capricious based on all available information; and

(2) As provided in Insurance Article, §4-113(d), Annotated Code of Maryland, for commission of an act listed in §A of this regulation with the frequency to indicate a general business practice as defined by regulation by the Commissioner.

History

Administrative History: Effective date:
Administrative History: Regulation .01 adopted as an emergency provision effective April 12, 1999 (26:10 Md. R. 796); emergency status expired October 1, 1999
Administrative History: Regulation .01 adopted as an emergency provision effective October 1, 1999 (26:23 Md. R. 1776); emergency status expired November 15, 1999; adopted permanently effective December 13, 1999 (26:25 Md. R. 1900)
Authority: Health-General Article, §§19-729, and 19-730; Insurance Article, §§4-113 and 15-1005; Annotated Code of Maryland

COMAR 31.10.24.01 Scope.

This chapter applies to discount medical plans and discount drug plans sold, marketed, or solicited in Maryland in accordance with the requirements of Insurance Article, Title 14, Subtitle 6, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective October 1, 2008 (35:22 Md. R. 1955); adopted permanently effective January 26, 2009 (36:2 Md. R. 103)
Authority: Insurance Article, §2-109 and Title 14, Subtitle 6; Annotated Code of Maryland

COMAR 31.10.24.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Discount drug plan” has the meaning stated in Insurance Article, §14-601(b), Annotated Code of Maryland.

(2) “Discount drug plan organization” has the meaning stated in Insurance Article, §14-601(c), Annotated Code of Maryland.

(3) “Discount medical plan” has the meaning stated in Insurance Article, §14-601(d), Annotated Code of Maryland.

(4) “Discount medical plan organization” has the meaning stated in Insurance Article, §14-601(e), Annotated Code of Maryland.

(5) “Medical services” has the meaning stated in Insurance Article, §14-601(g), Annotated Code of Maryland.

(6) “Nominal fee” means the fee that may be retained by a discount drug plan organization or a discount medical plan organization if a plan member's membership in a discount drug plan or discount medical plan is canceled within the first 30 calendar days after the effective date of enrollment.

(7) “Plan member” has the meaning stated in Insurance Article, §14-601(i), Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective October 1, 2008 (35:22 Md. R. 1955); adopted permanently effective January 26, 2009 (36:2 Md. R. 103)
Authority: Insurance Article, §2-109 and Title 14, Subtitle 6; Annotated Code of Maryland

COMAR 31.10.24.03 Cancellations.

A. A discount drug plan organization or discount medical plan organization shall reimburse all monies collected from a plan member if the plan member cancels membership in the discount drug plan or the discount medical plan within the first 30 calendar days after the effective date of enrollment.

B. If electronic fund transfer is employed as a method of payment for discount drug plan or discount medical plan membership and membership is canceled within the first 30 calendar days after the effective date of enrollment, the discount drug plan organization or discount medical plan organization has 30 days from the date of cancellation in which to reverse the electronic fund transfer less the applicable nominal fee for this period.

Cross References

31.10.24.04A

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective October 1, 2008 (35:22 Md. R. 1955); adopted permanently effective January 26, 2009 (36:2 Md. R. 103)
Authority: Insurance Article, §2-109 and Title 14, Subtitle 6; Annotated Code of Maryland

COMAR 31.10.24.04 Nominal Fee.

A. Notwithstanding the provisions of Regulation .03 of this chapter, a discount drug plan organization or a discount medical plan organization may retain a nominal fee if a plan member cancels membership in the discount drug plan or discount medical plan within the first 30 calendar days after the effective date of enrollment, if:

(1) The discount drug plan organization or the discount medical plan organization has filed the applicable nominal fee with the Insurance Commissioner prior to use; and

(2) The nominal fee does not exceed the lesser of $5, or the actual expenses incurred for issuing a plan member's discount drug plan card or discount medical plan card.

B. A discount drug plan or discount medical plan shall disclose the amount of the nominal fee and the circumstances when the discount drug plan organization or discount medical plan organization may retain the nominal fee in writing in 12 point type and in all marketing materials relating to an application or contract soliciting prospective members, including all:

(1) Printed materials;

(2) Brochures; and

(3) Websites.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective October 1, 2008 (35:22 Md. R. 1955); adopted permanently effective January 26, 2009 (36:2 Md. R. 103)
Authority: Insurance Article, §2-109 and Title 14, Subtitle 6; Annotated Code of Maryland

COMAR 31.10.25.01 Scope.

This chapter applies to each individual nonprofit health service plan contract issued or delivered in Maryland.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.10.25.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means a nonprofit health service plan.

(2) “Covered individual” means an individual covered under an individual contract.

(2-1) “Coverage period” means the interval of time the individual contract provides protection to the insured, in exchange for the payment of a particular premium.

(2-2) “Health benefit plan” has the meaning stated in Insurance Article, §15-1301, Annotated Code of Maryland.

(3) “Individual contract” means a contract issued by a nonprofit health service plan to a subscriber covering:

(a) The subscriber;

(b) The subscriber's dependents; or

(4) “Preferred provider” means a provider that has entered into a provider service contract.

(5) “Preferred provider benefit” means a benefit that appears in an individual contract under which health care services are to be provided to the covered individual by a preferred provider.

(6) “Provider service contract” means a contract between a provider and a carrier or other entity, under which the provider agrees to provide health care services on a preferential basis under contracts containing preferred provider benefits.

(7) “Subscriber” means the individual to whom the nonprofit health service plan contract is issued.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.10.25.03 Required Standard Provisions.

A. An individual contract may not be delivered in Maryland unless it contains in substance the provisions listed in Regulation .04 of this chapter, or provisions which in the opinion of the Commissioner are not less favorable in any respect to the subscriber and covered individuals.

B. Inapplicable and Inconsistent Provisions. If a provision required by Regulation .04 of this chapter is wholly or partly inapplicable to or inconsistent with the coverage provided by a particular contract, the carrier shall:

(1) Omit from the contract the inapplicable provision or part of the provision; or

(2) Modify the inconsistent provision or part of the provision to make it consistent with the coverage provided by the contract.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.10.25.04 Standard Provisions.

A. Entire Contract; Changes. Each individual contract shall contain in substance the following provision: “Entire contract; changes: This certificate, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this certificate shall be valid until approved by an executive officer of the carrier and unless such approval is endorsed on the certificate or attached to the certificate. No agent has authority to change this certificate or to waive any of its provisions.”

B. Time Limit on Certain Defenses.

(1) Except as provided in §B(2) of this regulation, each individual contract shall contain in substance the following provision: “Time limit on certain defenses:(1) After two years from the date of issue of this contract no misstatements, except fraudulent misstatements, made by the applicant in the application for the contract shall be used to void the contract or to deny a claim for loss incurred after two years from the date of issue of the contract. (2) No claim for loss incurred after two years from the date of issue of this contract shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this contract.”

(2) The first provision set forth in §B(1) of this regulation does not:

(a) Affect a legal requirement for avoidance of a policy or denial of a claim during the initial 2-year period after the issuance of the contract; or

(b) Limit the application of the provision found in Regulation .06E of this chapter if there is a misstatement with respect to age.

(3) Contract Incontestable After 2 Years.

(a) This subsection applies only to a contract that the subscriber may continue in effect subject to its terms by the timely payment of premiums:

(i) Until the subscriber is at least 50 years old; or

(ii) If the contract is issued after the subscriber is 44 years old, for at least 5 years after its date of issue.

(b) A contract subject to this subsection may omit the first provision set forth in §B(1) of this regulation and substitute in substance the following provision under the caption “Incontestable”: “After this contract has been in force for a period of two years during the lifetime of the subscriber, it shall become incontestable as to the statements contained in the application.”

C. Grace Period.

(1) If the individual contract is guaranteed renewable for the life of the contract, the contract shall contain in substance the following provision: “Grace period: A grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.”

(2) If the contract gives the carrier the right to refuse renewal, the contract shall contain in substance the following provision: “Grace period: Unless at least 30 days prior to the premium due date the carrier has delivered to the subscriber, or has mailed to the subscriber's last address as shown by the records of the carrier, written notice of its intention not to renew this contract beyond the period for which the premium has been accepted, a grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this policy shall continue in force.”

(2-1) The grace period provisions described in §C(1) and (2) of this regulation shall not apply to an individual contract that is a health benefit plan under which the subscriber is receiving advance payment of federal premium tax credits.

(2-2) If the individual contract is a health benefit plan under which the subscriber is receiving advance payment of federal premium tax credits, the individual contract shall contain the grace period provision required by Insurance Article, §15-1315, Annotated Code of Maryland.

(3) If an individual contract lapses due to nonpayment of premium, a carrier may not charge a premium for the time coverage continues in force under the grace period, except as permitted in the unpaid premiums provision in Regulation .06F of this chapter.

(4) A carrier may not apply the unpaid premiums provision to recover a premium due for the grace period as described in §C(3) of this regulation, unless the carrier includes the unpaid premiums provision in the individual's contract.

(5) An individual contract may not require the subscriber to notify the carrier in advance of the subscriber's intention to terminate the individual contract.

D. Reinstatement.

(1) Each individual contract shall contain in substance the following provision: “Reinstatement: If any renewal premium is not paid in full within the time granted the subscriber for payment, a later acceptance of premium in full by the carrier or by any agent authorized by the carrier to accept the premium, without requiring a reinstatement application in connection with the acceptance of the premium in full, shall reinstate the contract. However, if the carrier or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the contract will be reinstated upon approval of the application by the carrier or, lacking approval, upon the forty-fifth day following the date of the conditional receipt unless the carrier has previously notified the subscriber in writing of its disapproval of the reinstatement application. The subscriber and carrier shall have the same rights under the reinstated contract as they had under the contract immediately before the due date of the defaulted premium, subject to any provisions endorsed on the contract or attached to the contract in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement.”

(2) The last sentence of the provision set forth in §D(1) of this regulation may be omitted from a contract that the subscriber may continue in effect subject to its terms by the timely payment of premiums:

(a) Until the subscriber is at least 50 years old; or

(b) If the contract is issued after the subscriber is 44 years old, for at least 5 years after its date of issue.

(3) The reinstatement provision of an individual contract that is not a health benefit plan may also include the following sentence: “The reinstated contract shall cover only loss resulting from accidental injury sustained after the date of reinstatement and loss due to sickness that first manifests itself more than ten days after the date of reinstatement.”

E. Notice of Claim.

(1) Each individual contract shall contain a provision describing how and when a claim form can be requested from a carrier.

(2) If the carrier requires written notice of claim for the carrier to send a claim form to the claimant, the provision shall indicate that:

(a) The written notice of claim may not be required before 20 days after the occurrence or commencement of the loss covered by the policy;

(b) The carrier may not invalidate or reduce a claim if it is shown that:

(i) It was not reasonably possible to give notice within 20 days, and

(ii) Notice was given as soon as was reasonably possible.

F. Claims Forms. Each individual contract shall contain in substance the following provision: “Claim forms: The carrier, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If claim forms are not furnished within 15 days after the giving of notice the claimant shall be deemed to have complied with the requirements of this contract as to proof of loss upon submitting, within the time fixed in the contract for filing proof of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made.”

G. Proofs of Loss. Each individual contract shall contain in substance the following provision: “Proofs of loss: Written proof of loss must be furnished to the carrier within 90 days after the date of the loss. Failure to furnish proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within the required time, provided proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.”

H. Time of Payment of Claims. Each individual contract shall contain in substance the following provision: “Time of payment of claims: Benefits under this contract will be paid within 30 days after receipt of written proof of loss.”

I. Payment of Claims.

(1) Each individual contract shall contain a provision that:

(a) All benefits, other than those described in §I(1)(b) of this regulation, will be payable to the subscriber; and

(b) Any accrued benefits unpaid at the subscriber's death shall be paid to the subscriber's estate.

(2) If an individual contract contains a preferred provider benefit, the contract may indicate that the preferred provider benefits will be paid directly to the preferred provider.

(3) At the option of the carrier, the substance of the following paragraph may be added to the provision described in §I(1) of this regulation: “If any benefit of this contract shall be payable to the estate of the subscriber, or to a subscriber who is under 18 years of age or otherwise not competent to give a valid release, the carrier may pay the benefit, up to an amount not exceeding $5,000, to any relative by blood or connection by marriage of the subscriber who is deemed by the carrier to be equitably entitled to the benefit. Any payment made by the carrier in good faith pursuant to this provision shall fully discharge the carrier to the extent of the payment.”

J. Legal Actions. Each individual contract shall contain in substance the following provision: “Legal actions: No action at law or in equity shall be brought to recover on this contract prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this contract. No such action shall be brought after the expiration of three years after the written proof of loss is required to be furnished.”

K. 10-Day Right to Examine Contract.

(1) Subject to §K(2) of this regulation, a notice shall be prominently printed on or attached to the face of the contract that states that:

(a) The contract may be surrendered to the carrier for cancellation within 10 days after the date the contract is delivered to the subscriber; and

(b) If the contract is canceled during the 10-day period, a pro rata premium for the unexpired term of the contract shall be returned to the subscriber.

(2) The subscriber shall notify the carrier of the cancellation in writing.

(3) The carrier may print or attach the notice required under §K(1) of this regulation or a notice of equal prominence that, in the opinion of the Commissioner, is not less favorable to the subscriber.

L. Age Limit; Misstatement of Age.

(1) The individual contract shall state that the contract will continue in effect until the end of the period for which the carrier has accepted the premium if an individual contract establishes, as an age limit or otherwise, a date after which the coverage provided by the contract will not be effective and:

(a) The date falls within a period for which the carrier accepts a premium for the contract; or

(b) The carrier accepts a premium for the contract after the date specified in this section.

(2) The individual contract shall state that the liability of the carrier is limited to the refund, on request, of the premiums paid for the period not covered by the contract if the age of the covered individual is misstated and according to the correct age of the covered individual, the coverage provided by the contract would:

(a) Not have become effective; or

(b) Have ceased before the acceptance of the premium for the contract.

M. Premium Due Date.

(1) Each individual contract shall specify the premium due date.

(2) The premium due date shall be no earlier than the date the coverage period begins.

(3) A carrier may offer each subscriber the option to pay the premium through an electronic payment.

(4) If the subscriber elects an electronic payment, the carrier may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the subscriber.

Cross References

14.35.01.02B(23)(c)

14.35.07.11G(5)(a)(ii)

14.35.14.09A(1)

14.35.15.06F(2)(b)

31.10.25.03A

31.10.25.03B

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.10.25.05 Limitations and Exclusions.

A. Crime.

(1) An individual contract may not include a limitation or exclusion for loss to which a contributing cause was the covered individual's commission of or attempt to commit a crime.

(2) An individual contract may not include a limitation or exclusion for loss for which a contributing cause was the commission of or the attempt to commit a crime by an individual other than the covered individual.

B. Illegal Occupation. An individual contract may not include a limitation or exclusion for loss to which a contributing cause was the covered individual's being engaged in an illegal occupation.

C. Intoxicants or Narcotics or Use of Intoxicants or Narcotics.

(1) An individual contract may not include a limitation or exclusion for loss sustained or contracted in consequence of the covered individual's being intoxicated or under the influence of any drug.

(2) An individual contract may not include a limitation or exclusion for loss due to:

(a) The use of alcohol;

(b) The use of drugs or narcotics; or

D. Preexisting Condition. If an individual contract contains a preexisting condition limitation or exclusion, the limitation or exclusion may not apply to a condition which the applicant revealed in the application for the contract, unless the condition is excluded by means of a signed waiver rider attached to the contract.

Cross References

31.04.17.17B

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.10.25.06 Optional Provisions.

A. A carrier may include any of the optional provisions described in §§C—G of this regulation.

B. A carrier may not include an optional provision dealing with the same subjects set forth in §§C—G of this regulation if the provision is drafted in a manner that is less favorable to the subscriber or any covered individual than the corresponding optional provision set forth in §§C—G of this regulation.

C. Physical Examination.

(1) A carrier may include a provision in an individual contract giving the carrier the right to examine the covered individual when and as often as it may reasonably require during the pendency of a claim under the contract.

(2) If the carrier includes the provision described in §C(1) of this regulation, the provision shall indicate that any physical examination required by the carrier will be performed at the expense of the carrier.

D. Autopsy.

(1) A carrier may include a provision in an individual contract giving the carrier the right to make an autopsy in case of death when an autopsy is not forbidden by law.

(2) If the carrier includes the provision described in §D(1) of this regulation, the provision shall indicate that any autopsy required by the carrier will be performed at the expense of the carrier.

E. Misstatement of Age. An individual contract may contain the following provision: “Misstatement of age: If the age of the covered individual has been misstated, all amounts payable under this contract shall be such as the premium would have purchased at the correct age.”

F. Unpaid Premiums. An individual contract may contain in substance the following provision: “Unpaid premiums: Upon the payment of a claim under this contract, any premium then due and unpaid or covered by any note or written order may be deducted from the claim payment.”

G. Arbitration.

(1) A carrier may include a provision in an individual contract giving the covered individual the option of entering binding arbitration to settle a dispute with the carrier.

(2) If the carrier includes the provision described in §G(1) of this regulation, the provision may not require the covered individual to enter binding arbitration.

Cross References

31.10.25.04B(2)(b)

31.10.25.04C(3)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438); May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04C amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .04C, D amended effective May 9, 2016 (43:9 Md. R. 532)
Administrative History: Regulation .04M adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04M amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .05A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 732); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

31.10.26 Uniform Credentialing Form

COMAR 31.10.26.01 Scope.

This chapter applies to all:

A. Carriers as defined in Regulation .02B(1) of this chapter; and

B. Credentialing intermediaries as defined in Regulation .02B(2) of this chapter.

History

Administrative History: Effective date: December 25, 2000 (27:25 Md. R. 2285)
Administrative History: Chapter revised effective December 6, 2007 (34:24 Md. R. 2159)
Administrative History: Regulation .03B amended effective January 20, 2014 (41:1 Md. R. 13)
Administrative History: Regulation .03F adopted effective January 20, 2014 (41:1 Md. R. 13)
Authority: Insurance Article, §§2-109 and 15-112.1, Annotated Code of Maryland

COMAR 31.10.26.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Carrier.

(a) “Carrier” means:

(i) An insurer;

(ii) A nonprofit health service plan;

(iii) A health maintenance organization;

(iv) A dental plan organization; or

(v) Any other person that provides health benefit plans subject to regulation by the State.

(b) “Carrier” includes an entity that arranges a provider panel for a carrier.

(2) “Credentialing intermediary” means a person to whom a carrier has delegated credentialing or recredentialing authority and responsibility.

(3) “Health benefit plan” means:

(a) A hospital or medical policy, contract, or certificate, including those issued under multiple employer trusts or associations;

(b) A hospital or medical policy, contract, or certificate issued by a nonprofit health service plan;

(d) A dental plan organization contract.

(4) “Health care provider” means an individual who is licensed, certified, or otherwise authorized under the Health Occupations Article, Annotated Code of Maryland, to provide health care services.

(5) “Provider panel” means the health care providers that contract with a carrier to provide health care services to the enrollees under a health benefit plan of the carrier.

(6) “Uniform credentialing form” means the form designated by the Insurance Commissioner for use by a carrier or its credentialing intermediary for credentialing and recredentialing a health care provider for participation on a provider panel.

Cross References

31.10.26.01A

31.10.26.01B

History

Administrative History: Effective date: December 25, 2000 (27:25 Md. R. 2285)
Administrative History: Chapter revised effective December 6, 2007 (34:24 Md. R. 2159)
Administrative History: Regulation .03B amended effective January 20, 2014 (41:1 Md. R. 13)
Administrative History: Regulation .03F adopted effective January 20, 2014 (41:1 Md. R. 13)
Authority: Insurance Article, §§2-109 and 15-112.1, Annotated Code of Maryland

COMAR 31.10.26.03 Uniform Credentialing Form — Carrier and Credentialing Intermediary Requirements.

A. A carrier or its credentialing intermediary shall:

(1) Accept the uniform credentialing form as the sole application for a health care provider to become credentialed or recredentialed for a provider panel of the carrier; and

(2) Make the uniform credentialing form available to any health care provider that is to be credentialed or recredentialed by the carrier or credentialing intermediary.

B. A carrier may not, for purposes of credentialing or recredentialing, require a health care provider to:

(1) Modify the uniform credentialing form;

(2) Submit additional credentialing forms;

(3) Use any other credentialing form not designated by the Commissioner; or

(4) Submit any additional information not specified by the uniform credentialing form, except as stated in §F of this regulation.

C. A carrier may preprint the designated carrier information on the uniform credentialing form.

D. A carrier may not deny a uniform credentialing form because the form does not include the designated carrier information of the carrier.

E. A carrier may require a health care provider to submit a new Authorization to Release Information and Affirmation page, with an original signature and date, for the purpose of credentialing or recredentialing.

F. A carrier that is a managed care organization may require a provider to make the disclosure required by 42 CFR §1002.3.

History

Administrative History: Effective date: December 25, 2000 (27:25 Md. R. 2285)
Administrative History: Chapter revised effective December 6, 2007 (34:24 Md. R. 2159)
Administrative History: Regulation .03B amended effective January 20, 2014 (41:1 Md. R. 13)
Administrative History: Regulation .03F adopted effective January 20, 2014 (41:1 Md. R. 13)
Authority: Insurance Article, §§2-109 and 15-112.1, Annotated Code of Maryland

COMAR 31.10.26.04 Electronic Filing.

A. The uniform credentialing form may be obtained in an electronic format.

B. The uniform credentialing form may be transmitted by facsimile.

C. A transmission by facsimile is not considered an electronic transfer for the purposes of this chapter.

D. Capability of Electronic Filing.

(1) The uniform credentialing form developed under this chapter shall be capable of electronic filing.

(2) The uniform credentialing form may be filed electronically in any format that contains the data required to be contained in the uniform credentialing form.

History

Administrative History: Effective date: December 25, 2000 (27:25 Md. R. 2285)
Administrative History: Chapter revised effective December 6, 2007 (34:24 Md. R. 2159)
Administrative History: Regulation .03B amended effective January 20, 2014 (41:1 Md. R. 13)
Administrative History: Regulation .03F adopted effective January 20, 2014 (41:1 Md. R. 13)
Authority: Insurance Article, §§2-109 and 15-112.1, Annotated Code of Maryland

COMAR 31.10.26.05 Effective Date.

The regulations in this chapter are applicable for all credentialing and recredentialing forms used on or after January 1, 2008.

History

Administrative History: Effective date: December 25, 2000 (27:25 Md. R. 2285)
Administrative History: Chapter revised effective December 6, 2007 (34:24 Md. R. 2159)
Administrative History: Regulation .03B amended effective January 20, 2014 (41:1 Md. R. 13)
Administrative History: Regulation .03F adopted effective January 20, 2014 (41:1 Md. R. 13)
Authority: Insurance Article, §§2-109 and 15-112.1, Annotated Code of Maryland

COMAR 31.10.28.01 Scope.

This chapter is applicable to each individual health insurance contract issued or delivered in Maryland on or after the effective date of this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2002 (28:26 Md. R. 2270); adopted permanently effective June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .03A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Administrative History: Regulation .05 adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .05B amended effective April 22, 2019 (46:8 Md. R. 402)
Authority: Insurance Article, §§2-109, 12-203(g), and 12-205(b)(4), Annotated Code of Maryland

COMAR 31.10.28.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Coverage period” means the interval of time the individual health insurance contract provides protection to the insured, in exchange for the payment of a particular premium.

(2) “Individual health insurance contract” means a health insurance contract issued by an insurer to a policyholder that provides health insurance coverage for permissible individuals as described in Insurance Article, §15-201(c), Annotated Code of Maryland.

(3) “Insured” means a person covered under an individual health insurance contract.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2002 (28:26 Md. R. 2270); adopted permanently effective June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .03A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Administrative History: Regulation .05 adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .05B amended effective April 22, 2019 (46:8 Md. R. 402)
Authority: Insurance Article, §§2-109, 12-203(g), and 12-205(b)(4), Annotated Code of Maryland

COMAR 31.10.28.03 Limitations and Exclusions.

A. Crime.

(1) Except as provided in §A(3) of this regulation, an individual health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's commission of or attempt to commit a crime.

(2) An individual health insurance contract may not include a limitation or exclusion for loss for which a contributing cause was the commission of or the attempt to commit a crime by an individual other than the insured.

(3) A disability benefit or an accidental death and dismemberment benefit in an individual health insurance contract:

(a) May be subject to exclusion or limitation for loss to which a contributing cause was the insured's commission of or attempt to commit a felony; and

(b) May not be subject to an exclusion or limitation regarding the commission of or attempt to commit a crime that is more restrictive to the insured than the exclusion or limitation set forth in §A(3)(a) of this regulation.

B. Illegal Occupation.

(1) Except as provided in §B(2) of this regulation, an individual health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's being engaged in an illegal occupation.

(2) A disability benefit or an accidental death and dismemberment benefit in an individual health insurance contract:

(a) May be subject to an exclusion or limitation for loss to which a contributing cause was the insured's being engaged in an illegal occupation; and

(b) May not be subject to an exclusion or limitation regarding an illegal occupation that is more restrictive to the insured than the exclusion or limitation set forth in §B(2)(a) of this regulation.

C. Intoxicants and Narcotics.

(1) Except as provided in §C(2) of this regulation, an individual health insurance contract may not include a limitation or exclusion for loss:

(a) Sustained or contracted in consequence of the insured's being intoxicated or under the influence of any drug;

(b) Due to the use of alcohol;

(d) Due to alcoholism or drug addiction.

(2) A disability benefit or an accidental death and dismemberment benefit in an individual health insurance contract:

(a) May be subject to an exclusion or limitation for loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician; and

(b) May not be subject to an exclusion or limitation regarding the use of alcohol or drugs that is more restrictive to the insured than the exclusion or limitation set forth in §C(2)(a) of this regulation.

D. Preexisting Condition Limitation. If an individual health insurance contract contains a preexisting condition limitation or exclusion, the limitation or exclusion may not apply to a condition that the applicant revealed in the application for the contract, unless the condition is excluded by means of a signed waiver rider attached to the contract.

Cross References

31.04.17.17B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2002 (28:26 Md. R. 2270); adopted permanently effective June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .03A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Administrative History: Regulation .05 adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .05B amended effective April 22, 2019 (46:8 Md. R. 402)
Authority: Insurance Article, §§2-109, 12-203(g), and 12-205(b)(4), Annotated Code of Maryland

COMAR 31.10.28.04 Arbitration.

If an insurer includes an arbitration provision in an individual health insurance contract, the arbitration provision may not require the insured to use arbitration to settle disputes with the insurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2002 (28:26 Md. R. 2270); adopted permanently effective June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .03A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Administrative History: Regulation .05 adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .05B amended effective April 22, 2019 (46:8 Md. R. 402)
Authority: Insurance Article, §§2-109, 12-203(g), and 12-205(b)(4), Annotated Code of Maryland

COMAR 31.10.28.05 Premium Due Date.

A. Each individual health insurance contract shall specify the premium due date.

B. The premium due date shall be no earlier than the date the coverage period begins.

C. An insurer may offer each individual policyholder the option to pay the premium through an electronic payment.

D. If the individual policyholder elects an electronic payment, the insurer may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the individual policyholder.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2002 (28:26 Md. R. 2270); adopted permanently effective June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .03A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Administrative History: Regulation .05 adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .05B amended effective April 22, 2019 (46:8 Md. R. 402)
Authority: Insurance Article, §§2-109, 12-203(g), and 12-205(b)(4), Annotated Code of Maryland

31.10.29 Complaint Process for Coverage Decisions

COMAR 31.10.29.01 Scope.

This chapter applies to carriers and representatives of carriers making coverage decisions.

History

Administrative History: Effective date: June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective April 16, 2012 (39:7 Md. R. 497)
Administrative History: Regulation .03B, C amended effective April 16, 2012 (39:7 Md. R. 497)
Authority: Insurance Article, §§15-10D-02(d) and 15-10D-04, Annotated Code of Maryland

COMAR 31.10.29.02 Definitions.

A. In this chapter, the following terms have the meaning indicated.

B. Terms Defined.

(1) “Appeal” means a protest filed by a member, a member’s representative, or a health care provider with a carrier under its internal appeal process regarding a coverage decision concerning a member.

(2) “Appeal decision” means a final determination by a carrier that arises from an appeal filed with the carrier under its appeal process regarding a coverage decision concerning a member.

(3) “Carrier” means a person that offers a health benefit plan and is:

(a) An authorized insurer that provides health insurance in the State;

(b) A nonprofit health service plan;

(d) A dental plan organization; or

(e) Except for a managed care organization, as defined in Health-General Article, Title 15, Subtitle 1, Annotated Code of Maryland, any other person that offers a health benefit plan subject to regulation by the State.

(4) “Complaint” means a protest filed with the Commissioner involving a coverage decision other than that which is covered by Insurance Article, Title 15, Subtitle 10A, Annotated Code of Maryland.

(5) “Coverage decision” has the meaning stated in Insurance Article, §15-10D-01, Annotated Code of Maryland.

(6) Health Benefit Plan.

(a) “Health benefit plan” means:

(i) A hospital or medical policy or contract, including a policy or contract issued under a multiple employer trust or association;

(ii) A hospital or medical policy or contract issued by a nonprofit health service plan;

(iii) A health maintenance organization contract; or

(iv) A dental plan organization contract.

(b) “Health benefit plan” does not include one or more, or any combination, of the following:

(i) Long-term care insurance;

(ii) Disability insurance;

(iii) Accidental travel and accident death and dismemberment insurance;

(iv) Credit health insurance;

(v) A health benefit plan issued by a managed care organization, as defined in Health-General Article, Title 15, Subtitle 1, Annotated Code of Maryland;

(vi) Disease-specific insurance; or

(vii) Fixed indemnity insurance.

(7) “Health care provider” means:

(a) An individual who is licensed under the Health Occupations Article, Annotated Code of Maryland, to provide health care services in the ordinary course of business or practice of a profession and is a treating provider of the member; or

(b) A hospital, as defined in Health-General Article, §19-301, Annotated Code of Maryland.

(8) “Health care service” means a health or medical care procedure or service rendered by a health care provider that:

(a) Provides testing, diagnosis, or treatment of a human disease or dysfunction; or

(b) Dispenses drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction.

(9) “Internal appeal process” means the appeal process required by Insurance Article, Title 15, Subtitle 10D, Annotated Code of Maryland, to be adopted by the carrier for use by its members and health care providers to dispute coverage decisions made by the carrier or a representative of the carrier.

(10) Member.

(a) “Member” means a person entitled to health care services under a policy, plan, or contract issued or delivered in the State by a carrier.

(b) “Member” includes:

(i) A subscriber; and

(ii) Unless preempted by federal law, a Medicare recipient.

(11) “Member’s representative” has the meaning stated in Insurance Article, §15-10D-01, Annotated Code of Maryland.

(12) “Urgent medical condition” means a condition that satisfies either of the following:

(a) A medical condition, including a physical condition, a mental condition, or a dental condition, where the absence of medical attention within 72 hours could reasonably be expected by an individual, acting on behalf of a carrier, applying the judgment of a prudent layperson who possesses an average knowledge of health and medicine, to result in:

(i) Placing the member's life or health in serious jeopardy;

(ii) The inability of the member to regain maximum function;

(iii) Serious impairment to bodily function;

(iv) Serious dysfunction of any bodily organ or part; or

(v) The member remaining seriously mentally ill with symptoms that cause the member to be a danger to self or others; or

(b) A medical condition, including a physical condition, a mental health condition, or a dental condition, where the absence of medical attention within 72 hours in the opinion of a health care provider with knowledge of the member's medical condition, would subject the member to severe pain that cannot be adequately managed without the care or treatment that is the subject of the coverage decision.

(13) “Retrospective denial” means a coverage decision which is made by the carrier after the health care service has been rendered to the member.

History

Administrative History: Effective date: June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective April 16, 2012 (39:7 Md. R. 497)
Administrative History: Regulation .03B, C amended effective April 16, 2012 (39:7 Md. R. 497)
Authority: Insurance Article, §§15-10D-02(d) and 15-10D-04, Annotated Code of Maryland

COMAR 31.10.29.03 Exhaustion of Internal Appeal Process.

A. Except as provided in §B of this regulation, the carrier's internal appeal process shall be exhausted before filing a complaint with the Commissioner under this chapter.

B. In a case involving a prospective denial, a member, a member’s representative, or a health care provider filing a complaint on behalf of a member may file a complaint with the Commissioner without first filing an appeal with a carrier and receiving a final decision on the appeal if the member, the member’s representative, or the health care provider gives sufficient information and supporting documentation in the complaint that demonstrates an urgent medical condition exists as defined under this chapter.

C. In a case involving a retrospective denial, an urgent medical condition is not deemed to exist to allow a member, a member’s representative, or a health care provider on behalf of a member to file to a complaint without first exhausting the internal appeal process of a carrier.

History

Administrative History: Effective date: June 10, 2002 (29:11 Md. R. 891)
Administrative History: Regulation .02B amended effective April 16, 2012 (39:7 Md. R. 497)
Administrative History: Regulation .03B, C amended effective April 16, 2012 (39:7 Md. R. 497)
Authority: Insurance Article, §§15-10D-02(d) and 15-10D-04, Annotated Code of Maryland

31.10.30 Disability Benefit Claims Procedures

COMAR 31.10.30.01 Scope.

This chapter applies to insurers that issue or deliver individual or group health insurance policies in Maryland that include a disability benefit.

History

Administrative History: Effective date: August 2, 2004 (31:15 Md. R. 1186)
Administrative History: Regulation .03B amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .04 amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .05 amended effective April 15, 2024 (51:7 Md. R. 334)
Authority: Insurance Article, §§2-109(a)(1) and 15-1010, Annotated Code of Maryland

COMAR 31.10.30.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Adverse appeal determination” means a decision made by an insurer on an appeal of an adverse benefit determination to uphold:

(a) A denial, reduction, or termination of a disability benefit;

(b) A failure to provide or make payment, in whole or in part, for a disability benefit; or

(c) Any denial, reduction, termination, or failure to provide or make payment that is based on a determination of a covered individual's eligibility for coverage of a disability benefit.

(2) “Adverse benefit determination” means a determination arising from a claim for disability benefits which results in:

(a) A denial, reduction, or termination of a disability benefit;

(b) A failure to provide or make payment, in whole or in part, for a disability benefit; or

(c) Any denial, reduction, termination, or failure to provide or make payment that is based on a determination of a covered individual's eligibility for coverage of a disability benefit.

(3) “Authorized representative” means a person, including a health care provider, authorized by the covered individual to act on behalf of the covered individual.

(4) “Covered individual” means an individual covered under an insurance policy that provides a disability benefit.

(5) Disability benefit.

(a) “Disability benefit” means a benefit that is payable based on the disability of a covered individual.

(b) “Disability benefit” does not include:

(i) Benefits under a long-term care insurance policy;

(ii) A benefit that is payable based solely on a dismemberment of a covered individual;

(iii) Benefits in a life insurance policy that operate to safeguard the contract from lapse or to provide a special surrender value, special benefit, or annuity in the event of total and permanent disability; or

(iv) Benefits in a health insurance policy that operate to safeguard the contract from lapse due to disability.

History

Administrative History: Effective date: August 2, 2004 (31:15 Md. R. 1186)
Administrative History: Regulation .03B amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .04 amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .05 amended effective April 15, 2024 (51:7 Md. R. 334)
Authority: Insurance Article, §§2-109(a)(1) and 15-1010, Annotated Code of Maryland

COMAR 31.10.30.03 Establishment of Claim and Appeal Procedures.

A. Each insurer subject to this chapter shall establish procedures for processing disability benefits claims and appeals of adverse benefit determinations in accordance with this chapter.

B. The procedures established by an insurer shall:

(1) Be in writing;

(2) Contain administrative processes and safeguards designed to ensure and to verify that benefit claim determinations are made in accordance with the insurance policy provisions and that, where appropriate, the insurance policy provisions have been applied consistently with respect to similarly situated covered individuals;

(3) Allow covered individuals at least 180 days following receipt of a notice of an adverse benefit determination to request an appeal of the adverse benefit determination;

(4) Provide covered individuals an opportunity to submit written comments, documents, records, and other information relating to the claim for disability benefits;

(5) Provide a covered individual who is appealing or has appealed an adverse benefit determination, upon request and free of charge, reasonable access to, and copies of all documents, records, and other information relevant to the covered individual's claim for disability benefits;

(6) Provide for a review that takes into account all comments, documents, records, and other information submitted by the covered individual appealing an adverse benefit determination, without regard to whether the information was submitted or considered in the initial adverse benefit determination;

(7) Require that the review on appeal of an adverse benefit determination be conducted by an individual who is neither the individual who made the adverse benefit determination nor a subordinate of the individual who made the adverse benefit determination;

(8) Provide that the review on appeal of an adverse benefit determination may not afford deference to the initial adverse benefit determination;

(9) Provide for the identification of medical or vocational experts whose advice was obtained on behalf of the insurer in connection with a covered individual's adverse benefit determination, without regard to whether the advice was relied upon in making the adverse benefit determination;

(10) Require the individual deciding an appeal of an adverse benefit determination, based in whole or in part on a medical judgment, to consult with a health care professional who:

(a) Has appropriate training and experience in the field of medicine involved in the medical judgment; and

(b) Is not:

(i) The health care professional consulted in connection with the initial adverse benefit determination; or

(ii) The subordinate of the health care professional;

(11) Ensure that all claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision, and, accordingly, decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual, such as a claims adjudicator or medical or vocational expert, may not be made based upon the likelihood that the individual will support the denial of benefits;

(12) Provide that, before the insurer issues an adverse appeal determination, the insurer shall provide the claimant, free of charge, with any new or additional evidence considered, relied upon, or generated by the insurer or other person making the benefit determination in connection with the claim, which shall be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse appeal determination is required to be provided to give the covered individual a reasonable opportunity to respond prior to that date; and

(13) Provide that, before the insurer can issue an adverse appeal determination based on a new or additional rationale, the insurer shall provide the claimant, free of charge, with the rationale, which shall be provided as soon as possible and sufficiently in advance.

C. The claims procedures established by the insurer:

(1) May not:

(a) Preclude an authorized representative of a covered individual from acting on behalf of the covered individual in filing a benefit claim or an appeal of an adverse benefit determination;

(b) Require the payment of a fee or costs as a condition to filing a claim or appealing an adverse benefit determination;

(c) Require a covered individual to complete more than two appeals of an adverse benefit determination before filing a complaint with the Commissioner; or

(d) Require a covered individual to submit a dispute regarding a claim for disability benefits to binding arbitration; but

(2) May include reasonable procedures for determining whether a person has been authorized to act on behalf of a covered individual.

D. For purposes of §B(5) of this regulation and Regulation .05F(3) of this chapter, a document, record, or other information shall be considered relevant to a covered individual's claim if the document, record, or other information:

(1) Was relied on in making the adverse benefit determination;

(2) Was submitted, considered, or generated in the course of making the adverse benefit determination, without regard to whether the document, record, or other information was relied upon in making the adverse benefit determination;

(3) Demonstrates compliance with the procedures required by §B(2) of this regulation; or

(4) Constitutes a statement of policy or guidance of the insurer concerning the denied disability benefit without regard to whether the statement was relied upon in making the adverse benefit determination.

History

Administrative History: Effective date: August 2, 2004 (31:15 Md. R. 1186)
Administrative History: Regulation .03B amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .04 amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .05 amended effective April 15, 2024 (51:7 Md. R. 334)
Authority: Insurance Article, §§2-109(a)(1) and 15-1010, Annotated Code of Maryland

COMAR 31.10.30.04 Timing and Content of Notice of Adverse Benefit Determination.

A. An insurer shall give written or electronic notice that complies with the standards imposed by 29 CFR §2520.104b-1(c)(1)(i), (iii), and (iv), of an adverse benefit determination to a covered individual within a reasonable period of time, but not later than 45 days after receipt of a claim for disability benefits, unless the 45-day period is extended in accordance with this regulation.

B. Subject to §F(2) of this regulation, the period of time within which a benefit determination shall be made begins at the time a claim is received, without regard to whether all the information necessary to make a benefit claim determination accompanies the filing.

C. The 45-day time period under §A of this regulation may be extended for up to 30 days if the insurer:

(1) Determines that the extension is necessary due to matters beyond the control of the insurer; and

(2) Provides the notice required under §E of this regulation to the covered individual before the expiration of the initial 45-day period.

D. The first 30-day extension may be extended for an additional 30 days if the insurer:

(1) Determines that, due to matters beyond the control of the insurer, a decision cannot be rendered within the first 30-day extension period; and

(2) Provides the notice required under §E of this regulation to the covered individual before the expiration of the first 30-day extension period.

E. The notice of an extension under §§C and D of this regulation shall be in writing and include:

(1) A description of the circumstances requiring the extension of time;

(2) The date by which the insurer plans to render a decision;

(3) A specific explanation of:

(a) The standards on which entitlement to a disability benefit is based;

(b) The unresolved issues that prevent a decision on the claim; and

(4) A statement that the covered individual shall be given at least 45 days within which to provide the specified information.

F. If the period of time within which a benefit determination is required to be made is extended under §C or D of this regulation due to a covered individual's failure to submit information necessary to decide a claim:

(1) The covered individual shall be given at least 45 days within which to provide the information; and

(2) The period for making the benefit determination is tolled (temporarily suspended) from the date on which the notice of the extension is sent to the covered individual until the date on which the covered individual responds to the request for additional information.

G. The notice of an adverse benefit determination shall include:

(1) The specific reason or reasons for the adverse benefit determination;

(2) A reference to the specific policy provisions on which the adverse benefit determination is based;

(3) A description of any additional material or information necessary for the covered individual to perfect the claim and an explanation of why the material or information is necessary;

(4) A description of the insurer's appeal procedures and the time limits applicable to the procedures;

(5) If an internal rule, guideline, protocol, or similar criterion was relied on in making the adverse benefit determination, either:

(a) The specific rule, guideline, protocol, or other similar criterion; or

(b) A statement that:

(i) An internal rule, guideline, protocol, or other similar criterion was relied on in making the adverse benefit determination; and

(ii) A copy of the rule, guideline, protocol, or other similar criterion will be provided on request free of charge to the covered individual; and

(6) A discussion of the decision, including an explanation of the basis for disagreeing with or not following:

(a) The views presented by the claimant to the plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant;

(b) The views of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; and

(c) A disability determination regarding the claimant presented by the claimant to the plan made by the Social Security Administration.

H. The notification shall be provided in a culturally and linguistically appropriate manner.

I. An insurer is considered to provide relevant notices in a culturally and linguistically appropriate manner if:

(1) The insurer provides oral language services, such as a telephone customer assistance hotline, that include answering questions in any applicable non-English language and providing assistance with filing claims and appeals in any applicable non-English language;

(2) The insurer provides, upon request, a notice in any applicable non-English language; and

(3) The insurer includes in the English version of all notices a statement prominently displayed in any applicable non-English language, clearly indicating how to access the language services provided by the insurer.

J. With respect to an address in any United States county to which a notice is sent, a non-English language is an applicable non-English language if 10 percent or more of the population residing in the county is literate only in the same non-English language, as determined in guidance published by the U.S. Secretary of Labor

History

Administrative History: Effective date: August 2, 2004 (31:15 Md. R. 1186)
Administrative History: Regulation .03B amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .04 amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .05 amended effective April 15, 2024 (51:7 Md. R. 334)
Authority: Insurance Article, §§2-109(a)(1) and 15-1010, Annotated Code of Maryland

COMAR 31.10.30.05 Timing and Notice of an Appeal Determination.

A. An insurer shall give written or electronic notice that complies with the standards imposed by 29 CFR §2520.104b-1(c)(1)(i), (iii), and (iv), of an appeal determination to a covered individual within a reasonable period of time, but not later than 45 days after receipt of an appeal of an adverse benefit determination, unless the 45-day period is extended in accordance with this regulation.

B. Subject to §E of this regulation, the period of time within which an appeal determination shall be made begins at the time an appeal is received, without regard to whether all the information necessary to make an appeal determination accompanies the filing.

C. The initial 45-day time period under §A of this regulation may be extended for a period not to exceed 45 days if the insurer:

(1) Determines that the extension is necessary due to special circumstances; and

(2) Provides the notice required under §D of this regulation to the covered individual prior to the expiration of the initial 45-day period.

D. The notice of an extension under §C of this regulation shall be in writing and include:

(1) A description of the special circumstances requiring the extension of time; and

(2) The date by which the insurer plans to render a decision.

E. If the period of time within which an appeal determination is required to be made is extended under §C of this regulation due to a covered individual's failure to submit information necessary to decide the appeal, the period for making the appeal determination shall be tolled (temporarily suspended) from the date on which the notice of the extension is sent to the covered individual until the date on which the covered individual responds to the request for additional information.

F. The notice of an adverse appeal determination shall include:

(1) The specific reason or reasons for the adverse appeal determination;

(2) A reference to the specific policy provisions on which the adverse appeal determination is based;

(3) A statement that the covered individual is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the covered individual's claim for benefits; and

(4) If an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse appeal determination, either:

(a) The specific rule, guideline, protocol, or other similar criterion; or

(b) A statement that:

(i) An internal rule, guideline, protocol, or other similar criterion was relied on in making the adverse appeal determination; and

(ii) A copy of the rule, guideline, protocol, or other similar criterion will be provided on request free of charge to the covered individual; and

(5) The address, telephone number, and facsimile number of the Commissioner.

G. An insurer shall provide access to, and copies of, documents, records, and other information described in §F(3) and (4) of this regulation.

Cross References

31.10.30.03D

History

Administrative History: Effective date: August 2, 2004 (31:15 Md. R. 1186)
Administrative History: Regulation .03B amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .04 amended effective April 15, 2024 (51:7 Md. R. 334)
Administrative History: Regulation .05 amended effective April 15, 2024 (51:7 Md. R. 334)
Authority: Insurance Article, §§2-109(a)(1) and 15-1010, Annotated Code of Maryland

31.10.31 Behavioral Health Care Expense Form

COMAR 31.10.31.01 Scope.

A. This chapter applies to each carrier that provides behavioral health care services through:

(1) A company owned wholly or partly by the carrier; or

(2) A contract with a managed behavioral health care organization.

B. This chapter does not apply to a person that, for an administrator fee only, solely arranges a provider panel for a carrier for the provision of behavioral health care services on a discounted fee-for-service basis.

History

Administrative History: Effective date: February 16, 2004 (31:3 Md. R. 209)
Authority: Insurance Article, §15-127(f), Annotated Code of Maryland

COMAR 31.10.31.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Behavioral Health Care Administrative Expenses.

(a) “Behavioral health care administrative expenses” means any expenses that are for administrative functions including:

(i) Billing and collection expenses;

(ii) Accounting and financial reporting expenses;

(iii) Quality assurance and utilization management program or activity expenses;

(iv) Promotion and marketing expenses;

(v) Taxes, fees, and assessments;

(vi) Legal expenses;

(vii) Salary expenses for employees that are not related to the delivery of behavioral health care services to patients;

(viii) Computer expenses;

(ix) Provider credentialing;

(x) Collection and administrative review of treatment plans;

(xi) Auditing the financial report submitted to the Commissioner under Insurance Article, §15-127, Annotated Code of Maryland;

(xii) Debt payment and debt service; and

(xiii) Other general and administrative expenses.

(b) “Behavioral health care administrative expenses” does not include expenses incurred for behavioral health care services.

(2) Behavioral Health Care Services.

(a) “Behavioral health care services” means procedures or services rendered by a health care provider for the treatment of mental illness, emotional disorders, drug abuse, or alcohol abuse.

(b) “Behavioral health care services” includes any quality assurance or utilization management activities or treatment plan reviews that are clinical in nature.

(3) “Carrier” means:

(a) A health insurer;

(b) A nonprofit health service plan;

(d) A preferred provider organization;

(e) A third party administrator; or

(4) “Direct behavioral health care expenses” means any payment to a health care provider by a managed behavioral health care organization for the provision of behavioral health care services to a member.

(5) “Direct payments” means the money that a carrier disburses to a managed behavioral health care organization for the provision of behavioral health care services to a member.

(6) “Managed behavioral health care organization” means a company, organization, private review agent, or subsidiary that:

(a) Contracts with a carrier to provide, undertake to arrange, or administer behavioral health care services to members; or

(b) Otherwise makes behavioral health care services available to members through contracts with health care providers.

(7) Member.

(a) “Member” means an individual entitled to behavioral health care services from a carrier or a managed behavioral health care organization under a policy or plan issued or delivered in the State.

(b) “Member” includes a subscriber.

(8) “Provider” means a person licensed, certified, or otherwise authorized under Health Occupations Article, or Health-General Article, Annotated Code of Maryland, to provide health care services.

History

Administrative History: Effective date: February 16, 2004 (31:3 Md. R. 209)
Authority: Insurance Article, §15-127(f), Annotated Code of Maryland

COMAR 31.10.31.03 Behavioral Health Care Expense Form.

Within 90 days after the end of each calendar year, each carrier shall complete the form developed by the Commissioner by obtaining, as necessary, and entering on the form the following information:

A. The name of each managed behavioral health care organization with which the carrier has a contract;

B. The calendar year for which the data is reported;

C. Total direct payments made by the carrier to each managed behavioral health care organization during the calendar year;

D. Direct behavioral health care expenses during the calendar year;

E. Amounts included in direct behavioral health care expenses for quality assurance or utilization management activities or treatment plan reviews;

F. Behavioral health care administrative expenses during the calendar year; and

G. The name, title, telephone number, and signature of the individual completing the form and the date that the form was completed.

Cross References

31.10.31.04A

History

Administrative History: Effective date: February 16, 2004 (31:3 Md. R. 209)
Authority: Insurance Article, §15-127(f), Annotated Code of Maryland

COMAR 31.10.31.04 Maintenance of Form.

A. A carrier shall maintain each form that the carrier is required to complete under Regulation .03 of this chapter for at least 5 years after the date that the form is required to be completed.

B. A carrier may maintain a form in paper, photographic, microprocessed, magnetic, mechanical, electronic, digital, or any other media provided that the form is maintained in a manner that:

(1) Is clear and legible;

(2) Reproduces accurately the original form in its entirety, including any attachments to the form;

(3) Is capable of producing a clear and legible hard copy of the original form; and

(4) Preserves evidence of the signature contained on the original form.

C. A carrier shall make copies of each form that the carrier is required to complete and maintain publicly available to an individual, enrollee, or member, on request, and may charge:

(1) A reasonable preparation fee not to exceed $15 for each form requested; and

(2) The actual cost for any postage and handling required to provide copies of the requested forms.

History

Administrative History: Effective date: February 16, 2004 (31:3 Md. R. 209)
Authority: Insurance Article, §15-127(f), Annotated Code of Maryland

31.10.32 Nonprofit Health Service Plans — Material Modification

COMAR 31.10.32.01 Scope.

This chapter applies to each nonprofit health service plan that is subject to Insurance Article, §14-115(d), Annotated Code of Maryland.

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

COMAR 31.10.32.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Baltimore metro region” means Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County, and Howard County.

(2) “Cost-sharing arrangement” includes:

(a) A deductible;

(b) A co-insurance amount;

(d) An annual limit;

(e) A lifetime limit; and

(f) An out-of-pocket maximum.

(3) “DC metro region” means Montgomery County and Prince George's County.

(4) “Eastern Shore region” means Caroline County, Cecil County, Dorchester County, Kent County, Queen Anne's County, Somerset County, Talbot County, Wicomico County, and Worcester County.

(5) Health Benefit Plan.

(a) “Health benefit plan” means a hospital or medical policy, contract, or certificate issued by a nonprofit health service plan.

(b) “Health benefit plan” includes:

(i) A Medicare supplement policy, contract, or certificate;

(ii) A long-term care policy, contract, or certificate; or

(iii) A stop loss contract.

(6) “Health care provider” has the meaning stated in Insurance Article, §14-101(b), Annotated Code of Maryland.

(7) “Key specialty” means:

(a) Cardiology;

(b) Dermatology;

(d) Gastroenterology;

(e) Geriatrics;

(f) Internal medicine;

(g) Obstetrics/Gynecology (Ob/Gyn);

(h) Ophthalmology;

(i) Orthopedic surgery; or

(j) Pediatrics.

(8) “Market” means:

(a) The individual Medigap market;

(b) The individual non-Medigap market;

(d) The group market other than the small-employer market governed by Insurance Article, Title 15, Subtitle 12, Annotated Code of Maryland.

(9) “Nonprofit health service plan” means a corporation that:

(a) Holds a certificate of authority from the Commissioner to act as a nonprofit health service plan; and

(b) Has been assigned a National Association of Insurance Commissioners (NAIC) company code number.

(10) “Option” means a benefit or cost-sharing arrangement that:

(a) Is available in a health benefit plan; and

(b) If chosen, would alter the cost of the health benefit plan.

(11) “Product” means a category of one or more health benefits plans sold by a nonprofit health service plan in a particular market.

(12) “Southern Maryland region” means Calvert County, Charles County, and St. Mary's County.

(13) “Western Maryland region” means Allegany County, Frederick County, Garrett County, and Washington County.

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

COMAR 31.10.32.03 Material Modification.

For purposes of Insurance Article, §14-115(d)(11)(i), Annotated Code of Maryland, a modification is material if it modifies:

A. The options available in a health benefit plan marketed in the State in a manner that results in a change of 20 percent or more in the actuarial benefit value of the health benefit plan;

B. A provider network in a manner that results in a change of:

(1) 10 percent or more in the number of health care providers in the provider network:

(a) For the entire State: or

(b) In the Baltimore metro region or DC metro region;

(2) 7 percent or more in the number of health care providers in the provider network in the Southern Maryland region;

(3) 5 percent or more in the number of health care providers in the provider network in the Eastern Shore region or Western Maryland region;

(4) 10 percent or more in the number of health care providers in a key specialty in the provider network:

(a) For the entire State; or

(b) In the Baltimore metro region, DC metro region, Eastern Shore region, Southern Maryland region, or Western Maryland region;

(5) 10 percent or more in the amount of reimbursement paid to health care providers in the provider network:

(a) For the entire State; or

(b) In the Baltimore metro region or DC metro region;

(6) 7 percent or more in the amount of reimbursement paid to health care providers in the provider network in the Southern Maryland region; or

(7) 5 percent or more in the amount of reimbursement paid to health care providers in the provider network in the Eastern Shore region or the Western Maryland region;

C. Underwriting guidelines for a product of a nonprofit health insurance plan in a manner that results in:

(1) A refusal to provide the least expensive rate for the product of a nonprofit health service plan to 20 percent or more of applicants for the product; or

(2) A relative increase of 50 percent or more in the current level of refusals to provide the least expensive rate for the product of a nonprofit health service plan to applicants; or

D. Rates or rating plans that are required to be approved by the Commissioner in a manner that results in:

(1) A rate increase of 15 percent or more in 1 year for any product sold by a nonprofit health service plan in a particular market; or

(2) A rate increase of 25 percent or more in 1 year for coverage variations within a product sold by a nonprofit health service plan in a particular market.

Cross References

31.10.32.05A

31.10.32.05B

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

COMAR 31.10.32.04 Marketing Plan.

A. Development and Submission of Marketing Plan. Each year, a nonprofit health service plan shall:

(1) Develop a marketing plan; and

(2) Submit the marketing plan and any changes to the marketing plan to the board of directors of the nonprofit health service plan for approval.

B. Contents of Marketing Plan. A nonprofit health service plan shall include in the marketing plan all of the nonprofit health service plan's marketing goals and objectives in the State, including any plan to:

(1) Reenter a market;

(2) Retain or expand enrollment in a market or market segment;

(3) Change the product portfolio of the nonprofit health service plan;

(4) Establish or change distribution methods or sales systems of the nonprofit health service plan;

(5) Establish or change a pricing strategy;

(6) Form a partnership with another entity for marketing purposes;

(7) Establish or change a communication and image strategy;

(8) Engage in community outreach and education;

(9) Market membership through one company in a holding company system rather than another company in the holding company system; or

(10) Move subscribers from one company in a holding company system to another company in the holding company system.

C. Approval Required. A nonprofit health service plan may not wholly or partially implement a marketing plan or any change to the marketing plan unless the board of the nonprofit health service plan has approved the marketing plan or the change to the marketing plan.

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

COMAR 31.10.32.05 Evaluation Report.

One year after the effective date of this chapter, the board of directors of a nonprofit health service plan shall submit to the Commissioner an evaluation report that contains:

A. The number of items that were required to be submitted to the board during the preceding year under each category contained in Regulation .03 of this chapter; and

B. An evaluation of whether Regulation .03 of this chapter is effective in ensuring that the board of a nonprofit health service plan reviews items that are appropriate for review by the board without being unduly burdened by review of items that are not appropriate for review by the board.

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

COMAR 31.10.32.06 Fiduciary Duty.

Compliance with Insurance Article, §14-115(d)(11)(i), Annotated Code of Maryland, and this chapter does not relieve the board of directors of a nonprofit health service plan or the individual members of the board from taking or refraining from taking any action otherwise required to comply with their fiduciary duties.

History

Administrative History: Effective date: September 26, 2005 (32:19 Md. R. 1588)
Authority: Insurance Article, §§2-109(a)(1) and 14-115(d)(11)(ii), Annotated Code of Maryland

31.10.33 Utilization Review of Surgical Treatment of Morbid Obesity

COMAR 31.10.33.01 Scope.

This chapter establishes the manner in which carriers and private review agents acting on behalf of carriers may apply utilization review criteria and impose documentation requirements to the surgical treatment of the morbid obesity benefit mandated by Insurance Article, §15-839, Annotated Code of Maryland.

History

Administrative History: Effective date: April 10, 2006 (33:7 Md. R. 676)
Authority: Insurance Article, §§2-109(a)(1) and 15-893, Annotated Code of Maryland; Ch. 301, Acts of 2005

COMAR 31.10.33.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Body mass index” has the meaning stated in Insurance Article, §15-839, Annotated Code of Maryland.

(2) “Carrier” means an insurer, a nonprofit health service plan, or a health maintenance organization.

(3) “Commissioner” means the Maryland Insurance Commissioner.

(4) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(5) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(6) “Member” means an individual who is covered by a contract that:

(a) Is issued or delivered by a carrier in the State; and

(b) Includes a benefit for the surgical treatment of morbid obesity.

(7) “Morbid obesity” has the meaning stated in Insurance Article, §15-839, Annotated Code of Maryland.

(8) “Nonprofit health service plan” means a person who has received a certificate of authority from the Commissioner to act as a nonprofit health service plan in the State.

(9) “Private review agent” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

(10) “Utilization review” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

History

Administrative History: Effective date: April 10, 2006 (33:7 Md. R. 676)
Authority: Insurance Article, §§2-109(a)(1) and 15-893, Annotated Code of Maryland; Ch. 301, Acts of 2005

COMAR 31.10.33.03 Utilization Review Criteria for Surgical Treatment of Morbid Obesity.

A. When establishing utilization review criteria for the surgical treatment of morbid obesity as a covered benefit under Insurance Article, §15-839, Annotated Code of Maryland, a carrier or a private review agent acting on behalf of a carrier:

(1) Shall limit the criteria to the permissible criteria listed in §B of this regulation; and

(2) May not use any criteria that is more restrictive to the member than the criteria listed in §B of this regulation.

B. Permissible Criteria for Utilization Review Decisions.

(1) Body Mass Index.

(a) Except as permitted under §B(1)(b) of this regulation, a carrier or a private review agent acting on behalf of a carrier shall consider a member to meet the body mass index criterion if the member has a body mass index greater than 40 kilograms per meter squared.

(b) If the member has a comorbid medical condition, the carrier or private review agent acting on behalf of the carrier may not impose the criterion described in §B(1)(a) of this regulation, but shall consider the member to meet the body mass index criterion if the member has a body mass index equal to or greater than 35 kilograms per meter squared.

(c) In determining whether the member has a comorbid medical condition under §B(1)(b) of this regulation, the carrier or the private review agent acting on behalf of the carrier shall consider the member to have a comorbid condition if the member has one of the following conditions:

(i) Hypertension;

(ii) A cardiopulmonary condition;

(iii) Sleep apnea;

(iv) Diabetes; or

(v) Any life threatening or serious medical condition that is weight induced.

(2) The carrier or private review agent acting on behalf of the carrier may establish a utilization review criterion that limits the benefit for surgical treatment of morbid obesity to adults who are 18 years old or older.

(3) The carrier or private review agent acting on behalf of the carrier may establish a utilization review criterion that requires the member to complete a psychological examination of the member's readiness and fitness for surgery and the necessary postoperative lifestyle changes before undergoing surgical treatment of morbid obesity.

(4) Completion of a Structured Diet Program.

(a) If a carrier or a private review agent acting on behalf of a carrier establishes a criterion that requires a member to complete a structured diet program, the carrier or private review agent acting on behalf of the carrier may not establish a criterion that is more restrictive than described in §B(4)(b) of this regulation.

(b) The carrier or the private review agent acting on behalf of the carrier shall consider the member to have completed a structured diet program, if the member completes either of the following in the 2-year period that immediately precedes the request for the surgical treatment of morbid obesity:

(i) One structured diet program for 6 consecutive months; or

(ii) Two structured diet programs for 3 consecutive months.

(c) A carrier or a private review agent acting on behalf of a carrier shall use flexibility with regard to defining a structured diet program.

(d) A carrier or a private review agent acting on behalf of a carrier shall consider commonly available diet programs, such as Weight Watchers or Jenny Craig, to be structured diet programs.

Cross References

31.10.33.04A

History

Administrative History: Effective date: April 10, 2006 (33:7 Md. R. 676)
Authority: Insurance Article, §§2-109(a)(1) and 15-893, Annotated Code of Maryland; Ch. 301, Acts of 2005

COMAR 31.10.33.04 Documentation Requirements for Structured Diet Programs.

A. The carrier or private review agent acting on behalf of the carrier shall accept any one of the items listed in §B of this regulation as acceptable documentation that the member has completed the structured diet program required by Regulation .03B(4) of this chapter.

B. Acceptable documentation of completion of a structured diet program includes:

(1) Physician notes;

(2) Notes of health care providers, other than physicians;

(3) Receipts of payment for a structured diet program; or

(4) Diet or weight loss logs from a structured diet program.

History

Administrative History: Effective date: April 10, 2006 (33:7 Md. R. 676)
Authority: Insurance Article, §§2-109(a)(1) and 15-893, Annotated Code of Maryland; Ch. 301, Acts of 2005

31.10.34 Carrier Provider Panels

COMAR 31.10.34.01 Purpose.

The purpose of this chapter is to:

A. Establish standards for the creation and maintenance of provider panels by insurers, nonprofit health service plans, and dental plan organizations; and

B. Assure the availability of health care providers to meet the health care needs of enrollees.

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

COMAR 31.10.34.02 Scope.

This chapter applies to insurers, nonprofit health service plans, and dental plan organizations that use provider panels.

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

COMAR 31.10.34.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accredited hospital” means a hospital accredited by the Joint Commission on Accreditation of Healthcare Organizations.

(2) “Carrier” means an insurer, a nonprofit health service plan, or a dental plan organization.

(3) “Enrollee” means an individual entitled to health care benefits from a carrier.

(4) “Hospital-based physician” means an anesthesiologist, pathologist, radiologist, neonatologist, hospitalist, intensivist, or emergency medicine physician that practices exclusively within an accredited hospital and provides care to enrollees only as a result of the enrollees being directed to the hospital.

(5) “Prominent carrier” means a carrier reporting at least $90,000,000 in written premium for medical benefits in Maryland in the most recent annual statement.

(6) “Provider” means a health care practitioner or group of health care practitioners licensed, certified, or otherwise authorized by law to provide health care services.

(7) “Provider panel” means the providers that contract either directly or through a subcontracting entity with a carrier to provide health care services to the carrier's enrollees under the carrier's health benefit plan.

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

COMAR 31.10.34.04 Provider Panel Sufficiency.

A. A carrier shall maintain a provider panel that is sufficient in numbers and types of available providers to meet the health care needs of enrollees.

B. Standards to meet the health care needs of enrollees shall be determined in accordance with the requirements of this chapter, and may be established by reference to any reasonable criteria used by the carrier, including but not limited to:

(1) Provider-enrollee ratios by specialty;

(2) Primary care provider-enrollee ratios;

(3) Geographic accessibility;

(4) Waiting times for appointments with providers;

(5) Hours of operation; and

(6) The volume of technological and specialty services available to serve the needs of enrollees requiring technologically advanced or specialty care.

Cross References

14.35.16.08B

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

COMAR 31.10.34.05 Availability Plan.

A. A carrier shall implement an availability plan describing:

(1) If the carrier is an insurer or nonprofit health service plan, the quantifiable and measurable standards for the number and geographic distribution of:

(a) General and internal medicine providers;

(b) Family practitioners;

(d) Obstetricians and gynecologists;

(e) High-volume specialty behavioral health care providers, including psychiatrists, psychologists, clinical social workers, and any other behavioral health care providers identified by the carrier; and

(f) High-volume specialty health care providers, identified by the carrier; or

(2) If the carrier is a dental plan organization, or an insurer or nonprofit health service plan that provides coverage only for dental services, the quantifiable and measurable standards for the number and geographic distribution of:

(a) Dentists; and

(b) Any other dental service provider identified by the carrier.

B. The availability plan required by §A of this regulation shall also include:

(1) The method used to annually assess the carrier's performance against the standards specified in the availability plan;

(2) The method used to ensure timely access to health care services, as identified by the carrier; and

(3) The carrier's process for monitoring and assuring on an ongoing basis the sufficiency of the provider panel to meet the health care needs of enrollees.

C. Availability Plan and Annual Performance Assessment.

(1) A carrier shall:

(a) On an annual basis, review and update the availability plan required by §A of this regulation;

(b) On an annual basis, conduct a performance assessment regarding its compliance with its availability plan using the method provided in §B(1) of this regulation; and

(2) In addition to the requirements of §C(1) of this regulation, a prominent carrier shall submit to the Commissioner the prominent carrier's:

(a) Availability plan not later than:

(i) 90 days after the effective date of this chapter, if the carrier is a prominent carrier on the effective date of this chapter; or

(ii) 90 days after the carrier becomes a prominent carrier, if the carrier becomes a prominent carrier after the effective date of this chapter; and

(b) Annual performance assessment:

(i) Not later than November 1, 2008, for the period beginning on the effective date of this regulation; and

(ii) Within 30 days of completing the annual performance assessment, for calendar year 2009 and thereafter.

(3) In addition to the requirements of §C(2) of this regulation, a prominent carrier shall:

(a) File with the Commissioner the availability plan described in §C(2)(a) of this regulation not later than 30 days after the carrier makes any change to the availability plan;

(b) Provide annually to the Commissioner a list of the hospital-based physician specialties available on the prominent carrier's provider panel; and

(c) Submit the report required in §A of this regulation with the submission of the prominent carrier's performance assessment required by §C(2)(b) of this regulation.

(4) The Commissioner may request additional information from the carrier in order to evaluate the carrier's performance with the availability plan.

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

COMAR 31.10.34.06 Enforcement.

A. In addition to any other enforcement powers available to the Commissioner, if a carrier violates this chapter, the Commissioner may order a carrier to take reasonably appropriate corrective action.

B. The reasonably appropriate corrective action required by the Commissioner in §A of this regulation may include, but not be limited to, ordering the carrier to:

(1) Meet the standards specified in the carrier's availability plan by increasing the number of providers by specialty or geographic area in the carrier's provider panel; and

(2) Make restitution to an enrollee who received services during the time the carrier failed to meet the standards specified in the carrier's availability plan, from a provider that was not on the carrier's provider panel, if the carrier fails to take a corrective action ordered by the Commissioner.

History

Administrative History: Effective date: July 17, 2008 (35:14 Md. R. 1247)
Authority: Insurance Article, §§2-108(2) and 15-112(b)(1)(i)1, Annotated Code of Maryland;

31.10.35 Domestic Partner Coverage

COMAR 31.10.35.01 Purpose.

The purpose of this chapter is to establish:

A. The use of the term domestic partner in a contract; and

B. The proof that a carrier may use to determine if an individual is a domestic partner of another individual.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 10, 2008 (35:3 Md. R. 287); emergency status expired July 8, 2008
Administrative History: Regulations .01—.03 adopted effective July 8, 2008 (35:12 Md. R. 1122)
Authority: Insurance Article, §§2-109(a)(1) and 15-403.2, Annotated Code of Maryland

COMAR 31.10.35.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means an insurer, a nonprofit health service plan, or a health maintenance organization.

(2) “Commissioner” means the Maryland Insurance Commissioner.

(3) “Contract” means either of the following:

(a) A health insurance contract that is issued or delivered in Maryland by an insurer or a nonprofit health service plan that provides inpatient hospital, medical, or surgical benefits to individuals or groups on an expense-incurred basis; or

(b) A contract issued or delivered in Maryland by a health maintenance organization to individuals or groups.

(4) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(5) “Insurer” has the meaning defined in Insurance Article, §1-101, Annotated Code of Maryland.

(6) “Nonprofit health service plan” means a person who has received a certificate of authority from the Commissioner to act as a nonprofit health service plan in the State.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 10, 2008 (35:3 Md. R. 287); emergency status expired July 8, 2008
Administrative History: Regulations .01—.03 adopted effective July 8, 2008 (35:12 Md. R. 1122)
Authority: Insurance Article, §§2-109(a)(1) and 15-403.2, Annotated Code of Maryland

COMAR 31.10.35.03 Domestic Partner Coverage.

A. The term “domestic partner” in a contract or rider to a contract shall include individuals of the same and the opposite sex.

B. If an individual makes an application to include a domestic partner or a child dependent of a domestic partner as a dependent under a contract, the carrier may require the individual to submit not more than the following as proof of the domestic partner relationship:

(1) The affidavit described in §C of this regulation;

(2) Proof that the individual meets one criteria from §D of this regulation; and

(3) Proof that the individual meets one criteria from §E of this regulation.

C. Affidavit Attesting to Domestic Partnership.

(1) An affidavit signed by both the insured and the domestic partner shall include only the following attestations:

(a) Both individuals are 18 years old or older;

(b) Neither individual is related to the other by blood or marriage within four degrees of consanguinity under civil law rule;

(d) Both individuals have been financially interdependent for at least 6 consecutive months prior to application in which each individual contributes to some extent to the other individual's maintenance and support with the intention of remaining in the relationship indefinitely; and

(e) Both individuals share a common primary residence.

(2) Carriers may develop their own affidavits or may use the affidavit set forth in §C(3) of this regulation.

(3) The following is a sample affidavit that complies with the requirements of §B(1) of this regulation: AFFIDAVIT OF DOMESTIC PARTNERSHIP

Instructions:

In order to enroll your Domestic Partner for medical benefits, you and your Domestic Partner must sign this Affidavit of Domestic Partnership. Please carefully read this Affidavit and the information below.

Both you and your Domestic Partner must certify that you are Domestic Partners by completing and signing below.

I, {Name of Subscriber} and {Name of Partner} certify that we are Domestic Partners and that we:

Are at least 18 years old;
Are not related to the other by blood or marriage within four degrees of consanguinity under civil law rule;
Are not married or in a civil union or domestic partnership with another individual;
Have been financially interdependent for at least 6 consecutive months prior to application in which each individual contributes to some extent to the other individual's maintenance and support with the intention of remaining in the relationship indefinitely; and
Share a common primary residence.

We understand that a civil action may be brought against us for losses, including reasonable attorney fees and court costs, because of willful falsification of information in this Affidavit of Domestic Partnership.

We understand that willful falsification of information contained in this Affidavit may result in our termination of enrollment.

We certify under penalty of perjury under applicable state laws, that the foregoing is true and accurate to the best of our knowledge.

Signature of Subscriber Date

Signature of Domestic Partner Date

D. The carrier shall accept any one of the following documents as proof of a common primary residence between domestic partners:

(1) Common ownership of the primary residence via joint deed or mortgage agreement;

(2) Common leasehold interest in the primary residence;

(3) Driver's license or State-issued identification listing a common address; or

(4) Utility or other household bill with both the name of the insured and the name of the domestic partner appearing.

E. The carrier shall accept any one of the following documents as proof of financial interdependence between domestic partners:

(1) Joint bank account or credit account;

(2) Designation as the primary beneficiary for life insurance or retirement benefits of the domestic partner;

(3) Designation as primary beneficiary under the domestic partner's will;

(4) Mutual assignments of valid durable powers of attorney under Estates and Trusts Article, §13-601, Annotated Code of Maryland;

(5) Mutual valid written advanced directives under Health-General Article, §5-601 et seq., Annotated Code of Maryland, approving the other domestic partner as health care agent;

(6) Joint ownership or holding of investments; or

(7) Joint ownership or lease of a motor vehicle.

F. A carrier may require a group policyholder to obtain the documents specified under this chapter prior to enrolling a domestic partner or a child dependent of a domestic partner.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 10, 2008 (35:3 Md. R. 287); emergency status expired July 8, 2008
Administrative History: Regulations .01—.03 adopted effective July 8, 2008 (35:12 Md. R. 1122)
Authority: Insurance Article, §§2-109(a)(1) and 15-403.2, Annotated Code of Maryland

COMAR 31.10.36.01 Purpose.

The purpose of this chapter is to establish the factors the Commissioner shall consider when approving an accrediting organization for the purposes of Insurance Article, §15-1618, Annotated Code of Maryland.

History

Administrative History: Effective date: May 4, 2009 (36:9 Md. R. 654)
Authority: Insurance Article, §§2-109, 15-1618, and 15-1619, Annotated Code of Maryland

COMAR 31.10.36.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Accrediting organization” means an entity that accredits a pharmacy benefits manager.

(2) “Applicant” means a pharmacy benefits manager that is applying for a registration from the Commissioner to act as a pharmacy benefits manager in Maryland.

(3) “Commissioner” means the Maryland Insurance Commissioner.

(4) “Pharmacy and therapeutics committee” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(5) “Pharmacy benefits manager” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

History

Administrative History: Effective date: May 4, 2009 (36:9 Md. R. 654)
Authority: Insurance Article, §§2-109, 15-1618, and 15-1619, Annotated Code of Maryland

COMAR 31.10.36.03 Determination of Approved Accrediting Organization.

A. An accrediting organization is not an approved accrediting organization for the purposes of Insurance Article, §15-601, Annotated Code of Maryland, until the Commissioner issues a letter of approval to the accrediting organization.

B. For the purpose of determining which entities are approved accrediting organizations, the Commissioner shall consider whether:

(1) The accreditation standards required to be met for accreditation by the accrediting organization meet or exceed the requirements of Insurance Article, §§15-1614 and 15-1617, Annotated Code of Maryland;

(2) The accrediting organization measures an applicant's pharmacy and therapeutics committee's ability to meet each standard; and

(3) The accrediting organization agrees to notify the Commissioner at least 30 days in advance if it revises its accreditation standards that pertain to a pharmacy and therapeutics committee or changes the method in which it reviews a pharmacy and therapeutics committee of an applicant.

C. An accrediting organization continues to be approved by the Commissioner until notified in writing by the Commissioner that its approval has been withdrawn.

History

Administrative History: Effective date: May 4, 2009 (36:9 Md. R. 654)
Authority: Insurance Article, §§2-109, 15-1618, and 15-1619, Annotated Code of Maryland

31.10.37 Delivery of Policy or Certificate

COMAR 31.10.37.01 Purpose.

The purpose of this chapter is to establish time frames in which carriers are required to provide:

A. Health insurance contracts, nonprofit health service plan contracts, health maintenance organization contracts, and dental plan organization contracts to individual contract holders and group contract holders; and

B. Health insurance certificates, nonprofit health service plan certificates, health maintenance organization certificates, and dental plan organization certificates to certificate holders.

History

Administrative History: Effective date: January 14, 2010 (37:1 Md. R. 16)
Authority: Health-General Article, §§19-705(a)(2), and 19-729; Insurance Article, §§2-109(a)(1), 4-113, and 12-20; Annotated Code of Maryland

COMAR 31.10.37.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Blanket insurance” has the meaning stated in Insurance Article, §15-305, Annotated Code of Maryland.

(2) “Carrier” means any of the following:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A dental plan organization.

(3) “Certificate” or “summary plan description” means the benefit summary that sets forth the essential elements of a group contract and that is required to be provided by a carrier to individuals covered under a group contract.

(4) “Certificate holder” means an individual who is eligible to be covered under a group contract by reason of satisfying the eligibility requirements of the group contract, other than an individual who is covered under a group contract as the spouse, domestic partner, or dependent of the certificate holder.

(5) “Contract holder” means the entity to whom a contract is issued.

(6) “Group contract” means a health insurance contract, a nonprofit health service plan contract, a health maintenance organization contract, or a dental plan organization contract issued by a carrier to a group for the purpose of covering:

(a) Employees or members of the group;

(b) The dependents of employees or members of the group; or

(7) “Health insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(8) “Individual contract” means a health insurance contract, a nonprofit health service plan contract, a health maintenance organization contract, or a dental plan organization contract issued by a carrier to a contract holder covering:

(a) The contract holder;

(b) The contract holder's dependents; or

(9) “Insurance producer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

History

Administrative History: Effective date: January 14, 2010 (37:1 Md. R. 16)
Authority: Health-General Article, §§19-705(a)(2), and 19-729; Insurance Article, §§2-109(a)(1), 4-113, and 12-20; Annotated Code of Maryland

COMAR 31.10.37.03 Delivery Requirements for Contracts and Policies.

A. Except as described in §B of this regulation, a carrier shall deliver an individual health insurance contract, an individual nonprofit health service plan contract, an individual health maintenance organization contract, or an individual dental plan organization contract to the contract holder within 60 days of the effective date of the contract.

B. If a carrier back dates an individual health insurance contract so that the individual health insurance contract is written at a younger age, the carrier shall deliver the individual health insurance contract to the contract holder within 60 days of the later of the:

(1) Effective date of the individual health insurance contract; or

(2) Date the carrier approves the application for the individual health insurance contract.

C. A carrier shall deliver a group or blanket health insurance contract, a group nonprofit health service plan, a group health maintenance organization contract, or a group dental plan organization contract to the contract holder within 60 days of the later of the:

(1) Effective date of the contract; or

(2) Date the contract holder provides all the information needed to finalize the benefits offered under the contract.

History

Administrative History: Effective date: January 14, 2010 (37:1 Md. R. 16)
Authority: Health-General Article, §§19-705(a)(2), and 19-729; Insurance Article, §§2-109(a)(1), 4-113, and 12-20; Annotated Code of Maryland

COMAR 31.10.37.04 Delivery Requirements for Certificates.

A. A carrier shall deliver a certificate under a group health insurance contract, a group nonprofit health service plan contract, a group health maintenance organization contract, or a group dental plan organization contract to the:

(1) Certificate holder within 60 days of the effective date of the certificate holder's coverage; or

(2) Group contract holder within 60 days of the effective date of the certificate holder's effective date of coverage, for delivery to each certificate holder.

B. A carrier may satisfy the requirement of §A of this regulation by making the certificate available to the certificate holder on the Internet, if:

(1) Written notice of the availability of the certificate on the Internet is provided to the:

(a) Certificate holder in writing within 60 days of the date of the certificate holder's effective date of coverage; or

(b) Group contract holder or insurance producer of record within 60 days of the effective date of the certificate holder's effective date of coverage, for the group contract holder or insurance producer of record to provide delivery to the certificate holder; and

(2) The written notice described in §B(1) of this regulation includes an option for the certificate holder to request the certificate be delivered to the certificate holder by mail.

C. The certificate requested under §B of this regulation shall be made available in paper form within 60 days of the receipt by the carrier of the request for the paper certificate from the certificate holder.

D. If a carrier cannot comply with the requirements of §A of this regulation because the group contract holder delays providing the necessary information to the carrier to issue the certificate, the carrier's time limit to provide the certificate is extended to the shorter of:

(1) 30 days from the date the employer group provides the information to the carrier; or

(2) 120 days from the effective date of the employer group contract.

History

Administrative History: Effective date: January 14, 2010 (37:1 Md. R. 16)
Authority: Health-General Article, §§19-705(a)(2), and 19-729; Insurance Article, §§2-109(a)(1), 4-113, and 12-20; Annotated Code of Maryland

COMAR 31.10.37.05 Compliance.

Failure of a carrier to deliver a contract or certificate as provided in Regulations .03 and .04 of this chapter shall constitute:

A. A violation of Insurance Article, §4-113, Annotated Code of Maryland, for a carrier, other than a health maintenance organization; or

B. A violation of Health-General Article, §19-729, Annotated Code of Maryland, for a health maintenance organization.

History

Administrative History: Effective date: January 14, 2010 (37:1 Md. R. 16)
Authority: Health-General Article, §§19-705(a)(2), and 19-729; Insurance Article, §§2-109(a)(1), 4-113, and 12-20; Annotated Code of Maryland

31.10.38 Wellness Program Incentives

COMAR 31.10.38.01 Purpose.

The purpose of this chapter is to establish a limit on the value of incentives offered by carriers in wellness programs.

History

Administrative History: Effective date: June 29, 2009 (36:13 Md. R. 907)
Administrative History: Regulation .01 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .02 amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .03B amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .04 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .05 amended effective June 6, 2016 (43:11 Md. R. 635)
Authority: Insurance Article, §§2-109(a)(1) and 27-210(h)(4), Annotated Code of Maryland

COMAR 31.10.38.02 Scope.

This chapter applies only to the wellness programs as defined in Regulation .03 of this chapter, and Insurance Article, §27-210(h)(1), Annotated Code of Maryland.

History

Administrative History: Effective date: June 29, 2009 (36:13 Md. R. 907)
Administrative History: Regulation .01 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .02 amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .03B amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .04 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .05 amended effective June 6, 2016 (43:11 Md. R. 635)
Authority: Insurance Article, §§2-109(a)(1) and 27-210(h)(4), Annotated Code of Maryland

COMAR 31.10.38.03 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer;

(b) A nonprofit health service plan;

(d) A dental plan organization.

(2) “Wellness program” has the meaning stated in Insurance Article, §27-210(h)(1), Annotated Code of Maryland.

Cross References

31.10.38.02

History

Administrative History: Effective date: June 29, 2009 (36:13 Md. R. 907)
Administrative History: Regulation .01 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .02 amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .03B amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .04 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .05 amended effective June 6, 2016 (43:11 Md. R. 635)
Authority: Insurance Article, §§2-109(a)(1) and 27-210(h)(4), Annotated Code of Maryland

COMAR 31.10.38.04 Incentive Permitted.

A carrier may offer an incentive for participation in a wellness program if the incentive:

A. Is reasonably related to the wellness program; and

B. Does not have a value that exceeds any limit established by Regulation .05 of this chapter.

History

Administrative History: Effective date: June 29, 2009 (36:13 Md. R. 907)
Administrative History: Regulation .01 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .02 amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .03B amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .04 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .05 amended effective June 6, 2016 (43:11 Md. R. 635)
Authority: Insurance Article, §§2-109(a)(1) and 27-210(h)(4), Annotated Code of Maryland

COMAR 31.10.38.05 Value of Incentive Offered.

An incentive offered for participation in a wellness program by a carrier may not have a value that exceeds $500 per year, per individual who is an insured, a subscriber, or a member.

Cross References

31.10.38.04B

History

Administrative History: Effective date: June 29, 2009 (36:13 Md. R. 907)
Administrative History: Regulation .01 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .02 amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .03B amended effective March 8, 2010 (37:5 Md. R. 433); June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .04 amended effective June 6, 2016 (43:11 Md. R. 635)
Administrative History: Regulation .05 amended effective June 6, 2016 (43:11 Md. R. 635)
Authority: Insurance Article, §§2-109(a)(1) and 27-210(h)(4), Annotated Code of Maryland

COMAR 31.10.39.01 Scope.

This chapter establishes the manner in which carriers and private review agents acting on behalf of carriers may apply utilization review criteria and impose documentation requirements regarding the treatment of children diagnosed with autism or autism spectrum disorders, when covered under a habilitative services benefit under a health benefit plan.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109(a)(1) and 15-835, Annotated Code of MarylandCh. 294, §2, Acts of 2012

COMAR 31.10.39.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Applied behavior analysis” means the design, implementation, and evaluation of environmental modifications, using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior.

(2) “Behavioral health treatment” means professional counseling and treatment programs, including applied behavior analysis, that are necessary to develop, maintain, or restore, to the maximum extent practicable, the functioning of an individual.

(3) “Carrier” means an insurer, a nonprofit health service plan, or a health maintenance organization.

(4) “Child” means an individual who is:

(a) Younger than 19 years of age; and

(b) Diagnosed with autism or autism spectrum disorder.

(5) “Commissioner” means the Maryland Insurance Commissioner.

(6) “Habilitative services” has the meaning stated in Insurance Article, §15-835, Annotated Code of Maryland.

(7) “Health benefit plan” has the meaning stated in Insurance Article, §15-1301, Annotated Code of Maryland.

(8) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(9) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(10) “Nonprofit health service plan” means a person who has received a certificate of authority from the Commissioner to act as a nonprofit health service plan in the State.

(11) “Private review agent” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

(12) Psychological Care.

(a) “Psychological care” means direct or consultative services provided by a psychologist licensed in the state in which the services are provided or by a social worker licensed in the state in which in which the services are provided.

(b) “Psychological care” includes psychotherapy.

(13) “Therapeutic care” means services provided by a speech-language pathologist, occupational therapist, or physical therapist licensed in the state in which the services are provided.

(14) “Utilization review” has the meaning stated in Insurance Article, §15-10B-01, Annotated Code of Maryland.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109(a)(1) and 15-835, Annotated Code of MarylandCh. 294, §2, Acts of 2012

COMAR 31.10.39.03 Utilization Review Criteria for Treatment of Autism and Autism Spectrum Disorders.

A. The utilization review criteria of a carrier or private review agent acting on behalf of a carrier to determine medical necessity or appropriateness may not be more restrictive for habilitative services for the treatment of autism and autism spectrum disorders than the criteria listed in this regulation.

B. The carrier’s criteria for habilitative services shall include criteria for behavioral health treatment, psychological care, and therapeutic care.

C. Utilization review criteria of a carrier or private review agent acting on behalf of a carrier may require:

(1) A comprehensive evaluation of a child by the child’s primary care provider or specialty physician identifying the need for habilitative services for the treatment of autism or autism spectrum disorder;

(2) A prescription from a child’s primary care provider or specialty physician that includes specific treatment goals; and

(3) An annual review by the prescribing primary care provider or specialty physician, in consultation with the habilitative services provider, that includes:

(a) Documentation of benefit to the child;

(b) Identification of new or continuing treatment goals; and

D. A carrier or private review agent acting on behalf of a carrier may not deny coverage based solely on the number of hours of habilitative services prescribed, for:

(1) Less than or equal to 25 hours per week in the case of a child who is at least 18 months of age and who has not reached the child’s sixth birthday, or

(2) Less than or equal to 10 hours per week in the case of a child who has reached the child’s sixth birthday and who has not reached the child’s nineteenth birthday.

(3) Notwithstanding §D(1) and (2) of this regulation, a carrier may authorize additional hours of habilitative services that are medically necessary and appropriate for the treatment of autism or autism spectrum disorders.

E. A carrier may limit payment for habilitative services to payment for services provided by individuals who are licensed, certified, or otherwise authorized under the Health Occupations Article or similar licensing, certification, or authorization requirements of another state or U.S. territory where the habilitative services are provided.

F. Location of services.

(1) A carrier may not deny payment for habilitative services if a treatment goal identifies the location of the habilitative services as the child’s educational setting.

(2) Nothing in §F(1) of this regulation shall be construed to require a carrier to provide services to a child under an individualized education program or any obligation imposed on a public school by the Individuals With Disabilities Education Act, 20 U.S.C. 1400 et seq., as amended from time to time.

G. A carrier or a private review agent acting on behalf of a carrier may not deny payment for applied behavior analysis on the basis that it is experimental or investigational.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109(a)(1) and 15-835, Annotated Code of MarylandCh. 294, §2, Acts of 2012

COMAR 31.10.39.04 Coverage for Habilitative Services.

Coverage required under this chapter may be subject to limitations in a health benefit plan relating to coordination of benefits, participating provider requirements, restrictions on services provided by family or household members, case management provisions, and co-payments, co-insurance, and deductible amounts.

History

Administrative History: Effective date: March 17, 2014 (41:5 Md. R. 348)
Authority: Insurance Article, §§2-109(a)(1) and 15-835, Annotated Code of MarylandCh. 294, §2, Acts of 2012

COMAR 31.10.40 Child Only Policies [Repealed.]

History

Administrative History: Effective date:
Administrative History: Regulations .01—.08 adopted as an emergency provision effective December 14, 2010 (38:2 Md. R. 81); adopted permanently effective March 7, 2011 (38:5 Md. R. 320)
Administrative History: ——————
Administrative History: Regulations .01—.08 repealed effective June 23, 2014 (41:12 Md. R. 669)

31.10.41 Assignment of Benefits to Nonpreferred Providers

COMAR 31.10.41.01 Applicability.

This chapter applies to preferred provider insurance policies that are issued, renewed, or delivered by a carrier in the State on or after July 1, 2011.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Allowed amount” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(2) “Assignment of benefits” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(3) “Carrier” means an insurer or nonprofit health service plan.

(4) “Covered service” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(5) “Explanation of benefits” means the document that is provided by a carrier to an insured that explains the claims paid, reduced, or denied by the carrier.

(6) “Hospital-based physician” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland and does not include an on-call physician.

(7) “Insured” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(8) “Insurer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(9) “Nonpreferred provider” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(10) “Nonprofit health service plan” means a person who has a certificate of authority to operate as a nonprofit health service plan in Maryland.

(11) “On-call physician” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(12) “Preferential basis” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(13) “Preferred provider insurance policy” means a policy or insurance contract issued or delivered in the State by a carrier under which health care services furnished by a preferred provider are paid on a preferential basis.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.03 Assignment of Benefits — On-Call Physicians.

A. A nonpreferred provider who is an on-call physician may accept an assignment of benefits under a preferred provider insurance policy.

B. A nonpreferred provider who is an on-call physician and accepts an assignment of benefits under a preferred provider insurance policy shall:

(1) Accept the carrier’s allowed amount as payment in full for the covered services provided;

(2) Collect or attempt to collect from the insured only the monies for the items identified in Insurance Article, §14-205.2(b)(3), Annotated Code of Maryland;

(3) Submit to the carrier the uniform claims form required by COMAR 31.10.11.03 and indicate acceptance of the assignment of benefits in box 27 of the uniform claims form to satisfy the notice requirements under Insurance Article, §14-205.2(a)(3), Annotated Code of Maryland; and

(4) Designate CPT code 99026, or its successor, on the uniform claims form.

C. A carrier shall reimburse a nonpreferred provider who is an on-call physician and who has provided the information specified in §B(3) and (4) of this regulation in accordance with the provisions of Insurance Article, §14-205.2(c), Annotated Code of Maryland.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.04 Assignment of Benefits — Hospital-Based Physicians.

A. A nonpreferred provider who is a hospital-based physician may accept an assignment of benefits under a preferred provider insurance policy.

B. A nonpreferred provider who is a hospital-based physician and accepts an assignment of benefits under a preferred provider insurance policy shall:

(1) Accept the carrier’s allowed amount as payment in full for the covered services provided;

(2) Collect or attempt to collect from the insured only the monies for the items identified in Insurance Article, §14-205.2(b)(3), Annotated Code of Maryland; and

(3) Submit to the carrier the uniform claims form required by COMAR 31.10.11.03 and indicate acceptance of the assignment of benefits in box 27 of the uniform claims form to satisfy the notice requirements of Insurance Article, §14-205.2(a)(3), Annotated Code of Maryland.

C. A carrier shall reimburse a nonpreferred provider who is a hospital-based physician and who has provided the information specified in §B(3) of this regulation in accordance with the provisions of Insurance Article, §14-205.2(d), Annotated Code of Maryland.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.05 Assignment of Benefits — Nonpreferred Providers.

A. This regulation applies to carriers who receive claims for services provided by physicians who are nonpreferred providers but are not on-call physicians or hospital-based physicians.

B. A carrier shall permit a nonpreferred provider described in §A of this regulation to accept an assignment of benefits under a preferred provider insurance policy offered by the carrier.

C. Except as provided in Insurance Article, §14-205.3(g), Annotated Code of Maryland, a carrier that receives a claim for services provided by a nonpreferred provider described in §A of this regulation who accepts an assignment of benefits under a preferred provider insurance policy shall pay the nonpreferred provider directly if the nonpreferred provider:

(1) Provides a copy of the disclosure set forth in Regulation .06 of this chapter to an insured before performing a health care service for the insured; and

(2) Submits a copy of the signed disclosure set forth in Regulation .06 of this chapter to the carrier.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.06 Required Disclosure for Nonpreferred Providers Seeking Assignment of Benefits.

A. Except for a nonpreferred provider who is an on-call physician or a hospital-based physician, a nonpreferred provider who is a physician shall provide a copy of the disclosure set forth in §B of this regulation to each insured before performing a health care service for the insured in order to qualify for an assignment of benefits under a preferred provider insurance policy.

B. The disclosure text required by §A of this regulation shall be printed in at least 12 point type and shall read as follows:

“IMPORTANT NOTICE REGARDING YOUR HEALTH INSURANCE

Your doctor is not a part of your health insurer’s network. You may pay more for the services provided by your doctor because:

• Your doctor’s charge may be higher than the amount your health insurer will pay and, if so, you may be required to pay the difference; and

• Your coinsurance, deductible and out-of-pocket maximum may be higher because your doctor is not in your health insurer’s network.

Your doctor may charge you for services not covered under your health insurance contract.

Your doctor will provide you with the following information before performing the services for you:

• An estimate of the cost of the services;

• Any payment terms that apply; and

• Whether your doctor will charge you interest on any unpaid balance, and the amount of the interest, if any.

I, [patient’s name] __________________________ received the information above and authorize my health insurer to reimburse my doctor directly for the services provided [today’s date]_______________.”

Cross References

31.10.41.05C(1)

31.10.41.05C(2)

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

COMAR 31.10.41.07 Notice to Insureds by Carriers.

A. A carrier shall provide the information listed in §B of this regulation with the payment to the insured for health care services if:

(1) The carrier receives a claim for health care services provided by a physician who is a nonpreferred provider and who is not an on-call physician or a hospital-based physician; and

(2) The insured did not provide an assignment of benefits to the physician who provided the health care services.

B. The information required by §A of this regulation shall include:

(1) The specific claim covered by the payment;

(2) The amount paid for the claim;

(3) The amount that is the insured’s responsibility; and

(4) A statement instructing the insured to use the payment to pay the nonpreferred provider in the event the insured has not paid the nonpreferred provider in full for the health care services rendered by the nonpreferred provider.

C. If the payment for a claim is sent to the insured by the carrier with an explanation of benefits, the carrier shall include the information required to be provided under §§A and B of this regulation on the explanation of benefits or on a separate page included with the explanation of benefits.

D. If the payment for a claim is sent to the insured by the carrier separately from the explanation of benefits, the carrier shall include the information required under §§A and B of this regulation with the payment of claim.

History

Administrative History: Effective date: September 19, 2011 (38:19 Md. R. 1148)
Authority: Insurance Article, §§2-109(a)(1), 14-205.2, and 14-205.3, Annotated Code of Maryland

31.10.42 Continuity of Health Care Notice

COMAR 31.10.42.01 Scope.

This chapter applies to each:

A. Receiving carrier that issues or delivers individual or group health benefit plans in Maryland; and

B. Receiving managed care organization that enrolls Program recipients in Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2015 (42:1 Md. R. 16); adopted permanently effective April 27, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109(a)(1), 15-140, and 15-10D-01, Annotated Code of Maryland and Ch. 159, §3, Acts of 2013

COMAR 31.10.42.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer authorized to sell health insurance;

(b) A nonprofit health service plan;

(d) A dental plan organization; or

(e) Any other entity providing a plan of health insurance, health benefits, or health services authorized under the Insurance Article of the Annotated Code of Maryland or the Affordable Care Act.

(2) “Enrollee” means a:

(a) Person entitled to health care benefits from a carrier; or

(b) Program recipient who is enrolled in a managed care organization.

(3) “Health benefit plan” has the meaning stated in Insurance Article, §15-140, Annotated Code of Maryland.

(4) “Managed care organization” means:

(a) A certified health maintenance organization that is authorized to receive medical assistance prepaid capitation payments;

(b) A corporation that:

(i) Is a managed care system that is authorized to receive medical assistance prepaid capitation payments;

(ii) Enrolls only Program recipients or individuals or families served under the Maryland Children’s Health Program; and

(iii) Is subject to the requirements of Health-General Article, §15-102.4, Annotated Code of Maryland.; or

(5) “Program recipient” means an individual who receives benefits under the Maryland Medical Assistance Program.

(6) “Receiving carrier” means the carrier that issues the new health benefit plan when an enrollee transitions from another carrier or a managed care organization.

(7) “Receiving managed care organization” means the managed care organization that accepts the enrollee when the enrollee transitions from another managed care organization or a carrier.

(8) “Relinquishing carrier” means a carrier that issued the prior health benefit plan when an enrollee transitions to a new carrier or a managed care organization.

(9) “Relinquishing managed care organization” means a managed care organization in which an enrollee had been enrolled prior to the enrollee’s transition to a new managed care organization or a carrier.

(10) “Transitioning enrollee” means an enrollee:

(a) Who has an effective date of coverage with a receiving carrier or a receiving managed care organization on or after January 1, 2015, under a contract that is issued or renewed on or after January 1, 2015; and

(b) Whose coverage under the receiving carrier or receiving managed care organization began within 1 month of the date coverage terminated under the:

(i) Health benefit plan with a relinquishing carrier; or

(ii) Relinquishing managed care organization.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2015 (42:1 Md. R. 16); adopted permanently effective April 27, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109(a)(1), 15-140, and 15-10D-01, Annotated Code of Maryland and Ch. 159, §3, Acts of 2013

COMAR 31.10.42.03 Requirement to Provide Continuity of Health Care Notice.

A. A receiving carrier shall send a transitioning enrollee the Continuity of Health Care Notice set forth in Regulation .04A of this chapter:

(1) Except as provided in §A(2) of this regulation, within 30 days of the enrollee’s effective date of coverage; and

(2) If the enrollee’s coverage is made effective retroactively, within 30 days of the date the receiving carrier is notified of the enrollment.

B. A receiving managed care organization shall send a transitioning enrollee the Continuity of Health Care Notice set forth in Regulation .04B of this chapter:

(1) Except as provided in §B(2) of this regulation, within 30 days of the enrollee’s effective date of coverage; and

(2) If the enrollee’s coverage is made effective retroactively, within 30 days of the date the receiving managed care organization is notified of the enrollment.

C. The Continuity of Health Care Notices shall be in the language and format described in Regulation .04 of this chapter in not less than 12-point type.

Cross References

31.10.42.04A

31.10.42.04B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2015 (42:1 Md. R. 16); adopted permanently effective April 27, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109(a)(1), 15-140, and 15-10D-01, Annotated Code of Maryland and Ch. 159, §3, Acts of 2013

COMAR 31.10.42.04 Continuity of Health Care Notice.

A. The following form is to be used by receiving carriers as the Continuity of Health Care Notice required by Regulation .03A of this chapter.

B. The following form is to be used by receiving managed care organizations as the Continuity of Health Care Notice required by Regulation .03B of this chapter.

FORMS AT END OF CHAPTER

Cross References

31.10.42.03A

31.10.42.03B

31.10.42.03C

Attachments

31.10.42.04-forms

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted as an emergency provision effective January 1, 2015 (42:1 Md. R. 16); adopted permanently effective April 27, 2015 (42:8 Md. R. 608)
Authority: Insurance Article, §§2-109(a)(1), 15-140, and 15-10D-01, Annotated Code of Maryland and Ch. 159, §3, Acts of 2013

31.10.43 Medical Stop-Loss Insurance Disclosure

COMAR 31.10.43.01 Scope.

This chapter applies to carriers that sell medical stop-loss insurance to small employers in Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted effective January 1, 2016 (42:23 Md. R. 1436)
Authority: Insurance Article, §§2-109(a)(1) and 15-129(f)(3), Annotated Code of Maryland

COMAR 31.10.43.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means an insurer or nonprofit health service plan that sells medical stop loss insurance in Maryland.

(2) “Medical stop-loss insurance” has the meaning stated in Insurance Article, §15-129, Annotated Code of Maryland.

(3) “Medical stop-loss insurance disclosure form” means the form shown in Regulation .04 of this chapter.

(4) “Small employer” has the meaning stated in Insurance Article, §31-101, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted effective January 1, 2016 (42:23 Md. R. 1436)
Authority: Insurance Article, §§2-109(a)(1) and 15-129(f)(3), Annotated Code of Maryland

COMAR 31.10.43.03 Rules for Providing the Medical Stop-Loss Insurance Disclosure Form.

A. Before entering into a policy or contract of medical stop-loss insurance with a small employer, a carrier shall provide the small employer a completed medical stop-loss insurance disclosure form.

B. When determining whether an employer satisfies the definition of a small employer, the carrier shall base the determination on the definition that applies on the proposed effective date of the medical stop-loss insurance policy or contract.

C. The medical stop-loss insurance disclosure form shall be printed in at least 12-point type.

D. The portion of the medical stop-loss insurance disclosure form that requires a listing of any limitations in the medical stop-loss insurance policy or contract is required to include any:

(1) Dollar limitations in the medical stop-loss insurance policy or contract, such as annual limitations;

(2) Day or visit limits on the services covered under the medical stop-loss insurance policy or contract;

(3) Limitations or exclusions that apply to benefits covered under the medical stop-loss insurance policy or contract, such as:

(a) Pre-existing condition exclusions;

(b) Exclusions or limitations for particular services, such as an exclusion or limitation for prescription drugs or mental health services;

(d) Limitations or exclusions for non-medically necessary services; and

(e) Limitations or exclusions for experimental or investigational services; and

(4) Different attachment points for any particular service, such as organ transplants.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted effective January 1, 2016 (42:23 Md. R. 1436)
Authority: Insurance Article, §§2-109(a)(1) and 15-129(f)(3), Annotated Code of Maryland

COMAR 31.10.43.04 Medical Stop-Loss Insurance Disclosure Form.

The medical stop-loss insurance disclosure form shall read as follows:

FORM AT END OF CHAPTER

Cross References

31.10.43.02B(3)

Attachments

31.10.43.04-form

History

Administrative History: Effective date:
Administrative History: Regulations .01—.04 adopted effective January 1, 2016 (42:23 Md. R. 1436)
Authority: Insurance Article, §§2-109(a)(1) and 15-129(f)(3), Annotated Code of Maryland

31.10.44 Network Adequacy

COMAR 31.10.44.01 Scope.

This chapter applies to carriers that issue or renew health benefit plans in Maryland and use a provider panel for a health benefit plan offered in Maryland.

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Access plan” means the materials that each carrier is required to file annually with the Commissioner to demonstrate that each of the carrier’s provider panels is adequate to meet the needs of its enrollees.

(2) “Ambulatory infusion therapy center” means any location authorized to administer chemotherapy or infusion services on an outpatient basis.

(3) “Behavioral health care” means care for mental health or a substance use disorder.

(4) “Carrier” means:

(a) An insurer authorized to sell health insurance;

(b) A nonprofit health service plan; or

(5) “Certified registered nurse practitioner” means an individual who is licensed as a certified nurse practitioner under Health Occupations Article, Title 8, Subtitle 3, Annotated Code of Maryland.

(6) “Continuing care patient” means an individual who, with respect to a provider or facility:

(a) Is undergoing a course of treatment for a serious and complex condition from the provider or facility;

(b) Is undergoing a course of institutional or inpatient care from the provider or facility;

(c) Is scheduled to undergo nonelective surgery from the provider or facility, including receipt of postoperative care from such provider or facility with respect to such a surgery;

(d) Is pregnant and undergoing a course of treatment for the pregnancy from the provider or facility; or

(e) Is or was determined to be terminally ill, as determined under Section 1861(dd)(3)(A) of the Social Security Act, and is receiving treatment for such illness from such provider or facility

(7) “Enrollee” means a person entitled to health care benefits from a carrier under a policy or contract subject to Maryland law.

(8) “Essential community provider” means a provider that serves predominantly low-income or medically underserved individuals. “Essential community provider” includes:

(a) Local health departments;

(b) Outpatient mental health and community based substance use disorder programs;

(d) School-based health centers.

(9) “Group model HMO” means a type of health maintenance organization that:

(a) Contracts with one multispecialty group of physicians who are employed by and shareholders of the multispecialty group; and

(b) Provides or arranges for the provision of physician and other health care services to patients at medical facilities operated by the HMO or employs its own physicians and other providers on a salaried basis in health maintenance organization buildings to provide care to enrollees of the health maintenance organization.

(10) “Health benefit plan” has the meaning stated in Insurance Article, §15-112, Annotated Code of Maryland.

(11) “Health care facility” has the meaning stated in Insurance Article, §15-112, Annotated Code of Maryland.

(12) “Health professional shortage area” means those geographic areas in Maryland which have been designated by the Health Resources and Services Administration as such, as a result of having a shortage of primary medical care or behavioral health providers.

(13) “HEDIS” means the Healthcare Effectiveness Data and Information Set of standardized performance measures, developed and used by the National Committee for Quality Assurance, to evaluate managed care health plan performance for care and services provided.

(14) “Hospital” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(15) “Hospital-based physician” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(16) “Material change to an access plan” means a change to an access plan that affects a carrier’s ability to comply with the requirements of this chapter.

(17) “Network” means:

(a) A carrier’s participating providers and the health care facilities with which a carrier contracts to provide health care services to the carrier’s enrollees under the carrier’s health benefit plan.

(b) If a carrier uses a provider panel developed by a subcontracting entity, “network” includes providers and health care facilities that contract with the subcontracting entity to provide health care services to the carrier’s enrollees under the carrier’s health benefit plan.

(18) “Network adequacy waiver” means the Commissioner’s decision to relieve a carrier of the obligation to comply with certain network adequacy standards in this chapter for 1 year.

(19) “On-call physician” has the meaning stated in Insurance Article, §14-201, Annotated Code of Maryland.

(20) “Opioid treatment services provider” means a program with a valid and current accreditation-based license under COMAR 10.63 to provide community-based behavioral health services, and authorized to provide opioid treatment services.

(21) “Participating provider” means a provider on a carrier’s provider panel.

(22) “Preventive care” means health care provided for the prevention and early detection of disease, illness, injury or other health condition, and includes all of the services required by 42 U.S.C. §300gg-13.

(23) “Primary care provider” means:

(a) A provider who is responsible for:

(i) Providing initial and primary care to patients;

(ii) Maintaining the continuity of patient care; or

(iii) Initiating referrals for specialist care.

(b) “Primary care provider” includes:

(i) A physician whose practice of medicine is limited to general practice; and

(ii) A board-certified or board-eligible internist, pediatrician, obstetrician-gynecologist or family practitioner.

(24) “Provider” means a person or group of persons licensed, certified, or otherwise authorized by law to provide health care services.

(25) “Provider panel” means the providers that contract either directly or through a subcontracting entity with a carrier to provide health care services to the carrier’s enrollees under the carrier’s health benefit plan. “Provider panel” does not include an arrangement in which any provider may participate solely by contracting with the carrier to provide health care services at a discounted fee-for-service rate.

(26) “Residential crisis services” has the meaning stated in Insurance Article, §15-840, Annotated Code of Maryland.

(27) “Road travel distance” means:

(a) Actual driving distance measured between two geographic locations based on turn-by-turn directions along public roads; or

(b) Subject to approval by the Commissioner, driving distance between two geographic locations estimated using a methodology that, in the discretion of the Commissioner, sufficiently accounts for significant geographic barriers that are impassable by automobile, such as the Chesapeake Bay.

(28) “Rural area” means a zip code that, according to the Maryland Department of Planning, has a human population of less than 1,000 per square mile.

(29) “School-based health center” means a community health resource described in Health-General Article, §19-2101, Annotated Code of Maryland that is located within an elementary, middle, or high school and approved by the Maryland Department of Health.

(30) “Specialty provider” means a provider who:

(a) Focuses on a specific area of physical care or behavioral health care for a group of patients;

(b) Has successfully completed required professional training; and

(c) For a physician, has obtained Board certification or is Board eligible through the American Board of Medical Specialties.

(31) “Suburban area” means a zip code that, according to the Maryland Department of Planning, has a human population equal to or more than 1,000 per square mile, but less than 3,000 per square mile.

(32) “Telehealth” has the meaning stated in Insurance Article, §15-139, Annotated Code of Maryland.,

(33) “Urban area” means a zip code that, according to the Maryland Department of Planning, has a human population equal to or greater than 3,000 per square mile.

(34) “Urgent care” means the treatment for a condition of an enrollee that satisfies either of the following:

(a) A medical condition, including a physical condition or a behavioral health condition, that, in the absence of medical care or treatment within 72 hours, could reasonably be expected by an individual, acting on behalf of a carrier and applying the judgment of a prudent layperson who possesses an average knowledge of health and medicine, would result in:

(i) Placing the enrollee’s life or health in serious jeopardy;

(ii) The inability of the enrollee to regain maximum function;

(iii) Serious impairment to the enrollee’s bodily function;

(iv) Serious dysfunction of any bodily organ or part of the enrollee; or

(v) The enrollee remaining seriously ill with behavioral health symptoms that cause the enrollee to be a danger to self or others; or

(b) A medical condition of an enrollee, including a physical condition or a behavioral health condition, that, in the absence of medical care or treatment within 72 hours, would, in the opinion of a provider with knowledge of the enrollee’s medical condition, subject the enrollee to severe pain that cannot be adequately managed without the care or treatment.

(35) “Waiting time” means the time from the initial request for health care services by an enrollee or by the enrollee’s treating provider to the earliest date offered for the appointment for services with a provider possessing the appropriate skill and expertise to treat the condition.

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.03 Network Adequacy Standards.

A. Sufficiency Standards.

(1) A carrier shall develop and maintain a network of providers in sufficient numbers, geographic locations, and practicing specialties to ensure enrollees have access to participating providers for the full scope of benefits and services covered under the carrier’s health benefit plan.

(2) A carrier shall establish written policies and procedures to implement a process for addressing network deficiencies that result in an enrollee lacking access to any providers with the professional training and expertise necessary to deliver a covered service without unreasonable travel or delay.

(3) A carrier shall clearly define and specify referral requirements, if any, to specialty and other providers.

(4) A carrier shall take reasonable steps to ensure that participating providers provide physical access, reasonable accommodations, and accessible equipment for enrollees with physical or mental disabilities.

(5) A carrier’s written policies and procedures to monitor availability of services shall include how the carrier will monitor the availability of services for:

(a) Continuing care patients;

(b) Individuals with physical or mental disabilities, including individuals who have disabilities that limit their physical ability to access services; and

(6) A carrier shall take reasonable steps to ensure services are delivered in a culturally competent manner to all enrollees, including enrollees:

(a) With limited English proficiency;

(b) With diverse cultural, racial, and ethnic backgrounds; and

(7) A carrier must have the ability to identify, by county and for the City of Baltimore, the number of participating providers for each facility type listed in the charts in Regulation .05A(5) and B(5) of this chapter and each provider type code and specialty code listed on the uniform credentialing form described in Insurance Article, §15-112.1, Annotated Code of Maryland.

(8) The identification of the number of participating providers described in §A(7) of this regulation:

(a) Shall include either:

(i) All participating providers who were credentialed for a specific provider type or specialty code listed in the uniform credentialing form described in Insurance Article, §15-112.1, Annotated Code of Maryland; or

(ii) All participating providers who reported a specific provider type or specialty code when completing the uniform credentialing form described in Insurance Article, §15-112.1, Annotated Code of Maryland; and

(b) May include additional participating providers identified by the carrier through other documented means.

(9) A carrier shall retain copies of its policies and procedures required by this chapter for a period of 3 years following the date the policies and procedures were last effective.

(10) At the request of the Commissioner, a carrier shall file with the Commissioner a copy of its current and retained past policies and procedures required by this chapter. A carrier may request a finding by the Commissioner that its policies and procedures are considered confidential commercial information.

B. Monitoring Sufficiency Standards.

(1) A carrier shall continuously monitor its provider network for compliance with this chapter and shall conduct internal compliance audits for the standards listed in Regulations .05, .06, and .07 of this chapter on at least a quarterly basis; and

(2) A carrier shall continuously verify and update its network directory consistent with Insurance Article, §15-112, Annotated Code of Maryland and §2799A-5of the Public Health Service Act, enacted by 116 of the federal No Surprises Act.

Cross References

31.10.44.04D

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.04 Filing and Content of Access Plan.

A. Using the instructions on the Maryland Insurance Administration's website for submission method and to determine rural, suburban, and urban zip code areas, each carrier subject to this chapter shall file an annual access plan with the Commissioner on or before July 1 of each year for each provider panel used by the carrier, with the first access plan filing due on or before July 1, 2018.

B. If a carrier makes a material change to an access plan, the carrier shall:

(1) Notify the Commissioner of the change in writing within 15 business days after the material change to the access plan occurs; and

(2) Include in the notice required under §B(1) of this regulation a reasonable timeframe within which the carrier will file with the Commissioner an update to the existing access plan for review by the Commissioner.

C. Each annual access plan filed with the Commissioner shall include the following information in the standardized format described on the Maryland Insurance Administration’s website:

(1) An executive summary in the form set forth in Regulation .11 of this chapter;

(2) The information and process required by Insurance Article, §15-112(c)(4), Annotated Code of Maryland, and the methods used by the carrier to comply with the monitoring requirement under §15-112(c)(5);

(3) A description of out-of-network claims received by the carrier in the prior calendar year, which shall include:

(a) The percentage of total claims received that are out-of-network claims;

(b) The percentage of out-of-network claims received that are paid;

(c) The percentage of claims described in §C(3)(a) and (b) of this regulation that the carrier identifies as claims for emergency services, on-call physicians, or hospital-based physicians;

(d) The percentage of total claims received that are out-of-network claims for:

(i) Subject to §G of this regulation, all enrollees with a residence in a zip code where less than 100 percent of enrollees have access to a provider within the applicable travel distance standard in Regulation .05 of this chapter for the provider type in the claim, listed by provider type for each of the rural, suburban, and urban areas;

(ii) Subject to §G of this regulation, the ten provider types with the highest number of out-of-network claims for enrollees with a residence in each of the rural, suburban, and urban areas, listed by provider type and geographic area; and

(iii) Subject to §G of this regulation, the ten provider types with the highest percentage of total claims that are out-of-network claims for enrollees with a residence in each of the rural, suburban, and urban areas, listed by provider type and geographic area;

(e) For each provider type and geographic area described in §C(3)(d) of this regulation, the following information regarding requests to obtain a referral to an out-of-network provider in accordance with Insurance Article, §15-830, Annotated Code of Maryland:

(i) The number of referral requests received;

(ii) The number of referral requests granted;

(iii) The percentage of out-of-network claims received for which a referral was requested;

(iv) The percentage of out-of-network claims received for which a referral was granted;

(v) The number of single case agreements requested between the carrier and an out-of-network provider;

(vi) The number of single case agreements entered between the carrier and an out-of-network provider;

(vii) The percentage of out-of-network claims received for which a single case agreement was requested between the carrier and an out-of-network provider; and

(viii) The percentage of out-of-network claims received for which a single case agreement was entered between the carrier and an out-of-network provider; and

(f) Any additional information deemed necessary by the carrier to provide context for the information described in §C(3)(a)—(e) of this regulation;

(4) A description of complaints received by the carrier in the prior calendar year relating to access to or availability of providers, which shall include:

(a) The total number of complaints made by enrollees relating to the waiting time or distance of participating providers;

(b) The total number of complaints made by providers, whether or not under contract, relating to the waiting time or distance of participating providers;

(d) The total number of complaints relating to the dollar amount of reimbursement for out-of-network claims, including balance billing; and

(e) The percentage of complaints described in §C(4)(d) of this regulation that are for claims subject to the federal No Surprises Act;

(5) A description of the carrier’s procedures, including training of customer service representatives, detailing how claims will be handled when participating providers are not available and an enrollee obtains health care services pursuant to Insurance Article, §15-830, Annotated Code of Maryland;

(6) A description of the procedures that the carrier will utilize to assist enrollees in obtaining medically necessary services when no participating provider is available without unreasonable travel or delay, including procedures to coordinate care and to limit the likelihood of costs to the enrollee that exceed the amount that would have been incurred had the health care services been provided by a participating provider;

(7) A description of whether the carrier’s provider contracts require health care providers to engage in appointment management, including procedures related to:

(a) No show policies;

(b) Patient appointment confirmation;

(d) Patient portals;

(e) Access to a provider performance dashboard to monitor appointment lag time, no show rate, bump rate (health care provider initiated cancelation of a scheduled appointment), and new patient appointments; and

(f) Weekly polling programs of providers to check for appointment availability;

(8) An indication of whether the network directory is searchable by covered benefit, for example, hearing aid, knee surgery, or physical therapist;

(9) An indication of whether the carrier has a patient portal for enrollees to make health care appointments;

(10) A description of whether the carrier has a formal process for assisting enrollees who have been unsuccessful in using the network directory to locate an appropriate provider with the necessary skill and expertise to treat the enrollee’s condition;

(11) A description of whether and how the carrier considered the role of public transportation in addressing the needs of enrollees who do not own a personal automobile when evaluating enrollees’ access to care under the travel distance standards described in Regulation .05 of this chapter;

(12) A description of telehealth utilization as described in Regulation .08 of this chapter;

(13) Documentation justifying to the Commissioner how the access plan meets each network sufficiency standard set forth in Regulations .05 — .07 of this chapter; and

(14) A list of all changes made to the access plan filed the previous year.

D. The Commissioner may require a carrier to include in the annual access plan a report of the number of participating providers described in Regulation .03A(7) of this chapter for designated facility types, provider type codes, and specialty codes, if the Commissioner notifies the carrier in writing and identifies the particular facility types, provider type codes, and specialty codes that must be reported.

E. The description required by Insurance Article, §15-112(c)(4)(iii), Annotated Code of Maryland shall identify whether the carrier has:

(1) Engaged in outreach to minority health care providers; and

(2) Offered financial incentives, such as payment towards loans previously incurred for health care provider education, to encourage health care providers to contract with the carrier.

F. The description required by Insurance Article, §15-112(c)(4)(iv), Annotated Code of Maryland shall include:

(1) The number of primary care providers who report to the carrier that they use any of the following languages in their practices:

(a) American Sign Language;

(b) Spanish;

(d) Chinese (Mandarin or Cantonese);

(e) Tagalog; or

(f) French;

(2) A description of outreach efforts to recruit and retain providers from diverse cultural, racial, or ethnic backgrounds;

(3) A copy of the most recent enrollees’ language needs assessment made by or on behalf of the carrier, if one was made;

(4) A copy of the most recent demographic profile of the enrollee population made by or on behalf of the carrier, if one was made;

(5) A copy of any analysis or assessment made of provider network requirements based on an assessment of language needs or demographic profile of the enrollee population;

(6) A copy of any provider manual provisions that describe requirements for access to individuals with physical or mental disabilities; and

(7) Copies of policies and procedures designed to ensure that the provider network is sufficient to address the needs of both adult and child enrollees, including adults and children with:

(a) Limited English proficiency or illiteracy;

(b) Diverse cultural, racial, or ethnic backgrounds;

(d) Serious, chronic, or complex health conditions.

G. For a group model HMO plan, when an enrollee’s place of employment is used instead of residence to calculate travel distance under Regulation .05B of this chapter, the data described in §C(3) of this regulation that is based on enrollee residence shall be reported based on the enrollee’s place of employment.

H. The requirements found in §§C(3)—(12) and D— G of this regulation shall apply to annual access plans submitted on or after July 1, 2024.

I. A carrier may file the information described in §C(3), (4), and (12) of this regulation separately from the other access plan materials described in §C of this regulation, provided the information described in §C(3), (4), and (12) of this regulation is submitted by a calendar day that shall be designated in a bulletin issued by the Commissioner at least 60 days prior to such filing date. The date by which the information described in §C(3), (4), and (12) of this regulation must be filed shall be set later in time than July 1 of the reporting year.

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.05 Travel Distance Standards.

A. Sufficiency Standards.

(1) Standard and Methodology.

(a) Except as stated in §B of this regulation, each provider panel of a carrier shall have within the geographic area served by the carrier’s network or networks, sufficient primary care providers, specialty providers, mental health and substance use disorder providers, hospitals, and health care facilities to meet the maximum travel distance standards listed in the chart in §A(5) of this regulation for each type of geographic area.

(b) The distances listed in §A(5) of this regulation shall be:

(i) Measured from the enrollee’s place of residence to the practicing location of the provider or facility; and

(ii) Calculated based on road travel distance.

(c) Except for those provider types excluded under §A(3) of this regulation, for each provider type and facility type included on the carrier’s provider panel, the carrier shall:

(i) Map the residences of all Maryland enrollees covered under health benefit plans that use the provider panel;

(ii) Calculate the road travel distance for each enrollee to the provider or facility with the closest practicing location;

(iii) For each zip code, identify the total number of enrollees residing in the zip code and the number of enrollees residing within an area where the applicable distance standard is not met;

(iv) For each zip code, calculate the percentage of enrollees residing within an area where the applicable distance standard is met;

(v) For each zip code that includes enrollees for whom the applicable travel distance standard is not met, calculate the average distance to the closest provider or facility for all enrollees residing in the zip code;

(vi) For each of the urban, rural, and suburban areas identify the total number of enrollees residing in the geographic area;

(vii) For each of the urban, rural, and suburban areas identify the total number of enrollees residing within an area where the applicable distance standard is not met; and

(viii) For each of the urban, rural, and suburban areas identify the percentage of enrollees residing within an area where the applicable distance standard is met.

(d) Instead of independently calculating the road travel distance for each enrollee as described in §A(1)(c)(i) and (ii) of this regulation, a carrier may use a methodology that:

(i) Maps the practicing locations of every participating provider within the geographic area served by the carrier’s network or networks;

(ii) Identifies any geographic areas within each Maryland zip code that fall outside of the applicable distance standard based on road travel distance from the provider locations; and

(iii) Enables the carrier to accurately identify the information and perform the calculations described in §A(1)(c)(iii)-(viii) of this regulation.

(e) A carrier shall submit, as part of its documentation justifying to the Commissioner how the access plan meets the network sufficiency standards in this regulation:

(i) Geo-access maps for each provider type and facility type except for those excluded under §A(3) of this regulation showing the practicing locations of participating providers, and identifying either the geographic areas within each zip code where the applicable distance standard is not met, or the locations of enrollees with a residence outside the applicable distance standard;

(ii) For any facility types listed in §A(5) of this regulation that provide services for substance use disorders, the percentage of facilities on the carrier’s provider panel that provide adolescent services; and

(iii) For any facility types listed in §A(5) of this regulation that provide services for substance use disorders, the percentage of facilities on the carrier’s provider panel that provide services for alcohol treatment only, drug abuse treatment only, and alcohol and drug abuse treatment.

(f) A carrier shall report each number and percentage described in §A(1)(c)(iii)—(viii) of this regulation as part of the annual access plan filing.

(2) When an enrollee elects to utilize a gynecologist, pediatrician, or certified registered nurse practitioner for primary care, a carrier may consider that utilization as a part of its meeting the primary care provider standards listed in §A(5) of this regulation.

(3) The travel distance standards listed in §A(5) of this regulation do not apply to the following:

(a) Home health care;

(b) Durable medical equipment;

(d) Heart or lung transplant programs;

(e) Kidney transplant programs;

(f) Liver transplant programs;

(g) Lung transplant programs; or

(h) Pancreas transplant programs.

(4) All other providers and facility types included on the carrier’s provider panel but not listed in the chart in §A(5) of this regulation, including physical therapists and licensed dietitian-nutritionist, shall individually be required to meet maximum distances standards of 15 miles for Urban Areas, 40 miles for Suburban Areas, and 90 miles for Rural Areas.

(5) Chart of Travel Distance Standards.

| | Urban Area Maximum Distance (miles) | Suburban Area Maximum Distance (miles) | Rural Area Maximum Distance (miles) | | --- | --- | --- | --- | | Provider Type: | | | | | Addiction Medicine | 10 | 25 | 60 | | Allergy and Immunology | 15 | 30 | 75 | | Applied Behavioral Analyst | 15 | 30 | 60 | | Cardiovascular Disease | 10 | 20 | 60 | | Chiropractic | 15 | 30 | 75 | | Dermatology | 10 | 30 | 60 | | Endocrinology | 15 | 40 | 90 | | ENT/Otolaryngology | 15 | 30 | 75 | | Gastroenterology | 10 | 30 | 60 | | General Surgery | 10 | 20 | 60 | | Gynecology, OB/GYN Nurse-Midwifery/Certified Midwifery | 5 | 10 | 30 | | Licensed Clinical Social Worker | 10 | 25 | 60 | | Licensed Professional Counselor | 10 | 25 | 60 | | Nephrology | 15 | 25 | 75 | | Neurology | 10 | 30 | 60 | | Oncology-Medical and Surgical | 10 | 20 | 60 | | Oncology-Radiation/Radiation Oncology | 15 | 40 | 90 | | Ophthalmology | 10 | 20 | 60 | | Pediatrics-Routine/Primary Care | 5 | 10 | 30 | | Physiatry, Rehabilitative Medicine | 15 | 30 | 75 | | Plastic Surgery | 15 | 40 | 90 | | Podiatry | 10 | 30 | 60 | | Primary Care (non-pediatric) | 5 | 10 | 30 | | Psychiatry-Adolescent and Child, Outpatient | 10 | 25 | 60 | | Psychiatry-Geriatric, Outpatient | 10 | 25 | 60 | | Psychiatry-Outpatient | 10 | 25 | 60 | | Psychology | 10 | 25 | 60 | | Pulmonology | 10 | 30 | 60 | | Rheumatology | 15 | 40 | 90 | | Urology | 10 | 30 | 60 | | All Other licensed or certified providers under contract with a carrier not listed | 15 | 40 | 90 | | Facility Type: | | | | | Acute Inpatient Hospitals | 10 | 30 | 60 | | Ambulatory Infusion Therapy Centers | 10 | 30 | 60 | | Critical Care Services — Intensive Care Units | 10 | 30 | 100 | | Diagnostic Radiology | 10 | 30 | 60 | | Inpatient Psychiatric Facility | 15 | 45 | 75 | | Opioid Treatment Services Provider | 15 | 25 | 60 | | Outpatient Dialysis | 10 | 30 | 50 | | Outpatient Mental Health Clinic | 15 | 30 | 60 | | Outpatient Substance Use Disorder Facility | 15 | 30 | 60 | | Pharmacy | 5 | 10 | 30 | | Residential Crisis Services | 10 | 30 | 60 | | Skilled Nursing Facilities | 10 | 30 | 60 | | Substance Use Disorder Residential Treatment Facility | 10 | 25 | 60 | | Surgical Services (Outpatient or Ambulatory Surgical Center) | 10 | 30 | 60 | | All other licensed or certified facilities under contract with a carrier not listed | 15 | 40 | 90 |

B. Group Model HMO Plans Sufficiency Standards.

(1) Standard and Methodology.

(a) Each group model HMO’s health benefit plan’s provider panel shall have within the geographic area served by the group model HMO’s network or networks, sufficient primary care providers, specialty providers, mental health and substance use disorder providers, hospitals, and health care facilities to meet the maximum travel distance standards listed in the chart in §B(5) of this regulation for each type geographic area.

(b) The distances listed in §B(5) of this regulation shall be:

(i) Measured from the enrollee’s place of residence or, at the option of the carrier, place of employment from which the enrollee gains eligibility for participation in the group model HMO’s health benefit plan to the practicing location of the provider or facility; and

(ii) Calculated based on road travel distance.

(c) Except for those provider types excluded §B(3) of this regulation, for each provider type and facility type included on the group model HMO’s provider panel, the carrier shall:

(i) Map the residences or places of employment of all Maryland enrollees covered under health benefit plans that use the provider panel;

(ii) Calculate the road travel distance for each enrollee to the provider or facility with the closest practicing location;

(iii) For each zip code identify the total number of enrollees with a residence or place of employment in the zip code and the number of enrollees with a residence or a place of employment within an area where the applicable distance standard is not met;

(iv) For each zip code calculate the percentage of enrollees with a residence or place of employment within an area where the applicable distance standard is met;

(vi) For each of the urban, rural, and suburban areas identify the total number of enrollees with a residence or place of employment in the geographic area;

(vii) For each of the urban, rural, and suburban areas identify the number of enrollees with a residence or place of employment within an area where the applicable distance standard is not met; and

(viii) For each of the urban, rural, and suburban areas identify the percentage of enrollees with a residence or place of employment within an area where the applicable distance standard is met.

(d) Instead of independently calculating the road travel distance for each enrollee as described in §B(1)(c)(i) and (ii) of this regulation, a carrier may use a methodology that:

(i) Maps the practicing locations of every participating provider within the geographic area served by the group model HMO’s network or networks;

(ii) Identifies any geographic areas within each Maryland zip code that fall outside of the applicable distance standard based on road travel distance from the provider locations; and

(iii) Enables the carrier to accurately identify the information and perform the calculations described in §B(1)(c)(iii)—(viii) of this regulation.

(e) When calculating the number or percentage of enrollees with a place of employment within an area or zip code under §B(1)(c)(iii)—(viii) of this regulation, the carrier shall include only those enrollees who gain eligibility for participation in the group model HMO’s health benefit plan from their place of employment.

(f) A carrier shall submit, as part of its documentation justifying to the Commissioner how the access plan meets the network sufficiency standards in this regulation:

(i) Geo-access maps for each provider type and facility type except for those excluded under §B(3) of this regulation showing the practicing locations of participating providers, and identifying either the geographic areas within each zip code where the applicable distance standard is not met, or the locations of enrollees with a residence or place of employment outside the applicable distance standard;

(ii) For any facility types listed in §B(5) of this regulation that provide services for substance use disorders, the percentage of facilities on the carrier’s provider panel that provide adolescent services; and

(iii) For any facility types listed in §B(5) of this regulation that provide services for substance use disorders, the percentage of facilities on the carrier’s provider panel that provide services for alcohol treatment only, drug abuse treatment only, and alcohol and drug abuse treatment.

(g) A carrier shall report each number and percentage described in §B(1)(c)(iii)—(viii) of this regulation as part of the annual access plan filing.

(3) The travel distance standards listed in §B(5) of this regulation do not apply to the following:

(a) Home health care;

(b) Durable medical equipment;

(d) Heart or lung transplant programs;

(e) Kidney transplant programs;

(f) Liver transplant programs;

(g) Lung transplant programs; or

(h) Pancreas transplant programs.

(4) All other provider and facility types included on the carrier’s provider panel, but not listed in the chart at §B(5) of this regulation, including physical therapists and licensed dietitian-nutritionist, shall individually be required to meet maximum distances standards of 20 miles for Urban Areas, 40 miles for Suburban Areas, and 90 miles for Rural Areas.

(5) Chart of Travel Distance Standards.

| | Urban Area Maximum Distance (miles) | Suburban Area Maximum Distance (miles) | Rural Area Maximum Distance (miles) | | --- | --- | --- | --- | | Provider Type: | | | | | Addiction Medicine | 15 | 30 | 75 | | Allergy and Immunology | 20 | 30 | 75 | | Applied Behavioral Analyst | 15 | 20 | 60 | | Cardiovascular Disease | 15 | 25 | 60 | | Chiropractic | 20 | 30 | 75 | | Dermatology | 20 | 30 | 60 | | Endocrinology | 20 | 40 | 90 | | ENT/Otolaryngology | 20 | 30 | 75 | | Gastroenterology | 20 | 30 | 60 | | General Surgery | 20 | 30 | 60 | | Gynecology, OB/GYN Nurse-Midwifery/Certified Midwifery | 15 | 20 | 45 | | Licensed Clinical Social Worker | 15 | 30 | 75 | | Licensed Professional Counselor | 15 | 30 | 75 | | Nephrology | 15 | 30 | 75 | | Neurology | 15 | 30 | 60 | | Oncology-Medical, Surgical | 15 | 30 | 60 | | Oncology-Radiation/Radiation Oncology | 15 | 40 | 90 | | Ophthalmology | 15 | 20 | 60 | | Pediatrics-Routine/Primary Care | 15 | 20 | 45 | | Physiatry, Rehabilitative Medicine | 15 | 30 | 75 | | Plastic Surgery | 15 | 40 | 90 | | Podiatry | 15 | 30 | 90 | | Primary Care (non-pediatric) | 15 | 20 | 45 | | Psychiatry-Adolescent and Child, Outpatient | 15 | 30 | 60 | | Psychiatry-Geriatric, Outpatient | 15 | 30 | 60 | | Psychiatry-Outpatient | 15 | 30 | 60 | | Psychology | 15 | 30 | 60 | | Pulmonology | 15 | 30 | 60 | | Rheumatology | 15 | 40 | 90 | | Urology | 15 | 30 | 60 | | All Other licensed or certified providers under contract with a carrier not listed | 20 | 40 | 90 | | Facility Type: | 15 | 30 | 60 | | Acute Inpatient Hospitals | 15 | 30 | 60 | | Ambulatory Infusion Therapy Center | 15 | 30 | 60 | | Critical Care Services-Intensive Care Units | 15 | 30 | 120 | | Diagnostic Radiology | 15 | 30 | 60 | | Inpatient Psychiatric Facility | 15 | 45 | 75 | | Opioid Treatment Services Provider | 15 | 30 | 60 | | Outpatient Dialysis | 15 | 30 | 60 | | Outpatient Mental Health Clinic | 15 | 30 | 60 | | Outpatient Substance Use Disorder Facility | 15 | 30 | 60 | | Pharmacy | 5 | 10 | 30 | | Residential Crisis Services | 15 | 30 | 60 | | Skilled Nursing Facilities | 15 | 30 | 60 | | Substance Use Disorder Residential Treatment Facility | 15 | 30 | 60 | | Surgical Services (Outpatient or Ambulatory Surgical Center) | 10 | 30 | 60 | | All other licensed or certified facilities under contract with a carrier not listed | 15 | 40 | 120 |

C. Essential Community Providers.

(1) Each provider panel of a carrier, that is not a group model HMO provider panel, shall include:

(a) At least 30 percent of the available essential community providers providing medical services in each of the urban, rural, and suburban areas;

(b) At least 30 percent of the available essential community providers providing mental health services in each of the urban, rural, and suburban areas; and

(c) At least 30 percent of the available essential community providers providing substance use disorder services in each of the urban, rural, and suburban areas.

(2) Methodology for calculating essential community provider inclusion standard.

(a) Except as provided in §§C(2)(b) and (c) of this regulation, a carrier shall use the MHBE ECP Network Inclusion Calculation Methodology that is described in the Instructions on Meeting the Essential Community Provider Plan Certification Standard guidance provided by the Maryland Health Benefit Exchange, which is current as of the date 3 months prior to the due date of the annual access plan.

(b) The calculation described in §C(2)(a) of this regulation shall be performed separately for essential community providers providing medical services, mental health services, and substance use disorder services in each of the urban, rural, and suburban areas.

(c) If the Maryland Health Benefit Exchange changes the MHBE ECP Network Inclusion Calculation Methodology after the effective date of this regulation, a carrier may not use the revised methodology to calculate the essential community provider inclusion standard in §C(1) of this regulation unless the Commissioner has approved the revised methodology for this purpose.

(3) Each group model HMO plan shall demonstrate that its own providers located in Health Professional Shortage Areas or low-income zip codes within its service area perform at or above the 50th percentile on the following two HEDIS measures:

(a) Initiation and Engagement of Alcohol and Other Drug Abuse or Dependence Treatment; and

(b) Utilization of the PHQ-9 to Monitor Depression Symptoms for Adolescents and Adults.

(4) Each group model HMO plan shall demonstrate that it has alternative standards for addressing the needs of low income, medically underserved individuals. One manner in which a group model HMO may demonstrate this is by providing the Maryland Insurance Administration with its narrative or alternate standard justification to the essential community provider requirement, which was submitted to and accepted by the Maryland Health Benefit Exchange for certification as a qualified health planstandards of practice as determined by the treating provider acting within the scope of the provider’s license, certification, or other authorization.

Cross References

31.10.44.04C(3)(d)(i)

31.10.44.04C(11)

31.10.44.04C(13)

31.10.44.04G

31.10.44.07C(2)(b)

31.10.44.08A(1)(a)

31.10.44.08A(1)(b)

31.10.44.08A(2)(b)

31.10.44.09A

31.10.44.09B

31.10.44.11A(1)(a)

31.10.44.11A(1)(b)

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.06 Appointment Waiting Time Standards.

A. Network Capacity.

(1) Each carrier shall create and utilize written policies and procedures to monitor the availability of services.

(2) On a semiannual basis, each carrier shall make available to its enrollees the median waiting times to obtain the following in-person appointments with a participating provider as measured from the date of the initial request to the date of the earliest available in-person appointment:

(a) Urgent care for medical services;

(b) Inpatient urgent care for mental health services;

(d) Outpatient urgent care for mental health services;

(e) Outpatient urgent care for substance use disorder services;

(f) Routine primary care;

(g) Preventive care/well visits;

(h) Non-urgent specialty care;

(i) Non-urgent mental health care; and

(j) Non-urgent substance use disorder care.

(3) To calculate the median waiting times for the appointments described in §A(2) of this regulation, a carrier shall:

(a) Make direct contact with a random selection of provider offices qualified to provide the services for each of the appointment types listed in §A(2) of this regulation to ask for next available in-person appointments; and

(b) Retain documentation of the efforts described in §A(3)(a) of this regulation.

(4) The minimum sample size for the random selection of provider offices described in §A(3)(a) of this regulation shall be equivalent to the lesser of:

(a) Fifty percent of the participating providers qualified to provide the services for each of the appointment types listed in §A(2) of this regulation; or

(b) One hundred provider offices.

(5) The Commissioner may conduct a centralized survey to measure waiting time, by carrier, for each appointment type listed in §A(2) of this regulation.

(a) The survey described in §A(5) of this regulation shall utilize a statistically reliable and valid methodology that includes making direct contact with a random selection of participating providers for each carrier who are qualified to provide the services for each of the appointment types listed in §A(2) of this regulation to ask for next available appointments.

(b) The Commissioner may:

(i) Contract with a vendor to conduct the survey; and

(ii) Charge a carrier a reasonable fee to cover the costs of the survey.

(c) The Commissioner shall publish the methodology used to conduct the survey on the Maryland Insurance Administration’s website.

(d) For any semiannual period in which the Commissioner conducts the survey described in §A(5) of this regulation:

(i) The Commissioner shall provide notice to each carrier subject to this chapter of the intent to conduct the survey at least 3 months in advance;

(ii) The Commissioner may require each carrier to submit a current roster of network providers for each provider panel used by the carrier, and any additional information the Commissioner determines is necessary for the survey to be conducted; and

(iii) A carrier is exempt from the requirement to make direct contact with a random selection of provider offices to calculate the median waiting times as described in §A(3) of this regulation.

B. Sufficiency Standards.

(1) On a semiannual basis, a carrier shall determine whether the provider panel meets the waiting time standards listed in §E of this regulation based on the direct contacts with provider offices described in §A(3)(a) of this regulation or the survey described in §A(5) of this regulation.

(2) Subject to the exceptions in §§C and D of this regulation, if a carrier’s provider panel fails to meet the waiting time standards listed in §E of this regulation for at least 90 percent of appointments in each category, the carrier shall notify the Administration within 10 business days identifying the deficiency in the provider network and the efforts that have been taken or will be taken to correct the deficiency.

C. Preventive care services and periodic follow-up care, including but not limited to, standing referrals to specialty providers for chronic conditions, periodic office visits to monitor and treat pregnancy, cardiac or mental health or substance use disorder conditions, and laboratory and radiological monitoring for recurrence of disease, may be scheduled in advance consistent with professionally recognized standards of practice as determined by the treating provider acting within the scope of the provider’s license, certification, or other authorization.

D. A visit scheduled in advance in accordance with §C of this regulation may be disregarded when determining compliance with the waiting time standards listed in §E of this regulation.

E. Chart of Waiting Time Standards.

| Waiting Time Standards | | | --- | --- | | Urgent care for medical services | 72 hours | | Inpatient urgent care for mental health services | 72 hours | | Inpatient urgent care for substance use disorder services | 72 hours | | Outpatient urgent care for mental health services | 72 hours | | Outpatient urgent care for substance use disorder services | 72 hours | | Routine primary care | 15 calendar days | | Preventive care/well visit | 30 calendar days | | Non-urgent specialty care | 30 calendar days | | Non-urgent mental health care | 10 calendar days | | Non-urgent substance use disorder care | 10 calendar days |

Cross References

31.10.44.08C(1)

31.10.44.08D(2)(e)(i)

31.10.44.11A(2)(a)

31.10.44.11A(2)(b)

31.10.44.11A(2)(c)

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.07 Provider-to-Enrollee Ratio Standards.

A. Except for a Group Model HMOs health benefit plan, the provider panel for each carrier shall meet the provider-to-enrollee ratio standards listed in §B of this regulation.

B. The provider-to-enrollee ratios shall be equivalent to at least 1 full-time physician, or as appropriate, another full-time provider for:

(1) 1,200 enrollees for primary care;

(2) 2,000 enrollees for pediatric care;

(3) 2,000 enrollees for obstetrical/gynecological care;

(4) 2,000 enrollees for mental health care or services; and

(5) 2,000 enrollees for substance use disorder care or services.

C. The ratios described in §B of this regulation shall be calculated based on:

(1) The number of enrollees covered under all health benefit plans issued by the carrier in Maryland that use that provider panel; and

(2) The number of providers in that provider panel with practicing locations:

(a) In Maryland; or

(b) Within the applicable maximum travel distance standard specified in Regulation .05 of this chapter outside the geographic boundaries of Maryland.

Cross References

31.10.44.04C(13)

31.10.44.09A

31.10.44.09B

31.10.44.11A(3)(b)

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.08 Telehealth.

A. Telehealth Utilization Data Reporting.

(1) For annual access plans submitted on or after July 1, 2024, a carrier shall report the following data on telehealth utilization for the calendar year prior to submission of the annual access plan:

(a) The total number of in-network telehealth claims for each provider type and facility type listed in Regulation .05 of this chapter in each of the urban, rural, and suburban areas and in each Maryland county and Baltimore City; and

(b) The percentage of total in-network claims for each provider type and facility type listed in Regulation .05 of this chapter in each of the urban, rural, and suburban areas and in each Maryland county and Baltimore City that are in-network telehealth claims.

(2) The geographic area for claims data described in §A(1) of this regulation shall be based on:

(a) The enrollee’s place of residence; or

(b) When an enrollee’s place of employment is used instead of residence to calculate travel distance under Regulation .05B of this chapter for a group model HMO, place of employment from which the enrollee gains eligibility for participation in the health benefit plan.

B. Travel Distance Credit.

(1) Subject to approval by the Commissioner as described in §B(5) of this regulation, when calculating the enrollee travel distance for each provider type under Regulation .05A and B of this chapter, a carrier may apply a per-enrollee telehealth mileage credit in a geographic area where the applicable maximum travel distance standard is not met as measured between the practicing location of the nearest provider and the enrollee’s place of residence or, at the option of a group model HMO, place of employment from which the enrollee gains eligibility for participation in the health benefit plan.

(2) The telehealth mileage credit described in §B(1) of this regulation shall be:

(a) Five miles for an enrollee with a residence or, for a group model HMO, place of employment from which the enrollee gains eligibility for participation in the health benefit plan, in an urban geographic area;

(b) Ten miles for an enrollee with a residence or, for a group model HMO, place of employment from which the enrollee gains eligibility for participation in the health benefit plan, in a suburban geographic area; and

(c) Fifteen miles for an enrollee with a residence or, for a group model HMO, place of employment from which the enrollee gains eligibility for participation in the health benefit plan, in a rural geographic area.

(3) The telehealth mileage credit described in §B(1) of this regulation may be applied to a maximum of 10 percent of enrollees for each provider type in each of the urban, rural, or suburban geographic areas.

(4) A carrier seeking to apply the telehealth mileage credit described in §B(1) of this regulation shall identify:

(a) Each provider type and geographic area to which the credit is being applied;

(b) The percentage of enrollees for which the carrier met the travel distance standard for the provider type and geographic area before the credit was applied; and

(c) The percentage of enrollees for which the carrier met the travel distance standard for the provider type and geographic area after the credit was applied.

(5) The Commissioner may approve the telehealth mileage credit described in §B(1) of this regulation if the carrier sufficiently demonstrates that it provides coverage for and access to clinically appropriate telehealth services from participating providers for the provider type and geographic area to which the credit is being applied, in accordance with the documentation requirements of §D of this regulation.

C. Appointment Waiting Time Credit.

(1) Subject to approval by the Commissioner as described in §C(3) of this regulation, when determining whether the carrier’s provider panel meets the waiting time standards under Regulation .06E of this chapter for at least 90 percent of appointments in each category, a carrier may apply a telehealth credit of up to 10 percentage points for each appointment category where the standard is not met.

(2) A carrier seeking to apply the telehealth credit described in §C(1) of this regulation shall identify:

(a) Each appointment type to which the credit is being applied;

(b) The percentage of appointments for which the carrier met the waiting time standard before the credit was applied; and

(3) The Commissioner may approve the telehealth credit described in §C(1) of this regulation if a carrier sufficiently demonstrates, in accordance with the documentation requirements of §D of this regulation, that:

(a) The carrier provides coverage for and access to clinically appropriate telehealth services from participating providers for the appointment type to which the credit is being applied;

(b) The carrier provides coverage for a corresponding in-person service if the enrollee chooses not to elect utilization of a telehealth service; and

(c) The carrier establishes, maintains, and adheres to written policies and procedures to assist enrollees for whom a telehealth service is not clinically appropriate, not available, or not accessible with obtaining timely access to an in-person appointment within a reasonable travel distance with:

(i) A participating provider; or

(ii) A nonparticipating provider at no greater cost to the enrollee than if the service was obtained from a participating provider.

D. Required Documentation.

(1) A carrier seeking to apply the telehealth credit described in §B(1) or C(1) of the regulation shall submit the following documentation to demonstrate that it provides coverage for and access to clinically appropriate telehealth services as described in §§B(5) and C(3)(a) of this regulation:

(a) A description of any requirements imposed or incentives provided for participating providers to offer telehealth services;

(b) A detailed description of all telehealth services offered under the health benefit plans issued by the carrier in Maryland that use the provider panel including:

(i) Telehealth modalities covered;

(ii) Types of platforms through which participating providers may deliver telehealth;

(iii) Whether the carrier offers or provides services through a telehealth-only vendor or platform, and which types of services are provided on this basis;

(iv) Whether the carrier arranges for telehealth services to be available on a 24/7 basis, and which types of services are provided on this basis;

(v) Whether the carrier arranges for telehealth kiosks to be installed and maintained in convenient locations throughout Maryland; and

(vi) The specific services available through telehealth for each provider type and appointment type to which the telehealth credit is being applied;

(c) Evidence that telehealth is clinically appropriate and available for the services performed by each provider type and for each appointment type to which the telehealth credit is being applied, which may include:

(i) Actual telehealth utilization data comparing telehealth claims for the specific provider type or appointment type to telehealth claims for all provider types or appointment types;

(ii) Actual telehealth utilization data comparing telehealth claims for the specific provider type or appointment type to all claims for the same provider type or appointment type;

(iii) Survey results or attestations from participating providers indicating that telehealth is offered for the services performed by the specific provider type or for the specific appointment type;

(iv) Enrollee survey results indicating that enrollees have the willingness and ability to use telehealth services for the specific provider type or appointment type; and

(v) Other documentation that, in the discretion of the Commissioner, demonstrates the clinical appropriateness and availability of telehealth services for the provider type or appointment type to which the credit is being applied; and

(d) For the telehealth mileage credit described in §B(1) of this regulation, evidence that telehealth services in general are available and accessible in the zip codes where the telehealth mileage credit is being applied to enrollee’s residence or place of employment, which may include:

(i) Actual telehealth utilization data comparing the ratio of telehealth claims to in-person claims for all types of services on the aggregate in the geographic area of the zip codes where the credit is being applied to the ratio of telehealth claims to in-person claims for all types of services on the aggregate statewide;

(ii) Enrollee survey results indicating that enrollees have the willingness and ability to use telehealth services in general in the geographic area where the credit is being applied; and

(iii) Other documentation that, in the discretion of the Commissioner, demonstrates the availability and accessibility of telehealth services in the zip codes where the credit is being applied.

(2) A carrier seeking to apply the telehealth credit described in §C(1) of the regulation shall submit the following documentation to demonstrate that it provides coverage for a corresponding in-person service and that it establishes, maintains, and adheres to written policies and procedures to assist enrollees with obtaining timely access to an in-person appointment as described in §C(3)(b)—(c) of this regulation:

(a) Excerpts from actual plan materials describing benefits for telehealth and in-person services;

(b) Copies of the actual written policies and procedures;

(c) A description of any information, outreach, and educational materials the carrier provides to enrollees informing them of the assistance available from the carrier to assist with obtaining a timely appointment;

(d) A description of whether the carrier provides assistance on a 24/7 basis to guide enrollees needing urgent care after normal business hours to an appropriate provider, including assistance provided through a customer service telephone option or a contracted telehealth triage service; and

(e) Evidence that the carrier ensures, in practice, that enrollees are able to obtain timely access to an in-person appointment as described in §C(3)(c) of this regulation, which may include:

(i) Documentation of the number of enrollees the carrier assisted with getting appointments within the applicable waiting time standard under Regulation .06E of this chapter;

(ii) Documentation of the number of appointments with a nonparticipating provider for the appointment type to which the credit is being applied where the enrollee received services at no greater cost than if the service was obtained from a participating provider;

(iii) Enrollee survey results indicating satisfaction with the carrier’s efforts to provide assistance with obtaining a timely in-person appointment; and

(iv) Other documentation that, in the discretion of the Commissioner, demonstrates that the carrier regularly assists enrollees in obtaining timely in-person appointments.

Cross References

31.10.44.04C(12)

31.10.44.11A(1)(c)

31.10.44.11A(2)(b)

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.09 Waiver Request Standards.

A. If a carrier’s provider panel fails to meet one or more of the standards specified in Regulations .05—.07 of this chapter, the carrier shall provide the following information to the Commissioner as part of the annual access plan:

(1) A description of any network adequacy waiver previously granted by the Commissioner;

(2) An explanation of how many providers in each specialty or health care facility type that the carrier reasonably estimates it would need to contract with or otherwise include in its network to satisfy each unmet standard;

(3) A description of the methodology used to calculate the estimated number of providers in §A(2) of this regulation;

(4) A list of physicians, other providers, or health care facilities related to each unmet standard and within the relevant service area that the carrier attempted to contract with, identified by name and specialty, if any, or health care facility type;

(5) A description of how and when the carrier last contacted the physicians, other providers, or health care facilities;

(6) A description of any reason each physician, other provider, or health care facility gave for refusing to contract with the carrier;

(7) An analysis of any trends in the reasons given by physicians, providers, or health care facilities for refusing to contract with the carrier, and a description of the carrier’s proposals or attempts to address those reasons and improve future contracting efforts;

(8) Identification of all incentives the carrier offers to providers to join the network;

(9) If applicable, a substantiated statement that there are insufficient numbers of physicians, other providers, or health care facilities available within the relevant service area for a covered service or services for which the carrier failed to meet a standard;

(10) A description of other efforts and initiatives undertaken by the carrier in the past year to enhance its network and address the deficiencies that contributed to each unmet standard;

(11) A description of steps the carrier will take to attempt to improve its network to avoid a future failure to meet a standard;

(12) An explanation of any other mitigating factors that the carrier requests the Commissioner to consider; and

(13) An attestation to the accuracy of the information provided in relation to each unmet standard.

B. The Commissioner may find good cause to grant a network adequacy waiver of one or more of the standards specified in Regulations .05—.07 of this chapter, if the information provided by the carrier under §A of this regulation demonstrates that:

(1) The physicians, other providers, or health care facilities necessary for an adequate network:

(a) Are not available to contract with the carrier;

(b) Are not available in sufficient numbers;

(d) Are unable to reach agreement with the carrier.

(2) The reported failure to meet a standard is a result of limitations or constraints with the measurement methodology rather than an actual deficiency in the network.

C. The Commissioner shall post a list of all network adequacy waivers that are granted for each annual access plan on the Maryland Insurance Administration’s website.

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.10 Confidential Information in Access Plans.

A. Subject to Insurance Article, §15-802, Annotated Code of Maryland, the following information that is included in a carrier’s access plan shall be considered confidential by the Commissioner:

(1) Proprietary methodology used to annually assess the carrier’s performance in meeting the standards established under this chapter;

(2) Proprietary methodology used to annually measure timely access to health care services; and

(3) Factors used by the carrier to build its network.

B. A carrier submitting an access plan or supplemental information required for the network adequacy waiver standards may submit a written request to the Commissioner that specific information included in the plan not be disclosed under the Public Information Act and shall:

(1) Identify the particular information that the carrier requests not be disclosed; and

(2) Cite the statutory authority that permits denial of access to the information.

C. The Commissioner may review a request made under §B of this regulation upon receipt of a request for access pursuant to the Public Information Act.

D. The Commissioner may notify the carrier that made a request under §B of this regulation before granting access to information that was the subject of the request.

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

COMAR 31.10.44.11 Network Adequacy Access Plan Executive Summary Form.

A. For each provider panel used by a carrier for a health benefit plan, the carrier shall provide the following network sufficiency results for the health benefit plan service area in the standardized format described on the Maryland Insurance Administration’s website:

(1) Travel Distance Standards.

(a) For each provider type and facility type listed in Regulation .05 of this chapter, list the percentage of enrollees for which the carrier met the travel distance standards, in the following format, with provider types listed first in alphabetical order, followed by facility types in alphabetical order:

| | Urban Area | Suburban Area | Rural Area | | --- | --- | --- | --- | | Provider Type | | | | | Facility Type | | | |

(b) All provider and facility types described in §§A(4) and B(4) of Regulation .05 of this chapter and included on the carrier’s provider panel shall be listed individually in the chart described in §A(1)(a) of this regulation with the corresponding data for that specific type of provider or facility.

(c) If the telehealth mileage credit described Regulation .08B of this chapter was applied when calculating the percentage of enrollees for which the carrier met the travel distance standards, the carrier shall:

(i) Note the particular provider types and geographic areas to which the credit was applied by including an asterisk in the chart; and

(ii) Include a corresponding footnote stating “As permitted by Maryland regulations, a telehealth mileage credit was applied to up to 10 percent of enrollees for each provider type noted with an asterisk in each of the urban, rural, or suburban geographic areas. The mileage credit is 5 miles for urban areas, 10 miles for suburban areas, and 15 miles for rural areas.”

(d) List the total number of certified registered nurse practitioners counted as a primary care provider.

(e) List the total percentage of primary care providers who are certified registered nurse practitioners.

(f) List the total number of essential community providers in the carrier’s network in each of the urban, rural, and suburban areas providing:

(i) Medical services;

(ii) Mental health services; and

(iii) Substance use disorder services.

(g) List the total percentage of essential community providers available in the health benefit plan’s service area that are participating providers for each of the nine categories described in §A(1)(f) of this regulation.

(h) List the total number and percentage of local health departments in the carrier’s network providing:

(i) Medical services;

(ii) Mental health services; and

(iii) Substance use disorder services.

(2) Appointment Waiting Time Standards.

(a) For each appointment type listed in Regulation .06 of this chapter, list the calculated median waiting time to obtain an in-person appointment with a participating provider, in the following format:

| Appointment Waiting Time Standard Results | | | --- | --- | | Urgent care for medical services | | | Inpatient urgent care for mental health services | | | Inpatient urgent care for substance use disorder services | | | Outpatient urgent care for mental health services | | | Outpatient urgent care for substance use disorder services | | | Routine primary care | | | Preventive care/Well Visit | | | Non-urgent specialty care | | | Non-urgent mental health care | | | Non-urgent substance use disorder care | |

(b) If the telehealth credit described Regulation .08C of this chapter was applied when determining whether the carrier’s provider panel met the waiting time standards under Regulation .06E of this chapter for at least 90 percent of appointments in any category, the carrier may include a statement on the executive summary disclosing the availability of telehealth appointments to supplement the in-person appointments for that category.

(c) If the carrier arranges for telehealth services to be provided from participating providers beyond traditional office hours for an appointment type listed in Regulation .06 of this chapter, the carrier may include a statement on the executive summary disclosing the availability of those services.

(3) Provider-to-Enrollee Ratio Standards.

(a) This subsection does not apply to Group Model HMO health benefit plans.

(b) For all other carriers, summarize the network performance for each provider-to-enrollee ratio standard listed in Regulation .07 of this chapter by listing the calculated number of providers in the provider panel, rounded to the nearest whole number, for each of the following categories of enrollees:

(i) 1,200 enrollees for primary care;

(ii) 2,000 enrollees for pediatric care;

(iii) 2,000 enrollees for obstetrical/gynecological care;

(iv) 2,000 enrollees for mental health care or service; and

(v) 2,000 enrollees for substance use disorder care and services.

B. The network adequacy access plan executive summary form filed by a carrier pursuant to §A of this regulation is not confidential information.

Cross References

31.10.44.04C(1)

History

Administrative History: Effective date: December 31, 2017 (44:25 Md. R. 1180)
Administrative History: ——————
Administrative History: Chapter revised effective May 15, 2023 (50:9 Md. R. 379)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(a)—(d), Annotated Code of Maryland

31.10.45 Dental Network Adequacy

COMAR 31.10.45.01 Scope.

This chapter applies to carriers that issue or renew dental plans in Maryland and use a provider panel for a dental plan offered in Maryland.

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

COMAR 31.10.45.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer authorized to sell dental insurance;

(b) A nonprofit health service plan that provides coverage for dental services; or

(2) “Dental plan” means a contractual arrangement for dental services.

(3) “Dental network adequacy waiver request” means a written request from a carrier to the Commissioner in which the carrier seeks the Commissioner’s approval to be relieved of certain dental network adequacy standards in this chapter for 1 year.

(4) “Dental service” has the meaning stated in Insurance Article, §14-401, Annotated Code of Maryland.

(5) “Dentist” has the meaning stated in Health Occupations Article §4-101, Annotated Code of Maryland.

(6) “Enrollee” means a person entitled to dental benefits from a carrier.

(7) Essential Community Provider.

(a) “Essential community provider” means a provider that serves predominantly low-income or dentally underserved individuals.

(b) “Essential community provider” includes local health departments.

(8) Network.

(a) “Network” means a carrier’s participating providers with which a carrier contracts to provide dental services to the carrier’s enrollees under the carrier’s dental plan.

(b) “Network” includes, if a carrier uses a provider panel developed by a subcontracting entity, providers that contract with the subcontracting entity to provide dental services to the carrier’s enrollees under the carrier’s dental plan.

(9) “Participating provider” means a provider on a carrier’s provider panel.

(10) “Provider” means:

(a) A dentist;

(b) A group of dentists; or

(11) Provider Panel.

(a) “Provider panel” means the providers who participate in a carrier’s network.

(b) “Provider panel” does not include an arrangement in which any provider may participate solely by contracting with the carrier to provide dental services at a discounted fee-for-service rate.

(12) “Rural area” means a list of zip codes provided on the Maryland Insurance Administration’s website, with a human population of less than 1,000 per square mile according to the Maryland Department of Planning.

(13) “Specialty provider” means a dentist who focuses on a specific area of dental care for a group of patients and is identified as a specialist by the Maryland State Board of Dental Examiners.

(14) “Suburban area” means a list of zip codes provided on the Maryland Insurance Administration’s website, with a human population equal to or more than 1,000 per square mile, but less than 3,000 per square mile according to the Maryland Department of Planning.

(15) Telehealth.

(a) “Telehealth” means, as it relates to the delivery of dental services, the use of interactive audio, video, or other telecommunications or electronic technology by a provider to deliver a dental service within the scope of practice of the provider at a location other than the location of the patient.

(b) “Telehealth” does not include:

(i) An audio-only telephone conversation between a provider and a patient;

(ii) An electronic mail message between a provider and a patient; or

(iii) A facsimile transmission between a provider and a patient.

(16) “Urban area” means a list of zip codes provided on the Maryland Insurance Administration’s website, with a human population equal to or greater than 3,000 per square mile according to the Maryland Department of Planning.

(17) “Urgent care” means the treatment for a condition of an enrollee that satisfies either of the following:

(a) A dental condition that, in the absence of dental services within 72 hours, could reasonably be expected by an individual, acting on behalf of a carrier and applying the judgment of a prudent layperson who possesses an average knowledge of health and medicine, would result in:

(i) Placing the enrollee’s life or dental health in serious jeopardy;

(ii) The inability of the enrollee to regain maximum dental function;

(iii) Serious impairment to the enrollee’s dental function; or

(iv) Serious dysfunction of any bodily organ or part of the enrollee; or

(b) A dental condition of an enrollee that, in the absence of dental services or treatment within 72 hours, would, in the opinion of a provider with knowledge of the enrollee’s condition, subject the enrollee to severe pain that cannot be adequately managed without the care or treatment.

(18) “Waiting time” means the time from the initial request for dental services by an enrollee or by the enrollee’s treating provider to the earliest date offered for the appointment for services.

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

COMAR 31.10.45.03 Travel Distance Standards.

A. Sufficiency Standards.

(1) Using the zip code list on the Maryland Insurance Administration’s website, each provider panel of a carrier shall have within the geographic area served by the carrier’s network or networks, sufficient dentists, including specialty providers, and facilities to meet the maximum travel distance standards listed in the chart under §A(2) of this regulation for each type of geographic area measured from the enrollee’s place of residence.

(2) Chart of Travel Distance Standards.

| | Urban Area Maximum Distance (miles) | Suburban Area Maximum Distance (miles) | Rural Area Maximum Distance (miles) | | --- | --- | --- | --- | | Provider type: | | | | | General dentist | 15 | 30 | 60 | | Endodontic | 30 | 45 | 75 | | Orthodontics and dentofacial orthopedics | 30 | 45 | 75 | | Oral and maxillofacial pathology | 30 | 45 | 75 | | Oral and maxillofacial radiology | 30 | 45 | 75 | | Oral and maxillofacial surgery | 30 | 45 | 75 | | Pediatric dentistry | 30 | 45 | 75 | | Periodontic | 30 | 45 | 75 | | Prosthodontics | 30 | 45 | 75 |

B. Each provider panel of a carrier shall include at least 20 percent of the available essential community providers who provide dental services in each of the urban, rural, and suburban areas.

Cross References

31.10.45.06A(1)(a)

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

COMAR 31.10.45.04 Appointment Waiting Time Standards.

A. Sufficiency Standards.

(1) Subject to §B of this regulation, each carrier’s provider panel shall meet the waiting time standards listed in §C of this regulation for at least 95 percent of the enrollees covered under dental plans that use that provider panel.

(2) When it is clinically appropriate and an enrollee elects to utilize a telehealth appointment, a carrier may consider that utilization as a part of its meeting the standards listed in §C of this regulation.

B. Preventive care services and periodic follow-up care may be scheduled in advance consistent with professionally recognized dental standards of practice as determined by the treating provider acting within the scope of the provider’s license.

C. Chart of Waiting Time Standards.

| First Available Appointment Waiting Time Standards | | | --- | --- | | Urgent care | 3 calendar days | | Routine dental services | 45 calendar days | | Non-urgent specialty care | 60 calendar days |

Cross References

31.10.45.06A(2)(a)

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

COMAR 31.10.45.05 Waiver Request Standards.

A. A carrier may apply for a dental network adequacy waiver, for up to 1 year, of a dental network adequacy requirement listed in this chapter.

B. The Commissioner may find good cause to grant the dental network adequacy waiver request only if the carrier demonstrates that the providers necessary for an adequate network:

(1) Are not available to contract with the carrier;

(2) Are not available in sufficient numbers;

(3) Have refused to contract with the carrier; or

(4) Are unable to reach agreement with the carrier.

C. A carrier seeking a dental network adequacy waiver shall submit a written request to the Commissioner that includes the following information:

(1) A description of any waiver previously granted by the Commissioner;

(2) A list of providers within the relevant service area that the carrier attempted to contract with, identified by name and specialty, if any, or facility type;

(3) A description of how and when the carrier last contacted the providers;

(4) A description of any reason each provider gave for refusing to contract with the carrier;

(5) Steps the carrier will take to attempt to improve its network to avoid future dental network adequacy waiver requests;

(6) If applicable, a statement that there are no providers available within the relevant service area for a covered service or services for which the carrier requests the waiver; and

(7) An attestation to the accuracy of the information contained in the dental network adequacy waiver request.

D. A carrier submitting a dental network adequacy waiver request may submit a written request to the Commissioner that specific information included in the plan or request not be disclosed under the Public Information Act and shall:

(1) Identify the particular information that the carrier requests not be disclosed; and

(2) Cite the statutory authority that permits denial of access to the information.

E. The Commissioner may review a request made under §D of this regulation upon receipt of a request for access pursuant to the Public Information Act.

F. The Commissioner may notify the carrier that made a request under §D of this regulation before granting access to information that was the subject of the request.

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

COMAR 31.10.45.06 Dental Network Adequacy Executive Summary Form.

A. For each provider panel used by a carrier for a dental plan, the carrier shall provide the network sufficiency results for the dental plan service area as follows:

(1) Travel Distance Standards.

(a) For each provider type listed in Regulation .03 of this chapter, list the percentage of enrollees for which the carrier met the travel distance standards, in the following format:

| | Urban Area | Suburban Area | Rural Area | | --- | --- | --- | --- | | General dentist | | | | | Specialty provider | | | |

(b) List the total number of essential community providers in the carrier’s network.

(c) List the total percentage of essential community providers available in the dental benefit plan’s service area that are participating providers.

(2) Appointment Waiting Time Standards.

(a) For each appointment type listed in Regulation .04 of this chapter, list the percentage of enrollees in which the carrier met the appointment waiting time standards, in the following format:

| Appointment Waiting Time Standard Results | | | --- | --- | | Urgent care — within 3 calendar days | | | Routine dental services — within 45 calendar days | | | Nonurgent specialty care — within 60 calendar days | |

(b) List the total percentage of telehealth appointments counted as part of the appointment waiting time standard results.

B. Each carrier shall provide a description of how it will monitor, on an ongoing basis, the ability of participating providers to provide covered services to the carrier’s enrollees.

C. The dental network adequacy access plan executive summary form filed by a carrier pursuant to §A of this regulation is not confidential information.

History

Administrative History: Effective date: Effective December 31, 2017 (44:25 Md. R. 1184)
Authority: Insurance Article, §§2-109(a)(1) and 15-112(e), Annotated Code of Maryland

31.10.46 Pharmacy Benefits Managers — Maximum Allowable Cost

COMAR 31.10.46.01 Scope.

This chapter applies to all maximum allowable cost pricing claims made to a pharmacy benefits manager for a multisource generic prescription drug, medical product, or device, provided to a beneficiary of a purchaser.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.1, and 15-1642, Annotated Code of Maryland

COMAR 31.10.46.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Appeal decision” means a written or electronic notice issued by a PBM in response to an appeal filed by a contracted pharmacy of the maximum allowable cost used to adjudicate a claim.

(2) “Beneficiary” means an individual who receives prescription drug coverage or benefits from a purchaser.

(3) “Carrier” has the meaning stated in Insurance Article §15-1601, Annotated Code of Maryland.

(4) “Compensation program” has the meaning stated in Insurance Article §15-1601, Annotated Code of Maryland.

(5) “Contracted pharmacy” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(6) “MAC complaint” means a communication by a contracted pharmacy that disputes the appeal decision, and is submitted on a MAC complaint form to the Commissioner, after the pharmacy benefits manager’s internal appeal process has been exhausted as required by Insurance Article, §15-1628.1(f), Annotated Code of Maryland.

(7) “MAC complaint form” means the form adopted by the Commissioner under Regulation .05 of this chapter.

(8) “MAC list” means a list of multisource generic drugs, medical products, and devices for which a MAC has been established by a pharmacy benefits manager or a purchaser.

(9) “Maximum allowable cost” or “MAC” has the meaning stated in Insurance Article, §15-1628.1, Annotated Code of Maryland.

(10) “Multisource generic drug” means a generic drug as defined in Health-General Article, §21-2C-01(f), Annotated Code of Maryland, for which there is at least one other drug and does not include a brand name drug as that term is defined in Health Occupations, §12-504, Annotated Code of Maryland.

(11) “Participating pharmacy contract” means a contract filed with the Commissioner that is:

(a) Between a pharmacy and a:

(i) Pharmacy benefits manager;

(ii) Pharmacy services administrative organization; or

(iii) Group purchasing organization;

(b) Filed as required by the Commissioner;

(d) In compliance with the requirements stated in this chapter.

(12) “Pharmacist” has the meaning stated in Health Occupations Article, §12–101, Annotated Code of Maryland.

(13) “Pharmacy” has the meaning stated in Health Occupations Article, §12–101, Annotated Code of Maryland.

(14) “Pharmacy benefits management services” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(15) “Pharmacy benefits manager” or “PBM” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(16) “Pharmacy services administration organization” or “PSAO” means an entity that provides a contracted pharmacy with contracting administrative services relating to prescription drug benefits.

(17) “Pricing information” means anything used in the mathematical calculation to determine the payment to a contracted pharmacy.

(18) “Purchaser” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(19) “Source” means the publisher or publishers stated in the participating pharmacy contract, used by the PBM, in any manner, to establish the basis of the PBM’s MAC reimbursement amount to a contracted pharmacy, under a participating pharmacy contract compensation program.

(20) “Working day” means any day that the Maryland Insurance Administration is open for business.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.1, and 15-1642, Annotated Code of Maryland

COMAR 31.10.46.03 Disclosures to a Contracted Pharmacy.

A. A PBM, whether its contract is directly with a pharmacy or indirectly with a pharmacy through a PSAO or group purchasing organization, shall disclose to a contracted pharmacy at the time of entering into a contract with a pharmacy and at least 30 working days before any contract change for a contracted pharmacy:

(1) The applicable terms, conditions, and reimbursement rates, including:

(a) The sources; and

(b) The terms of the compensation program;

(2) The process and procedures for verifying pharmacy benefits and beneficiary eligibility;

(3) The dispute resolution, internal appeal process under Regulation .04 of this chapter, and audit appeals process; and

(4) The process and procedures for verifying the prescription drugs included on the formularies used by the PBM.

B. A PBM, whether its contract is directly with a pharmacy or indirectly with a pharmacy through a PSAO or group purchasing organization, shall:

(1) Update its pricing information at least every 7 days;

(2) Establish a reasonable process by which a contracted pharmacy has access to the current and applicable MAC lists and price list in an electronic format as updated in accordance with the requirements of this section; and

(3) Immediately after a pricing information update occurs pursuant to this regulation, use the updated pricing information in calculating the payments made to all contracted pharmacies.

C. A claim paid on behalf of a carrier to a contracted pharmacy under a participating pharmacy contract is subject to the requirements of Insurance Article, §§15-1005, 15-1008, 15-1009, and 15-1631, Annotated Code of Maryland.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.1, and 15-1642, Annotated Code of Maryland

COMAR 31.10.46.04 Internal Appeal Procedures.

A. Each PBM subject to this chapter shall establish written procedures to investigate and resolve disputes filed by a contracted pharmacy.

B. The internal appeal procedures established by the PBM shall:

(1) Be in writing; and

(2) Contain administrative processes and safeguards designed to ensure and verify that the MAC pricing was determined in accordance with the participating pharmacy contract and Maryland law, and that the contract provisions have not been applied in an arbitrary or capricious manner.

C. The procedures established by the PBM may not require:

(1) More than one appeal before filing a complaint with the Commissioner; or

(2) The payment of a fee to file an appeal.

D. The internal appeal procedures established by the PBM shall be provided to the Commissioner on request.

Cross References

31.10.46.03A(3)

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.1, and 15-1642, Annotated Code of Maryland

COMAR 31.10.46.05 MAC Complaint Process.

A. Prior to filing a MAC complaint with the Commissioner, a contracted pharmacy or its designee shall exhaust the internal appeal process established in the participating pharmacy contract and used by the PBM to appeal, investigate, and resolve a dispute regarding the MAC claim amount.

B. A contracted pharmacy or its designee may file a MAC complaint with the Commissioner to dispute a PBM’s appeal decision for the following reasons:

(1) The PBM’s MAC pricing did not meet the requirements of Insurance Article, Title 15, Subtitle 16, Annotated Code of Maryland, related to MAC pricing; or

(2) The PBM’s MAC pricing did not meet the applicable terms of the applicable participating pharmacy contract.

C. A MAC complaint is properly completed and may be filed if a contracted pharmacy or designee:

(1) Completes all applicable portions of the Commissioner’s MAC complaint form;

(2) Provides a copy of the relevant contract or the provisions that are related to the MAC appeal, including but not limited to:

(a) MAC;

(b) MAC pricing;

(d) Pricing information; and

(e) The compensation program of the applicable participating pharmacy contract; and

(3) Provides a copy of the appeal decision.

D. A MAC complaint may not include more than ten appeal decisions using a single MAC complaint form.

E. Notification of the MAC Complaint to the PBM.

(1) Upon receipt of a completed MAC complaint form, the Commissioner shall provide a copy of the submitted MAC complaint form to the PBM.

(2) Within 5 working days of receiving the Commissioner’s notice, the PBM shall provide the Commissioner:

(a) A complete, unredacted copy of the applicable portion of the participating pharmacy contract relating to the compensation program and the complaint filed with the Commissioner, including any other contract under which the pricing information is determined;

(b) A copy of the applicable source and pricing information used to calculate the MAC;

(d) A mathematical calculation that demonstrates how the reimbursement amount was determined;

(e) All information required to complete the response portion of the MAC complaint form; and

(f) Any other information the Commissioner may require for the purposes of determining a PBM’s compliance with:

(i) Insurance Article, Annotated Code of Maryland;

(ii) This chapter;

(iii) The compensation program; or

(iv) The applicable terms of the applicable participating pharmacy contract.

Cross References

31.10.46.02B(7)

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.1, and 15-1642, Annotated Code of Maryland

31.10.47 Cost Pricing and Reimbursement Other than MAC

COMAR 31.10.47.01 Scope.

This chapter applies to all cost pricing and reimbursement disputes or a request to review the failure to pay the contractual reimbursement amount of a submitted claim made to a pharmacy benefits manager by a pharmacist or pharmacy for a prescription drug, medical product, or device, provided to a beneficiary of a purchaser.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.2, 15-1630, and 15-1642, Annotated Code of Maryland

COMAR 31.10.47.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Appeal decision” means a written or electronic notice in response to an appeal under this chapter provided to a contracted pharmacy that includes a reason for the appeal denial.

(2) “Beneficiary” means an individual who receives prescription drug coverage or benefits from a purchaser.

(3) “Carrier” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(4) “Compensation program” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(5) “Complaint” means a communication by a contracted pharmacy that disputes the appeal decision, and is submitted on a complaint form to the Commissioner, after the pharmacy benefits manager’s internal appeal process has been exhausted as required by Insurance Article, §15-1628.2, Annotated Code of Maryland.

(6) “Complaint form” means the form developed by the Commissioner under Regulation .05 of this chapter.

(7) “Contracted pharmacy” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(8) “Direct or indirect remuneration fee” means an adjustment in total compensation received directly or indirectly by a contracted pharmacy from a PBM that is determined after the sale of the product or service, including an adjustment of an adjudicated claim based on the use of a generic effective rate or fee or performance-based reimbursement.

(9) “Participating pharmacy contract” means a contract filed with the Commissioner that is:

(a) Between a pharmacy and a:

(i) Pharmacy benefits manager;

(ii) Pharmacy services administrative organization; or

(iii) Group purchasing organization;

(b) Filed as required by the Commissioner;

(d) In compliance with the requirements stated in this chapter.

(10) “Pharmacist” has the meaning stated in Health Occupations Article, §12–101, Annotated Code of Maryland.

(11) “Pharmacy” has the meaning stated in Health Occupations Article, §12–101, Annotated Code of Maryland.

(12) “Pharmacy benefits management services” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(13) “Pharmacy benefits manager” or “PBM” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(14) “Pharmacy services administration organization” or “PSAO” means an entity that provides a contracted pharmacy with contracting administrative services relating to prescription drug benefits.

(15) “Pricing information” means anything used in the mathematical calculation to determine the payment to a contracted pharmacy.

(16) “Purchaser” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(17) Review Decision.

(a) “Review decision” means a written or electronic notice in response to a request from a contracted pharmacy for a review of a failure to pay the contractual reimbursement amount of a submitted claim.

(b) “Review decision” does not include an appeal decision.

(18) “Source” means the publisher or publishers stated in the participating pharmacy contract, used by the PBM, in any manner, to establish the basis of the PBM’s pricing or the reimbursement amount to a contracted pharmacy, under a participating pharmacy contract’s stated compensation program.

(19) “Working day” means any day that the Maryland Insurance Administration is open for business.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.2, 15-1630, and 15-1642, Annotated Code of Maryland

COMAR 31.10.47.03 Disclosures to a Contracted Pharmacy.

(1) The applicable terms, conditions, and reimbursement rates, including:

(a) The sources; and

(b) The terms of the compensation program;

(2) The process and procedures for verifying pharmacy benefits and beneficiary eligibility;

(3) The dispute resolution, internal appeal process under Regulation .04 of this chapter, and audit appeals process; and

(4) The process and procedures for verifying the prescription drugs included on the formularies used by the PBM.

B. A claim paid on behalf of a carrier to a contracted pharmacy under a participating pharmacy contract is subject to the requirements of Insurance Article, §§15-1005, 15-1008, 15-1009, and 15-1631, Annotated Code of Maryland.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.2, 15-1630, and 15-1642, Annotated Code of Maryland

COMAR 31.10.47.04 Internal Appeal Procedures.

A. Each PBM subject to this chapter shall establish written procedures to investigate and resolve disputes filed by a contracted pharmacy.

B. The internal appeal procedures established by the PBM shall:

(1) Be in writing; and

(2) Contain administrative processes and safeguards designed to ensure and verify that the pricing was determined in accordance with the participating pharmacy contract and Maryland law, and that the contract provisions have not been applied in an arbitrary or capricious manner.

C. The procedures established by the PBM may not require:

(1) More than one appeal before filing a complaint with the Commissioner; or

(2) The payment of a fee to file an appeal.

D. The internal appeal procedures established by the PBM shall be provided to the Commissioner on request.

E. The internal procedures established by the PBM shall:

(1) Provide written notice of the PBM’s decision no later than 90 days after receipt of the appeal or review;

(2) Pay any money due within 30 days after the internal review is complete; and

(3) Provide a contracted pharmacy:

(a) 21 days to file an appeal after the contracted pharmacy is charged a direct or indirect remuneration fee; or

(b) A minimum of 180 days to request review of the reimbursement amount of a submitted claim.

Cross References

31.10.47.03A(3)

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.2, 15-1630, and 15-1642, Annotated Code of Maryland

COMAR 31.10.47.05 Complaint Process.

A. Prior to filing a complaint with the Commissioner, a contracted pharmacy or its designee shall exhaust the internal appeal process established in the participating pharmacy contract.

B. A contracted pharmacy or its designee may file a complaint with the Commissioner to dispute a PBM’s appeal decision for the following reasons:

(1) The PBM’s cost pricing did not comply with Insurance Article, Title 15, Subtitle 16, Annotated Code of Maryland; or

(2) The PBM’s cost pricing or reimbursement amount determination did not meet the terms of the applicable participating pharmacy contract.

C. A complaint is properly completed and may be filed if a contracted pharmacy or its designee:

(1) Completes all applicable portions of the Commissioner’s complaint form;

(2) Provides a copy of the relevant contract or the provisions that are related to the appeal, including but not limited to establishing a drug pricing or pharmacy reimbursement amount, sources, pricing information, and the compensation program of the applicable participating pharmacy contract; and

(3) Provides a copy of the appeal decision.

D. A complaint may not include more than ten appeal decisions using a single complaint form.

E. Notification of the Complaint to the PBM.

(1) Upon receipt of a completed complaint form, the Commissioner shall provide a copy of the submitted complaint form to the PBM.

(2) Within 5 working days of receiving the Commissioner’s notice, the PBM shall provide the Commissioner:

(b) A copy of the applicable source and pricing information used to calculate the pharmacy reimbursement amount;

(d) All information required to complete the response portion of the complaint form; and

(e) Any other information the Commissioner may require for the purposes of determining a PBM’s compliance with:

(i) Insurance Article, Annotated Code of Maryland;

(ii) This chapter;

(iii) The compensation program; or

(iv) The applicable terms of the participating pharmacy contract.

Cross References

31.10.47.02B(6)

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§15-1601, 15-1604, 15-1605, 15-1607, 15-1609, 15-1628, 15-1628.2, 15-1630, and 15-1642, Annotated Code of Maryland

COMAR 31.10.48.01 Applicability and Scope.

This chapter applies to the submission of any participating pharmacy contract or amendment required to be filed under Insurance Article, Title 15, Subtitle 16, Annotated Code of Maryland.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .04A amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .05A amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§2-109, 12-203(d)(2), 15-1628, and 15-1642, Annotated Code of Maryland

COMAR 31.10.48.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Commissioner” means the Maryland Insurance Commissioner.

(3) “Noncompliant” means a contract or amendment that is not in compliance with Maryland statutes and regulations.

(4) “Participating pharmacy contract” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(5) “Working day” means any day that the Maryland Insurance Administration is open for business.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .04A amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .05A amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§2-109, 12-203(d)(2), 15-1628, and 15-1642, Annotated Code of Maryland

COMAR 31.10.48.03 Submission Requirements.

A. Pursuant to the requirements of Insurance Article, §15-1628(b), Annotated Code of Maryland, a PBM shall submit to the Commissioner as an informational filing each participating pharmacy contract form and each amendment to a contract form at least 30 days before the contract form or amendment to the contract form is to become effective.

B. The Commissioner is not required to review the informational filing to evaluate whether a contract form or amendment to a contract form is in violation of Maryland law at the time the informational filing is made.

C. Unless it is disapproved by the Commissioner, a PBM may use a contract form or amendment to a contract form after it has been filed with the Commissioner and 30 days have passed since the filing was acknowledged by the Commissioner in writing as having been received.

D. A PBM may not file a contract form or amendment form that has been previously disapproved by the Commissioner.

E. Nothing in this regulation shortens the time period for notice under Insurance Article, §15-1628(a), Annotated Code of Maryland, which requires a PBM to provide at least 30 working days’ notice before any contract change.

F. The filing shall include a cover letter which includes the following:

(1) A list of the contract forms and amendment forms included in the submission; and

(2) A brief description of the purpose of each contract form and amendment form included in the submission.

G. Each page of a contract or amendment shall be identified by a form number which is unique to that form. This number shall be printed in the lower left-hand corner of the first page, and no other number shall appear in close proximity to the form number.

H. A filing made under this chapter shall include a signed certification from a responsible officer of the PBM that, to the best of the officer’s knowledge and belief, the contract forms and amendment forms comply with applicable statutes and regulations.

I. A PBM may not file a contract form or amendment form before the PBM has successfully registered as a PBM with the Commissioner.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .04A amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .05A amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§2-109, 12-203(d)(2), 15-1628, and 15-1642, Annotated Code of Maryland

COMAR 31.10.48.04 Noncompliant Contract Terms.

A. A PBM may have a contract form or amendment to a contract form disapproved at any time after the contract form or amendment to a contract form has been submitted as part of an informational filing if the contract form or amendment form contains or uses any language that:

(1) Violates Insurance Article, Title 15, Subtitle 16, Annotated Code of Maryland, or any applicable statutory provisions, including but not limited to Insurance Article, §§15-112, 15-112.2(a)—(e), 15-123(d), 15-1004, 15-1005, 15-1008(c), 15-1009, 15-1628—15-1628.3, 15-1629, 15-1631, and 15-1633—15-1639, and Health-General Article, §§19-710(s) and (t) and 19-712.2, Annotated Code of Maryland;

(2) Does not disclose the components of the compensation program through which a reimbursement rate is set;

(3) Includes a definition of “multisource generic drug” that is inconsistent with COMAR 31.10.46, or “generic” or “brand name drug” that is inconsistent with Health Occupations Article, §12-504, Annotated Code of Maryland;

(4) Allows the PBM to reimburse a covered drug in an amount that differs, including zero, based on the identity of the wholesale distributor used by a contracting pharmacy for acquisition of the covered drug;

(5) Except for instances of error or fraud, allows the PBM to reclassify, recategorize, or recharacterize an adjudicated claim;

(6) In any way prohibits or restricts a pharmacist or pharmacy from filing a complaint with the Commissioner; or

(7) Fails to include the internal appeal provisions in the contract.

B. No provisions in Insurance Article, Annotated Code of Maryland, or this chapter may be waived or modified by contract.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .04A amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .05A amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§2-109, 12-203(d)(2), 15-1628, and 15-1642, Annotated Code of Maryland

COMAR 31.10.48.05 Use of Noncompliant Contract or Amendment.

A. If a PBM uses a contract form or amendment form which becomes effective and the contract form or amendment form is subsequently found by the Commissioner to be noncompliant, the Commissioner may:

(1) Issue an order that:

(a) Gives notice of the disapproval;

(b) States a reason for the disapproval; and

(2) Impose a penalty as provided under Insurance Article, §15-1642, Annotated Code of Maryland.

B. An order under this regulation is subject to a hearing under Insurance Article, §2-210, Annotated Code of Maryland.

C. A request for a hearing under this regulation does not stay that portion of the order that requires a PBM to cease and desist from the conduct identified in the order.

History

Administrative History: Effective date: Effective March 23, 2020 (47:6 Md. R. 343)
Administrative History: Regulation .02B amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .03 amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .04A amended effective February 7, 2022 (49:3 Md. R. 141)
Administrative History: Regulation .05A amended effective February 7, 2022 (49:3 Md. R. 141)
Authority: Insurance Article, §§2-109, 12-203(d)(2), 15-1628, and 15-1642, Annotated Code of Maryland

31.10.49 Pharmacy Services Administrative Organizations

COMAR 31.10.49.01 Scope.

This chapter applies to all contractual agreements between a pharmacy services administrative organization and an independent pharmacy in which a pharmacy services administrative organization negotiates on behalf of an independent pharmacy with purchasers or pharmacy benefit managers for prescription drug coverage or benefits, medical devices, or biologics provided to a beneficiary of a purchaser.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§15-2001—15-2019, Annotated Code of Maryland

COMAR 31.10.49.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Appeal decision” means a written or electronic notice in response to an appeal under this chapter provided to a contracted pharmacy that includes a reason for the appeal denial.

(2) “Contracted pharmacy” means an independent pharmacy in a pharmacy services administrative contract.

(3) “Delivered by electronic means” includes:

(a) Delivery to an electronic mail address at which an independent pharmacy or contracted pharmacy has consented to receive notice; and

(b) Posting on an electronic network, together with separate notice to an independent pharmacy or contracted pharmacy directed to the electronic mail address at which the independent pharmacy or contracted pharmacy has consented to receive notice of the posting.

(4) “Independent pharmacy” has the meaning stated in Insurance Article, §15-2001(b), Annotated Code of Maryland.

(5) “Material change” means a change in control or business operations of a pharmacy services administrative organization after a purchase, merger, or acquisition of a parent company, subsidiary, or other organization.

(6) Medical Device.

(a) “Medical device” means a device used in the diagnosis, treatment, or prevention of disease.

(b) “Medical device” does not include:

(i) Any surgical or dental instrument;

(ii) Physical therapy equipment;

(iii) Any x-ray apparatus; or

(iv) Any component or accessory of any of these items.

(7) “Pharmacy benefits manager (PBM)” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(8) “Pharmacy services administrative contract” has the meaning stated in Insurance Article, §15-2001(d), Annotated Code of Maryland.

(9) “Pharmacy services administrative organization” or “PSAO” has the meaning stated in Insurance Article, §15-2001(e), Annotated Code of Maryland.

(10) “Purchaser” has the meaning stated in Insurance Article, §15-2001(f), Annotated Code of Maryland.

(11) “Working days” means any day that the Maryland Insurance Administration is open for business.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§15-2001—15-2019, Annotated Code of Maryland

COMAR 31.10.49.03 Disclosures to an Independent Pharmacy.

A. A PSAO shall provide to a contracted pharmacy an electronic or paper copy of any contracts, amendments, payment schedules, or reimbursement rates within 5 working days after the execution of a contract, or an amendment to a contract, signed on behalf of the contracted pharmacy by the PSAO.

B. A PSAO shall provide written notice to an independent pharmacy of any ownership interest or control by a parent company, subsidiary, or other organization before entering into a pharmacy services administrative contract with the independent pharmacy.

C. A PSAO shall disclose to a contracted pharmacy in writing within 5 working days of any material change of ownership or control or a parent company, subsidiary, or other organization.

D. The written disclosures required in §§B and C of this regulation shall identify the extent of any ownership interest or control, to include the percent of shares owned, by a parent company, subsidiary, or other organization that:

(1) Provides pharmacy services, prescription drug, or device services; or

(2) Manufactures, sells, or distributes prescription drugs, biologics, or medical devices.

E. The written disclosures required in §§B and C of this regulation may be delivered by electronic means provided:

(1) The independent pharmacy or contracted pharmacy has affirmatively consented to that method of delivery and has not withdrawn the consent;

(2) The independent pharmacy or contracted pharmacy, before giving consent, is provided with a clear and conspicuous statement informing the pharmacy of:

(a) Any right or option of the pharmacy to have the notice provided or made available in paper or another nonelectronic form;

(b) The right of the pharmacy to withdraw consent to have notice delivered by electronic means and any fees, conditions, or consequences imposed in the event consent is withdrawn;

(i) Only to notices or communications related to a particular transaction; or

(ii) To identified categories of notices that may be delivered by electronic means during the course of the parties’ relationship; and

(d) The procedures the pharmacy must use to withdraw consent to have notice delivered by electronic means and to update information needed to contact the party electronically;

(3) The independent pharmacy or contracted pharmacy, before giving consent, is provided with a statement of the hardware and software requirements for access to and retention of a notice delivered by electronic means; and

(4) The process used to obtain consent of the independent pharmacy or contracted pharmacy to have notice delivered by electronic means meets the requirements of Commercial Law Article, Title 21, Subtitle 1, Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§15-2001—15-2019, Annotated Code of Maryland

COMAR 31.10.49.04 Internal Appeal Procedures.

A. Each PSAO subject to this chapter shall establish written procedures to investigate and resolve disputes filed against the PSAO by a contracted pharmacy.

B. The internal appeal procedures shall:

(1) Be in writing; and

(2) Contain administrative processes and safeguards designed to ensure and verify that a PSAO remits payment to a contracted pharmacy in accordance with the pharmacy services administrative contract and Maryland law, and that the contract provisions have not been applied in an arbitrary or capricious manner.

C. The procedures established by the PSAO may not require:

(1) More than one appeal before filing a complaint with the Commissioner; or

(2) The payment of a fee to file an appeal.

D. The internal appeal procedures established by the PSAO shall be provided to the Commissioner on request.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§15-2001—15-2019, Annotated Code of Maryland

COMAR 31.10.49.05 Compliant Process.

A. Prior to filing a complaint with the Commissioner, a contracted pharmacy or its designee shall exhaust the internal appeal process established by the PSAO.

B. A complaint is properly completed and may be filed if a contracted pharmacy or designee for the pharmacy:

(1) Completes all applicable portions of the Commissioner’s complaint form; and

(2) Provides a copy of the relevant contract or the provisions that are related to the internal dispute, including but not limited to any applicable remittance and copy of any appeal decision.

C. Notification of the complaint to the PSAO.

(1) Upon receipt of a completed complaint form, the Commissioner shall provide a copy to the PSAO.

(2) Within 15 working days of receiving the Commissioner’s notice, the PSAO shall provide the Commissioner with:

(a) A complete, unredacted copy of the applicable portion of the pharmacy services administrative contract relating to the complaint filed with the Commissioner, including any other contract applicable to the complaint; and

(b) Any other information the Commissioner may require for the purposes of determining a PSAO’s compliance with:

(i) The Insurance Article, Annotated Code of Maryland;

(ii) This chapter; or

(iii) The applicable terms of the applicable pharmacy services administrative contract, PBM contract, or applicable purchaser’s contract.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§15-2001—15-2019, Annotated Code of Maryland

31.10.50 Filing of PSAO Contracts and Amendments

COMAR 31.10.50.01 Applicability and Scope.

This chapter applies to the submission of a pharmacy services administrative contract or an amendment to a pharmacy services administrative contract required to be filed under Insurance Article, Title 15, Subtitle 20, Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§2-109, 15-2010, 15-2011, 15-2013, 15-2015, and 15-2016, Annotated Code of Maryland

COMAR 31.10.50.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Commissioner” means the Maryland Insurance Commissioner.

(2) “Contracted pharmacy” means an independent pharmacy in a contract with a pharmacy services administrative organization.

(3) “Independent pharmacy” has the meaning stated in Insurance Article, §15-2001(b), Annotated Code of Maryland.

(4) “Noncompliant” means a contract or amendment that is not in compliance with Maryland statutes and regulations.

(5) “Pharmacy benefits manager (PBM)” has the meaning stated in Insurance Article, §15-1601, Annotated Code of Maryland.

(6) “Pharmacy services administrative contract” has the meaning stated in Insurance Article, §15-2001(d), Annotated Code of Maryland.

(7) “Pharmacy services administrative organization” or “PSAO” has the meaning stated in Insurance Article, §15-2001(e), Annotated Code of Maryland.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§2-109, 15-2010, 15-2011, 15-2013, 15-2015, and 15-2016, Annotated Code of Maryland

COMAR 31.10.50.03 Submission Requirements.

A. Pursuant to the requirements of Insurance Article, §15-2010, Annotated Code of Maryland, and except as provided in §E of this regulation, a PSAO shall submit to the Commissioner all pharmacy services administrative contract forms and amendments to pharmacy services administrative contract forms.

B. Unless it is disapproved by the Commissioner, and except as provided in §E of this regulation, a PSAO may not use a contract form or amendment to a contract form unless it has been filed with the Commissioner and:

(1) 60 days have passed since the filing was acknowledged by the Commissioner in writing as having been received; or

(2) Subject to the filing corrections under §C of this regulation, a PSAO receives written notice from the Commissioner that the contract form or amendment to a contract form may be used in Maryland.

C. A PSAO that receives written notice from the Commissioner that its contract form or amendment to a contract form contains defects and is disapproved, may re-submit the disapproved forms indicating the corrections made.

D. Except for the circumstances in §C of this regulation, a PSAO may not file a contract form or amendment form that has been previously disapproved by the Commissioner.

E. Amendments to Contracts.

(1) A PSAO that amends any of the following provisions of a previously filed contract shall file the amendment form with the Commissioner:

(a) Any provision dealing with prohibitions on certain communications between a pharmacy or pharmacist and a beneficiary, as described in Insurance Article, §15-1611, Annotated Code of Maryland;

(b) Any provision dealing with the responsibility of a PBM to disclose specified information to a pharmacy, as described in Insurance Article, §15-1628, Annotated Code of Maryland;

(c) Any provision dealing with fees for credentialing a pharmacy or pharmacist to participate in the network of a PBM or purchaser or the frequency of credentialing renewals, as described in Insurance Article, §15-1628, Annotated Code of Maryland;

(d) Any provision describing the sources used to determine maximum allowable cost pricing, the process for updating pricing information, or the process to appeal, investigate, and resolve disputes regarding maximum allowable cost pricing, as described in Insurance Article, §15-1628.1, Annotated Code of Maryland;

(e) Any provision describing the process to appeal, investigate, and resolve disputes regarding cost pricing and reimbursement, as described in Insurance Article, §15-1628.2, Annotated Code of Maryland;

(f) Any provision dealing with a pharmacy being charged or held responsible for a fee or performance-based reimbursement related to the adjudication of a claim or an incentive program or being subject to a reduction in payment due to a reconciliation process, as described in Insurance Article, §15-1628.3, Annotated Code of Maryland;

(g) Any provision describing the process to audit pharmacies, as described in Insurance Article, §15-1629, Annotated Code of Maryland;

(h) Any provision dealing with retroactive denials or modifications of reimbursement to a pharmacy or pharmacist, as described in Insurance Article, §15-1631, Annotated Code of Maryland;

(i) Any provision dealing with therapeutic interchanges, as described in Insurance Article, §§15-1633, 15-1634, 15-1635, 15-1636, and 15-1637, Annotated Code of Maryland;

(j) Any provision dealing with the PSAO providing copies of contracts, amendments, payment schedules, or reimbursement rates to a pharmacy, as described in Insurance Article, §15-2011, Annotated Code of Maryland;

(k) Any provision dealing with notification to a pharmacy of a material change in ownership or control of certain organizations affiliated with the PSAO, as described in Insurance Article, §15-2013, Annotated Code of Maryland;

(l) Any provision dealing with the PSAO passing claims remittances from a PBM or purchaser to a pharmacy, as described in Insurance Article, §15-2015, Annotated Code of Maryland;

(m) Any provision describing an arrangement for a pharmacy to purchase drugs, biologics, or medical devices from an entity under common ownership with the PSAO, as described in Insurance Article, §15-2016, Annotated Code of Maryland;

(n) Any provision dealing with the applicability of Maryland law; or

(o) Any provision of the contract that is revised to comply with Maryland law.

(2) An amendment to a previously filed contract form that does not amend a provision described in §E(1) of this regulation is not required to be filed with the Commissioner.

F. A filing made under this chapter shall include a cover letter which includes the following:

(1) A list of the contract forms and amendment forms included in the submission; and

(2) A brief description of the purpose of each contract form and amendment form included in the submission.

G. Each page of a contract or amendment shall be identified by a form number which is unique to that form. This number shall be printed in the lower left-hand corner of each page, and no other number shall appear in close proximity to the form number.

H. A filing made under this chapter shall include a signed certification from a responsible officer of the PSAO that, to the best of the officer’s knowledge and belief, the contract forms and amendment forms comply with applicable statutes and regulations.

I. A PSAO may not file a contract form or amendment form before the PSAO has successfully registered as a PSAO with the Commissioner.

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§2-109, 15-2010, 15-2011, 15-2013, 15-2015, and 15-2016, Annotated Code of Maryland

COMAR 31.10.50.04 Noncompliant Contract Terms.

A. A PSAO may have a contract form or amendment to a contract form disapproved if the contract or amendment contains or uses any language that:

(1) Violates Title 15, Subtitle 16 or Subtitle 20 of the Insurance Article, Annotated Code of Maryland or any applicable statutory provisions, including but not limited to Insurance Article, §§15-1611, 15-1628, 15-1628.1, 15-1628.2, 15-1628.3, 15-1629, 15-1631, 15-1633, 15-1634—15-1639, 15-2011, 15-2013(c), 15-2015, and 15-2016, Annotated Code of Maryland;

(2) Includes a definition of “multisource generic drug” that is inconsistent with COMAR 31.46, or “generic” or “brand name drug” that is inconsistent with Health Occupations Article, §12-504, Annotated Code of Maryland;

(3) Allows the PBM to reimburse a covered drug in an amount that differs, including zero, based on the identity of the wholesale distributor used by a contracting pharmacy for acquisition of the covered drug;

(4) Except for instances of error or fraud, allows a PBM or PSAO to re-classify, re-categorize, or re-characterize an adjudicated claim;

(5) In any way prohibits or restricts a pharmacist or pharmacy from filing a complaint with the Commissioner; and

(6) Fails to include the internal appeal provisions in the contract.

B. No provisions

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§2-109, 15-2010, 15-2011, 15-2013, 15-2015, and 15-2016, Annotated Code of Maryland

COMAR 31.10.50.05 Use of Noncompliant Contract or Amendment.

A. If a PSAO uses a contract or amendment that becomes effective and the contract or amendment is subsequently found by the Commissioner to be noncompliant, the Commissioner may:

(1) Issue an order that:

(a) Gives notice of the disapproval;

(b) States a reason for the disapproval; and

(2) Impose a civil penalty as provided under Insurance Article, §15-2019, Annotated Code of Maryland.

B. An order under this regulation is subject to a hearing under Insurance Article, §2-210, Annotated Code of Maryland.

C. A request for a hearing under this regulation does not stay that portion of the order that requires a PSAO to cease and desist from the conduct identified in the order

History

Administrative History: Effective date: December 26, 2022 (49:26 Md. R. 1081)
Authority: Insurance Article, §§2-109, 15-2010, 15-2011, 15-2013, 15-2015, and 15-2016, Annotated Code of Maryland

COMAR 31.10.51.01 Purpose.

The purpose of this chapter is to adopt regulations to implement Insurance Article, §15-144, Annotated Code of Maryland, to ensure uniform definitions and methodology for the reporting requirements established under this chapter.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.02 Scope.

This chapter applies to carriers that deliver or issue for delivery a health benefit plan in Maryland.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.03 Definitions.

A. In this chapter, the following terms have the meaning indicated.

B. Terms Defined.

(1) “Analysis report” means the report required by Insurance Article, §15-144(c)(2), Annotated Code of Maryland.

(2) “As written” means the written policies, procedures, and related documents, including medical necessity criteria or guidelines, used in the development and description of a NQTL and the decision whether to apply a NQTL to a particular benefit by the carrier or any entity delegated by the carrier to manage mental health, substance use disorder, or medical/surgical benefits on behalf of the carrier.

(3) “Evidentiary standards” has the meaning stated in 45 C.F.R. §146.136(a).

(4) “Factor” has the meaning stated in 45 C.F.R. §146.136(a).

(5) “In operation” means as used in the implementation and application of NQTLs, including the administration of benefits.

(6) “Medical/surgical benefits” has the meaning stated in Insurance Article, §15-144(a)(4), Annotated Code of Maryland, and may be abbreviated as “med/surg benefits” or “M/S benefits”.

(7) “Medical Necessity” means medical necessity as determined by the definition, criteria, or guidelines used by the carrier or its private review agent to determine what is necessary, efficient, or appropriate for purposes of coverage of a service or benefit. Insurance Article, §15-802, Annotated Code of Maryland, requires use of the criteria published by the American Society of Addiction Medicine for the evaluation of the medical necessity, efficiency, or appropriateness of services to treat a substance use disorder.

(8) “Mental health benefits” has the meaning stated in Insurance Article, §15-144(a)(5), Annotated Code of Maryland.

(9) “MH/SUD” means mental health benefits and substance use disorder benefits as a combined category.

(10) “NQTL” means a nonquantitative treatment limitation as defined in Insurance Article, §15-144(a)(6), Annotated Code of Maryland.

(11) “Parity Act” has the meaning stated in Insurance Article, §15-144(a)(7), Annotated Code of Maryland.

(12) “Parity Act classification” has the meaning stated in Insurance Article, §15-144(a)(8), Annotated Code of Maryland.

(13) “Process” has the meaning stated in 45 C.F.R. §146.136(a).

(14) “Product” has the meaning stated in Insurance Article, §15-1309(a)(3), Annotated Code of Maryland.

(15) “Provider” means:

(a) A physician;

(b) Hospital;

(d) Practitioner; or

(e) Other person who is licensed or otherwise authorized to provide healthcare services.

(16) “Source” means the data, analyses, recommendation, requirement, meeting, or other information upon which a factor is based or from which a factor is derived or arises.

(17) “Strategy” has the meaning stated in 45 C.F.R. §146.136(a).

(18) “Substance use disorder benefits” has the meaning stated in Insurance Article, §15-144(a)(9), Annotated Code of Maryland.

(19) “Summary form” means the form required by Insurance Article, §15-144(g)(5), Annotated Code of Maryland.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.04 Filing of Nonquantitative Treatment Limitation Comparative Analysis Report.

A. For each product offered by the carrier in the individual, small, and large group markets, a carrier that delivers or issues for delivery a health benefit plan in the State shall file a comparative analysis for each nonquantitative treatment limitation selected by the Commissioner in accordance with Insurance Article, §15-144 (c)(5), Annotated Code of Maryland, in the form required by the Commissioner, to demonstrate the carrier’s compliance with the Parity Act, in accordance with Insurance Article, §15-144(c)—(e), and (g), Annotated Code of Maryland. An analysis report shall be filed with the Commissioner using only the form developed by the Commissioner and posted on the Administration’s website.

B. If, for any plan within a product described in §A of this regulation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the selected NQTLs to MH/SUD benefits and M/S benefits are different, as written or in operation, from the other plans within the product, the carrier shall submit a separate comparative analysis for the selected NQTLs for the plan, and the statement required by Insurance Article, §15-144(c)(3)(iii) shall note the exception and identify the plan.

C. A carrier shall submit the data templates described in Insurance Article, §15-144(f), Annotated Code of Maryland, in the form required by the Commissioner.

D. The analysis reports described in §§A—C of this regulation shall be submitted on or before July 1, 2024, and every 2 years thereafter.

E. Carriers shall prepare the analysis report in coordination with any entity the carrier contracts with to provide, manage, or administer MH/SUD benefits.

F. Carriers shall follow the instructions posted on the Administration's website to complete the analysis report.

G. A complete analysis report shall include responses to each section of the standardized form, as described in the instructions posted on the Administration's website.

H. Each analysis report shall contain the statements required by Insurance Article, §15-144(c)(3)(iii) and (g)(4), Annotated Code of Maryland.

I. Failure to file a complete analysis report shall constitute noncompliance with the Parity Act and the Commissioner will have authority to act in accordance with the provisions of Insurance Article, §15-144 (j), Annotated Code of Maryland.

J. Complete Analysis Report.

(1) The analysis required by Insurance Article, §15-144(d), Annotated Code of Maryland, shall have been performed for NQTLs in place during the calendar year preceding the analysis report.

(2) A carrier shall analyze each NQTL separately for each classification and sub-classification, as applicable, of benefits.

(3) If the carrier delegates administration or management of mental health, substance use disorder, or medical/surgical benefits to another entity (for example, a private review agent specializing in mental health and substance use disorder benefits or a pharmacy benefits manager), the analyses shall be conducted with close and coordinated involvement of both the carrier and the entity delegated by the carrier to manage mental health, substance use disorder, or medical/surgical benefits on behalf of the carrier. The carrier is responsible for providing all required information for the analyses, regardless of any delegation arrangement with a subcontracted entity.

(4) The analysis reports shall include the following information to be considered complete:

(a) All of the information identified in Insurance Article, §15-144(d)-(f), Annotated Code of Maryland, in the manner and format specified in the standard reporting form and associated instructions provided on the Administration’s website;

(b) A response to each step listed in the reporting form, for each NQTL selected in accordance with Insurance Article, §15-144 (c)(5), Annotated Code of Maryland in each classification and sub-classification, as applicable. If a particular item in a step is not applicable (for example, if none of the factors used to determine that the NQTL will apply to a benefit was given more weight than another), an explanation shall be provided as to why the item is not applicable;

(c) A statement as to whether there is any variation in the design or application of a guideline or standard used by the carrier between MH/SUD and medical/surgical benefits, and, if so, a description of the factors and process used for establishing that variation. Specific definitions of factors, processes, or criteria used to establish or support any variation is required. Any practice guidelines that may be associated with the NQTL shall also be provided;

(d) If the design or application of the NQTL turns on specific decisions in the administration of the benefits, identification of the basis of the decisions, the decision maker or makers, the timing of the decisions, and the qualifications of the decision maker or makers, including expertise and specialty;

(e) If the analyses rely upon any experts, an assessment of each expert's qualifications, expertise and specialty, and a description of the extent to which the carrier relied upon each expert's evaluations in setting recommendations regarding both MH/SUD and medical/surgical benefits. Any variation in the use of experts (for example, specialty matching, licensure levels, etc.) for MH/SUD compared to M/S shall be defined and justified;

(f) A description of all exception processes available for each NQTL and when the exception may be applied;

(g) An explanation of how much discretion is allowed in applying the NQTL and whether such discretion is afforded comparably for processing MH/SUD benefit claims and medical/surgical benefits claims;

(h) Documentation of audits, reviews, and analyses to check sample claims or other administrative data to assess how each NQTL operates in practice, and whether written processes are correctly carried out, including the results of the audits and reviews performed on the NQTLs selected in accordance with Insurance Article, §15-144(c)(5), Annotated Code of Maryland, to conduct the comparative analysis required under Insurance Article, §15-144 (d)(2), Annotated Code of Maryland, as written, and in operation;

(i) Citations to any documents, studies, testing, claims data, or reports that include factors, sources, evidentiary standards, or other evidence relied upon in developing or applying the NQTL (for example, meeting minutes or reports showing how those considerations were applied), with copies of those items available on request; and

(j) A description of the consequences or penalties that apply when the NQTL requirement is not met.

Cross References

31.10.51.06A

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.05 Summary Form.

A. A carrier subject to Insurance Article, §15-144, Annotated Code of Maryland, shall prepare a summary form using only the template form posted on the Administration’s website.

B. The summary form shall be made available to plan members and accessible to the public on the carrier’s website no later than 30 days following the due date of each analysis report. In addition to the requirement under Insurance Article, § 15-144(c)(1)(iv), Annotated Code of Maryland that a carrier must provide the full comparative analysis to a member within 30 days of a written request, the carrier shall make the summary form available to plan members in response to a written request within 30 days of the request.

C. Carriers shall follow the instructions for completing the summary form using the instructions posted on the Administration’s website.

D. A complete summary form shall include responses to each applicable section of the standardized form, as described in the instructions posted on the Administration’s website.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.06 Compliance Plan.

A. If, as a result of the review of the reports described in Regulation .04 of this chapter, the Commissioner finds that a carrier subject to Insurance Article, §15-144, Annotated Code of Maryland, failed to comply with provisions of the Parity Act, the Commissioner shall notify the carrier and require the carrier to submit a compliance plan pursuant to Insurance Article, §15-144(i), Annotated Code of Maryland, to correct the noncompliance. The notice shall be in writing, but may be transmitted electronically.

B. The carrier shall have 90 days to file a compliance plan following the date a notice of noncompliance is issued by the Commissioner.

C. The compliance plan shall include:

(1) An acknowledgement of the Commissioner’s finding of noncompliance;

(2) A summary of action or actions taken by the carrier to correct the noncompliance prior to the notice from the Commissioner;

(3) A summary of future action or actions to correct the noncompliance and the time frame when the actions will be taken; and

(4) A summary of amounts owed to members or providers due to violations of the Parity Act, including:

(a) Any amounts owed to members and the payment date or dates;

(b) Draft correspondence to members;

(d) Draft correspondence to providers; and

(e) Confirmation of amounts paid to members and providers.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

COMAR 31.10.51.07 Effective Date.

This chapter is applicable to all reports filed after January 1, 2022.

History

Administrative History: Effective date: Effective December 27, 2021 (48:26 Md. R. 1113)
Administrative History: Chapter revised effective October 13, 2025 (52:20 Md. R. 1003)
Authority: Insurance Article, §§2-109(a)(1) and 15-144, Annotated Code of Maryland

31.11.01 Conversion of Group Health Insurance

COMAR 31.11.01.01 Purpose.

The purpose of this chapter is to provide appropriate standards and requirements for implementing the conversion privilege and notification requirements under group health insurance policies.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” means:

(a) An insurer as defined in Insurance Article, §1-101, Annotated Code of Maryland; or

(b) A nonprofit health service plan that is licensed to operate in Maryland.

(2) “Converted policy” means an individual policy or certificate issued to an individual in accordance with the requirements of this chapter upon termination of the individual's coverage under a group policy.

(3) Expense Incurred.

(a) “Expense incurred” means that the benefits payable under the contract are based on the medical expenses that the covered person incurs.

(b) For the purposes of this chapter, a contract that includes both expense-incurred benefits and indemnity benefits shall be considered to be written on an “expense-incurred” basis.

(4) “Group health insurance policy” or “group policy” means either:

(a) An insurance contract issued by an insurer under Insurance Article, §15-302, Annotated Code of Maryland, that insures employees or members, with or without their dependents, for hospital, surgical, medical, or major medical insurance on an expense-incurred basis; or

(b) A contract issued by a nonprofit health service plan to a group that insures employees or members, with or without their dependents, for hospital, medical, major medical, or surgical insurance on an expense-incurred basis.

(5) “Indemnity” means that the benefits payable under the contract are set amounts that are not related to the expenses the covered person incurs, such as a hospital indemnity policy that pays a flat fee for each day the covered person is confined in a hospital, regardless of the actual expenses the covered person incurs during the hospital confinement.

(6) “Insured person” means:

(a) An employee, a member, or another certificate holder covered under the group policy; or

(b) Any eligible dependent of the employee, member, or certificate holder covered under the group policy.

(7) “Medicare” means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.03 Applicability.

A. This chapter is applicable to group health insurance policies issued or renewed in Maryland on or after October 1, 1983 and prior to January 1, 2014, except as provided in §§B—C of this regulation.

B. This chapter is not applicable to:

(1) Group policies providing coverage only for:

(a) Specified diseases;

(b) Accidental injuries;

(d) Dental benefits;

(e) Vision care or any other supplemental benefit; or

(f) Any combination of the benefits described in §B(1)(a)—(e) of this regulation; or

(2) The following types of group policies:

(a) Hospital indemnity or other fixed indemnity coverage;

(b) Credit insurance;

(d) Long term care insurance as defined in Insurance Article, §18-101, Annotated Code of Maryland;

(e) Medicare supplement contracts;

(f) Any coverage issued under Chapter 55 of Title 10, U.S. Code, and any coverage issued as supplemental to coverage issued under Chapter 55 of Title 10, U.S. Code;

(g) Any coverage issued as supplemental to liability insurance, Workers' Compensation, or similar insurance;

(h) Automobile medical-payment insurance, or any insurance under which benefits are payable with or without regard to fault, whether written on a group, blanket or individual basis; or

(i) Any combination of the insurance benefits described in §B(2)(a)—(h) of this regulation.

C. The requirements of Regulations .09 and .10 of this chapter apply to all converted policies issued or renewed on or after April 7, 2008.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.04 Conversion Privilege.

A. All group policies, as defined in this chapter, shall contain a provision stating that an insured person who has been continuously covered under the group policy and under any group policy providing similar benefits which it replaces for at least 3 months and whose coverage is terminated for any reason other than the reasons described in §D of this regulation, shall have issued to him without evidence of insurability a converted policy providing benefits not less than the minimum benefits required by this chapter.

B. A carrier shall include a notice of the right of conversion in each certificate of coverage provided to individuals covered under group policies.

C. Termination.

(1) Termination of coverage shall include, but not be limited to, termination by reason of discontinuance of the group policy in its entirety or with respect to an insured class, or termination by reason of the individual's no longer meeting the definition of a dependent contained in the group policy, or by reason of no longer meeting the definition in the policy of an employee or member, or by reason of the individual's retirement.

(2) The following are intended as illustrations of terminations by reason of no longer meeting the definition of dependent:

(a) A surviving spouse, whose coverage under the group policy terminates at the death of the employee or member;

(b) A spouse whose coverage under the group policy terminates by reason of divorce or legal separation;

(d) A child whose coverage under the group policy terminates by reason of his reaching a limiting age specified in the group policy.

(3) If a group policy provides that a retired employee may continue to be covered under the group policy, the employee shall be given the option of electing the same conversion rights that would apply if the employee's insurance under the group policy had terminated at retirement.

D. Exceptions.

(1) The carrier is not required to issue a converted policy if the insured person is enrolled in a health maintenance organization, or is covered or eligible for coverage under another group policy which provides benefits substantially equal to the minimum benefits required by these regulations, or if the provisions of Regulation .06H(1) of this chapter would be applicable.

(2) The carrier is not required to issue a converted policy to a person eligible for Medicare.

(3) The carrier is not required to issue a converted policy if termination under the group policy occurred because:

(a) The employee, member, or dependent performed an act or practice that constitutes fraud in connection with the coverage;

(b) The employee, member, or dependent made an intentional misrepresentation of a material fact under the terms of coverage; or

(c) The terminated coverage under the group policy was replaced by similar coverage within 31 days after the date of termination of the group policy.

(4) The carrier is not required to issue a converted policy if the individual's coverage under the group policy terminated due to the insured person's failure to pay a required premium.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.05 Insurer's Option.

A. Instead of issuing an individual converted policy, the carrier may elect to provide the coverage required by this chapter by means of a group policy issued to a trustee and covering persons eligible for the conversion rights of these regulations.

B. The policy issued under §A of this regulation may provide that the entire premium be payable by the insured persons.

C. The group policy issued under §A of this regulation shall provide benefits not less than those stated in Regulations .06 and .10 of this chapter.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.06 Standards for Converted Policies.

A. The converted policy shall become effective on the day following the date of termination of insurance coverage under the group policy.

B. The converted policy shall cover the employee or member or dependents of the employee or member, or both, who are covered by the group policy on the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.

C. If a converted policy issued to an employee or member also covers a dependent child whose coverage under the group policy would have terminated at a specified date, the converted policy may provide for termination on or after that date, subject, however, to the requirements of Insurance Article, §15-402, Annotated Code of Maryland, whichever is applicable.

D. With respect to a person who was covered by the group policy, the period specified in the Time Limit on Certain Defenses provision of the converted policy shall begin with the date that person's insurance became effective under the group policy.

E. Preexisting Conditions.

(1) The converted policy may not contain exclusions for preexisting conditions, except to the extent that a condition was excluded from the group policy from which conversion was made.

(2) Benefits for pregnancy and childbirth may not be excluded from the converted policy if benefits for these conditions were provided under the group policy.

(3) The converted policy may provide that:

(a) Any hospital, surgical, or medical benefits payable under the converted policy may be reduced by the amount of any hospital, surgical, or medical benefits payable under the group policy after the termination of the individual's group coverage; and

(b) During the first policy year, the benefits payable under the converted policy, together with the benefits payable under the group policy, will not exceed the benefits that would have been payable had the individual's coverage under the group policy remained in force and effect.

F. Any and all probationary and waiting periods set forth in the converted policy shall be considered as being met to the extent coverage was in force under the group policy.

G. A converted policy may include a provision under which the carrier may request the following information in advance of any premium due date of the policy of any person covered under the policy whether:

(1) The person is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy, or hospital or medical service subscriber contract, or medical practice, health maintenance organization, or other prepayment plan, or by any other plan or program;

(2) The person is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis, or whether the person is in the military service; or

(3) Similar benefits are provided for or available to this person, pursuant to or in accordance with the requirements of any state or federal law.

H. The converted policy may provide that the carrier may refuse to renew the policy or the coverage of any person insured under the policy if:

(1) Benefits provided or available to the person under the sources referred to in §G of this regulation together with the benefits provided by the converted policy would result in overinsurance according to the insurer's standards on file with the Commissioner;

(2) The information requested in accordance with §G of this regulation is not provided in timely fashion;

(3) The information provided in response to the requirement of §G of this regulation is fraudulent or contains material misstatements;

(4) The individual failed to pay premiums or contributions in accordance with the terms of the converted policy, including timeliness requirements;

(5) The individual performed an act or practice that constitutes fraud in connection with coverage; or

(6) The individual made an intentional misrepresentation of a material fact under the terms of coverage.

I. Converted policies shall comply with the requirements of and contain the benefit provisions mandated under Insurance Article, Titles 14 and 15, Annotated Code of Maryland, to the extent applicable.

Cross References

31.11.01.04D(1)

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.07 Evidence of Insurability.

A. The converted policy shall be issued without evidence of insurability.

B. If the insured person was individually rated less favorably than standard under the group policy, or if all persons in the group policy were rated less favorably than standard, the converted policy may be issued with a corresponding rating.

C. If, by reason of a specific waiver or endorsement in the group policy, the insured person was specifically excluded from coverage for a specific named condition or conditions, a corresponding waiver or endorsement may be attached to the converted policy.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.08 Application for Converted Policy.

A. The conversion provision in the group policy may require that the insured person, or a person acting on behalf of the insured person, make written application for the converted policy and may not require that the first premium due to the carrier be paid sooner than 31 days following the termination of the insured person's coverage under the group policy, or sooner than any extended time provided in these regulations.

B. The application for the converted policy may not contain questions relating to the health, occupation, avocation, or lifestyle of the insured person, or other questions relating to insurability, except information required to determine eligibility for the converted policy.

C. The carrier may refuse to issue a converted policy or may issue a converted policy for a reduced amount if the application shows the insured person is covered under a group policy providing benefits substantially similar to the maximum benefits which the insured person could elect under the converted policy, or if the insured person has other health benefits available at least equal to the level of benefits which would permit the carrier to refuse to renew a converted policy in accordance with the standards of Regulation .06G and H of this chapter.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.09 Premiums for Converted Policies.

A. Except as provided in §C of this regulation, the initial premium for the converted policy for the first 12 months and subsequent renewal premium shall be determined in accordance with the carrier's premium rates applicable to:

(1) Individually underwritten standard risks;

(2) The age and class of risk of each individual to be covered under the converted policy; and

(3) The type and amount of coverage provided.

B. The experience under converted policies may not be an acceptable basis for establishing rates for converted policies.

C. A carrier may amend renewal premium rates for the subsequent year if:

(1) The carrier experiences incurred losses for a period of 2 years, on converted policies that have been in force for at least 1 year, which exceed earned premiums by more than 20 percent; and

(2) The amended premium rates are anticipated to produce a loss ratio of at least 120 percent.

D. Conditions pertaining to health status may not be an acceptable basis for classification for the purposes of this regulation.

E. The frequency of premium payment shall be the frequency customarily required by the carrier for the policy form and plan selected, provided that the carrier may not require premium payments less frequently than quarterly without the consent of the policyholder.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.10 Minimum Benefits under Converted Policies.

A. Except as provided in §B of this regulation, if the group policy from which conversion is made provided coverage for basic hospital, medical, or surgical expense insurance, the insured person at the insured person's option shall be entitled to obtain a converted policy under any one of Plans A, B, or C, which are described in §C of this regulation.

B. If the group policy provided hospital benefits based on the full cost of a semiprivate room, the carrier, at its option, may offer the insured person only Plan A, and if the group policy provided hospital benefits on a basis other than the full cost of a semiprivate room, the carrier, at its option, may offer the insured person only Plans B and C.

C. Plans A—C provide the following minimum benefits:

(1) A Plan A policy shall provide as minimum the following benefits or similar benefits which are substantially actuarially equivalent:

(a) All semiprivate room and board and miscellaneous hospital charges for a 70-day maximum duration, and

(b) Surgical-medical expense benefits according to a schedule consistent with those customarily offered by the carrier under group insurance policies and providing a maximum benefit of $7,000;

(2) A Plan B policy shall provide as minimum the following benefits or similar benefits which are substantially actuarially equivalent:

(a) Hospital room and board benefits in a maximum amount of $700 daily for a 70-day maximum duration;

(b) Miscellaneous hospital expense benefits in a maximum amount of $7,000; and

(c) Surgical-medical expense benefits according to a schedule consistent with those customarily offered by the carrier under group policies and providing a maximum benefit of $7,000;

(3) A Plan C policy shall provide as minimum the following benefits or similar benefits which are substantially actuarially equivalent:

(a) Hospital room and board benefits in a maximum amount of $350 daily for a 70-day maximum duration;

(b) Miscellaneous hospital expense benefits in a maximum amount of $3,500; and

(c) Surgical-medical expense benefits according to a schedule consistent with those customarily offered by the carrier under group policies and providing a maximum benefit of $3,500.

D. If the group policy from which conversion is made provided coverage for major medical or catastrophe expense benefits, the insured person shall be entitled to obtain a converted policy meeting the following minimum specifications subject to the deductible and the limitation of §§E and F of this regulation, or similar benefits which are substantially actuarially equivalent:

(1) Hospital room and board benefits in an amount not less than 75 percent of the charges for semiprivate room accommodations;

(2) Miscellaneous hospital expense benefits for the charges made by the hospital for services and supplies which are customarily furnished by the hospital and provided for use during a period of hospital confinement, in an amount not less than 75 percent of the charges incurred subject to a maximum of $7,000;

(3) Surgical expense benefits not less than 75 percent of the scheduled benefits customarily offered by the carrier under its group policy with a maximum of $7,000;

(4) Anesthesia services, consisting of administration of necessary general anesthesia and related procedures in connection with covered surgical services rendered by a physician other than the physician, or the physician's assistant, performing the surgical services, in an amount not less than 75 percent of the reasonable charges;

(5) Medical expense benefits for the diagnosis and treatment of sickness or injury, in an amount not less than 75 percent of the reasonable charges; and

(6) Seventy-five percent of reasonable charges for diagnostic X-ray, laboratory services, radiation therapy, prosthetic appliances, and rental of durable medical equipment required for therapeutic use.

E. Major medical or catastrophe coverage benefits may be subject to a deductible equal to the benefits provided under any basic hospital-medical-surgical policy or other plan of health benefits covering the insured person plus a cash deductible of $800.

F. A major medical or catastrophe converted policy may be subject to an aggregate maximum benefit limit per person of $350,000.

G. Benefit Periods and Benefit Limits.

(1) The converted policy may use a definition of benefit period similar to that contained in the group policy from which conversion is made or may use a calendar year benefit period.

(2) The converted policy may contain a benefit limit for each benefit period.

(3) The benefit limit need not be greater than the limit for each benefit period which was available under the group policy, or $87,500, if less.

H. The benefits required under §§C and D of this regulation may be combined in a comprehensive policy which affords benefits at least as favorable as those required under §§C and D of this regulation, when both are applicable.

Cross References

31.11.01.11

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.11 Benefit Levels.

If the coverage under the group policy from which conversion is being made provided benefits less than those which would be required in Regulation .10 of this chapter, the carrier, at its option, may provide a converted policy with benefits which are substantially similar to those provided under the group policy instead of offering the plans required in Regulation .10 of this chapter.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.12 Out-of-State Conversions.

A. A converted policy which is delivered outside of Maryland as a conversion from a group policy issued in Maryland shall be on a form which is permitted to be delivered in the other jurisdiction.

B. If the carrier is prohibited by the law of the other jurisdiction from issuing a converted policy by reason of not being licensed in that jurisdiction, the carrier shall provide coverage in accordance with the requirements of these regulations under a group policy issued in Maryland or in another jurisdiction in which the carrier is licensed.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.13 Modified Requirements.

Upon request of a carrier, the Commissioner may grant approval for modification of any of the minimum specifications or other requirements of these regulations upon a showing by the carrier that modification is equitably warranted.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.14 Notification.

A. The insured person whose coverage under a group policy terminates and who is entitled to make application for a converted policy shall be notified of this right, on or before the date of termination of coverage, but not more than 61 days before.

B. An insured person who receives the timely notice of the conversion privilege, as described in §A of this regulation, shall be given the right to apply for the converted policy until at least 45 days after the date the individual's coverage under the group policy terminates.

C. If the insured person is not provided the notification described in §A of this regulation, then the insured person shall have the right to apply for a converted policy within the time stated in the notice which shall be at least 31 days after the date of the notice, except that the late notice may not extend the period for making application beyond 90 days after the termination of coverage in the group policy.

D. Except as provided in §E of this regulation, written notice presented to the insured person or mailed by the group policyholder to the last known address of the insured person or mailed by the carrier to the last known address of the insured person as furnished by the policyholder shall constitute notice for the purpose of this regulation.

E. Notice given by the policyholder or the carrier by mail which is returned undelivered does not constitute notice for the purpose of this regulation.

F. Unless the written notice is to be provided by the carrier, the group policy shall contain a provision to the effect that notice of the conversion privilege shall be given by the group policyholder to the affected certificate holder upon termination of coverage of the insured person.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

COMAR 31.11.01.15 Amendment of Group Policy.

Any group policy issued in Maryland before the effective date of these regulations and not in conformity with these regulations, shall be amended on the annual renewal date of the group policy to conform to the regulations in this chapter.

History

Administrative History: Effective date: November 1, 1983 (10:14 Md. R. 1261)
Administrative History: Regulation .02C adopted effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .07C amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: Regulation .11 amended effective May 6, 1996 (23:9 Md. R. 670)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.61 to COMAR 31.11.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 7, 2008 (35:7 Md. R. 752)
Administrative History: Regulation .03A amended effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §2-109, Annotated Code of Maryland

31.11.02 Group Health Insurance — Continuation of Coverage of Divorced Spouses

COMAR 31.11.02.01 Purpose.

The purpose of this chapter is to provide standards for implementing requirements of the Insurance Article and of Health-General Article, Annotated Code of Maryland, with respect to providing or continuing coverage for certain divorced spouses and dependent children.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Applicable change in status” means the divorce of the insured and the insured's spouse.

(2) “Dependent child” means an individual who:

(a) Is a child of the insured; and

(b) Either was covered under the group contract as a qualified or eligible dependent of the insured immediately preceding the applicable change in status, or was born to a qualified secondary beneficiary after the applicable change in status.

(3) “Employer” means an employer, an association of employers, or a trust sponsored by an employer or an association of employers to whom a group contract has been issued.

(4) Expense-Incurred Basis.

(a) “Expense-incurred Basis” means that the:

(i) Payment of benefits is based in whole or in part on the charge made by the provider; or

(ii) Services are directly provided without additional charge except for any deductible or copayment specified in the policy.

(b) Policies or contracts issued on an expense-incurred basis include, but are not limited to:

(i) Health maintenance organization coverage;

(ii) A policy which provides for the cost of a semiprivate hospital room;

(iii) A policy which provides coverage for a semiprivate hospital room subject to a daily deductible;

(iv) A policy which provides coverage for a semiprivate hospital room but which is subject to a copayment;

(v) A policy which provides a daily hospital benefit of more than $100;

(vi) A policy which pays medical-surgical benefits on a usual and customary basis.

(i) A policy which provides a daily hospital benefit of a fixed dollar amount not in excess of $100 per day;

(ii) A policy which provides only medical-surgical benefits in accordance with a fixed schedule of fees.

(5) “Group policy” or “group contract” means an insurance contract issued or delivered in this State which provides hospital, surgical, medical, or major medical coverage issued to an employer for the benefit of its employees by:

(a) An authorized insurer in accordance with Insurance Article, §15-302, Annotated Code of Maryland;

(b) A nonprofit health service plan authorized under Insurance Article, §§14-108—14-111, Annotated Code of Maryland; or

(c) A health maintenance organization authorized under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

(6) “Insured” means an employee who is a resident of this State and is covered under a group policy.

(7) “Qualified secondary beneficiary” means, with respect to the insured, an individual other than the insured who is a:

(a) Beneficiary under the group contract as the spouse of the insured for at least the 30-day period immediately preceding an applicable change in status; or

(b) Dependent child.

(8) “Self-insured group health benefit program or plan” means a program or plan furnished by an employer for the benefit if its employees providing hospital, medical, surgical, or major medical benefits on an expense-incurred basis similar to benefits which could be provided under a group health insurance policy.

(9) “Termination statement” means a written notice of an event specified in Regulation .07 of this chapter provided to an employer on a form containing language prescribed by the Commissioner, or in substantially similar language, which is signed by the insured and:

(a) A qualified secondary beneficiary; or

(b) Accompanied by a signed and sworn affidavit of the insured verifying the factual content of the statement.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.03 Applicability.

A. These regulations shall be applicable to all group health insurance policies or contracts issued or delivered in this State to the employer of the insured which provide hospital, surgical, medical, or major medical benefits on an expense-incurred basis whether issued by a nonprofit health service plan or by any other insurer and to all group policies or contracts issued or delivered in this State to an employer of an insured by a health maintenance organization certified under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

B. These regulations shall be applicable to any policy or contract issued on or after the effective date of these regulations, beginning with the date of issue of the policy or contract.

C. These regulations shall be applicable to any policy or contract issued before the effective date of these regulations, beginning on the first annual renewal date or the first anniversary of the date of issue of the policy or contract occurring on or next following the effective date of these regulations.

Agency Note: Federal statutes and regulations may provide broader or additional benefits for persons to whom these regulations are applicable.

Cross References

31.11.02.09C

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.04 Eligibility.

A. Beginning with an applicable change in status and until the occurrence of an event described in Regulation .07 of this chapter, the qualified secondary beneficiary shall be entitled to the benefits provided under the group contract.

B. Section A of this regulation may not be applicable to any period during which the insured is not covered by a group contract.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.05 Coverage Provided.

A. The coverage provided to a qualified secondary beneficiary shall be identical to the coverage which would have been provided under the group contract for the benefit of the qualified secondary beneficiary if the individual had remained an eligible dependent of the insured employee and there had been no applicable change in status.

B. If modifications are made in the employer's group contract, the coverage provided to the qualified secondary beneficiary shall be correspondingly modified.

C. If the employer transfers from one group contract to another, the coverage provided the qualified secondary beneficiary shall be transferred to that provided under the new group contract.

D. If the employer provides various hospital, surgical, medical, or major medical coverages under one or more group contracts, a qualified secondary beneficiary may not choose less than all of the benefits provided unless the insured employee would have had the option of making such a choice for an eligible dependent if there had been no applicable change in status.

E. The benefits to be provided under the group contract shall be in no respect less favorable than those required by these regulations.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.06 Conditions of Coverage.

A. In order to receive the benefits provided under the group contract, an insured employee, or the divorced spouse of the insured employee, shall notify the employer of the applicable change in status not later than:

(1) 60 days after the applicable change in status if on the date of the applicable change in status the employee is covered under the employer's group contract or under another group contract issued to the same employer replacing that contract. The coverage shall be retroactive to the applicable change in status.

(2) 30 days after the date the insured employee becomes eligible for coverage under a group contract issued to another employer, if the insured employee becomes covered under the new employer's group contract after the applicable change in status. The coverage shall be retroactive to the date of eligibility.

B. The request to the employer under §A of this regulation shall be in writing and signed by the insured.

C. Costs Paid to Employer.

(1) The insured employee or the qualified secondary beneficiary shall pay to the employer the employer's entire cost for the coverage to be provided.

(2) The entire cost to the employer includes the employer's customary contribution as well as the contribution customarily required of an employee if there were no applicable changes in status.

(3) If the insurer quotes rates to the employer separately for individual coverage and for dependent coverage, the payment to be made on behalf of the qualified secondary beneficiary shall be the rate quoted for dependents.

(4) If the insurer quotes a family rate which would normally include an employee and eligible dependents, the amount payable on behalf of the qualified secondary beneficiary shall be the difference between the family rate and the rate payable for an individual employee who is not covered for dependents.

(5) If, in connection with a divorce, there is a court order or an agreement between the insured and the insured's spouse as to the allocation of the cost of the insurance coverage between the insured employee and the spouse, payment to the employer shall be made in accordance with the terms of the court order or the agreement.

D. Payment to the employer for the cost of the coverage is due and shall be paid on or before the first day of each month for which coverage is to be provided unless the employer agrees in writing to payment at a later date. The following apply:

(1) If the employer customarily collects employee contributions under the group contract on a quarterly basis, the required payment is due and shall be paid on or before the first day of each quarter for which coverage is to be provided.

(2) At the time of the notice referred to in §A of this regulation, payment will be due on the date notice is given. On that date the amount of payment due shall be the accumulated charges to cover the period beginning with the effective date of the coverage to be provided to the end of the month in which the notice is given.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.07 Termination.

A. Coverage for a qualified secondary beneficiary will terminate when the coverage under the group contract terminates with respect to the insured employee.

B. Even though the insured employee continues to be covered under the group contract, coverage with respect to any individual qualified secondary beneficiary shall terminate on the date of occurrence of any of the following:

(1) The date on which the qualified secondary beneficiary becomes eligible for hospital, surgical, medical, or major medical benefits under any insured group contract or any health maintenance organization group contract or any self-insured group health benefit program or plan provided the:

(a) Group contract or the self-insured program or plan is on an expense-incurred basis, and

(b) Eligibility does not result from the provisions of these regulations;

(2) The date on which the insured becomes entitled to benefits under Title XVIII of the Social Security Act;

(3) The date on which a qualified secondary beneficiary who is a dependent child would no longer have been covered under the group contract if there had been no applicable change in status;

(4) The date of remarriage of an individual who is a qualified secondary beneficiary by reason of having been the divorced spouse of the insured employee;

(5) The date on which the qualified secondary beneficiary becomes insured under a non-group policy or contract or under a non-group health maintenance organization contract which provides coverage for hospital, surgical, medical, or major medical benefits on an expense-incurred basis;

(6) The effective date of an election by a qualified secondary beneficiary to no longer be covered under the group contract;

(7) The date the employer receives a duly executed notice of termination, or the effective date of the notice if later;

(8) The premium due date on which the premium payable to the employer by or on behalf of the qualified secondary beneficiary is not timely made.

Cross References

31.11.02.02B(9)

31.11.02.04A

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.08 Conversion and Continuation — Repealed.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.09 Notification Requirements.

A. Each group contract to which these regulations are applicable shall include a statement as provided in §B of this regulation.

B. The statement shall disclose the availability of the benefits provided under these regulations and shall provide a summary of the eligibility requirements, the duration and general description of the benefits.

C. Each group contract issued before the effective date of these regulations, to which these regulations are applicable, shall be amended in accordance with these regulations not later than the date of applicability stated in Regulation .03B of this chapter.

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.02.10 Termination Statement.

A. The termination statement shall be in language substantially as indicated in this regulation.

B. If the termination statement is signed by the insured and a qualified secondary beneficiary:

To _____________________________________________________________________________________________

(name of employer)

This is to advise that _______________________________________________________________________________

(name or names of qualified secondary beneficiaries)

is/are no longer to be covered under our group health insurance contract effective ________________________________

(date)

The reason for this termination is ______________________________________________________________________

(reason)

I affirm under penalties of perjury that the reason given in this statement is factually correct.

Date: ___________________________

(signature of insured)

(signature of qualified secondary beneficiary)

C. If the termination statement is to be signed only by the insured:

To _____________________________________________________________________________________________

(name of employer)

This is to advise that _______________________________________________________________________________

(name or names of qualified secondary beneficiaries)

is/are no longer to be covered under our group health insurance contract effective ________________________________

(date)

The reason for this termination is ______________________________________________________________________

(reason)

Date: ___________________________

(signature of insured)

On this ___________________________ personally appeared before me ________________________________________

(date) (name of insured)

who affirmed under oath that the above is true to the best of his/her knowledge and belief.

(signature of notary public)

My appointment expires _______________________________(Notary Seal)

History

Administrative History: Effective date: September 19, 1988 (15:19 Md. R. 2247)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.77 to COMAR 31.11.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

31.11.03 Group Health Insurance — Continuation of Coverage of Surviving Spouses

COMAR 31.11.03.01 Purpose.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Applicable change in status” means the death of the insured.

(2) “Dependent child” means an individual who:

(a) Is a child of the insured; and

(3) “Employer” means an employer, an association of employers, or a trust sponsored by an employer or an association of employers to whom a group contract has been issued.

(4) “Expense-incurred basis” means that the:

(a) Payment of benefits is based in whole or in part on the charge made by the provider; or

(b) Services are directly provided without additional charge except for any deductible or copayment specified in the policy;

(i) Health maintenance organization coverage,

(ii) A policy which provides for the cost of a semiprivate hospital room,

(iii) A policy which provides coverage for a semiprivate hospital room subject to a daily deductible,

(iv) A policy which provides coverage for a semiprivate hospital room but which is subject to a copayment,

(v) A policy which provides a daily hospital benefit of more than $100,

(vi) A policy which pays medical-surgical benefits on a usual and customary basis;

(d) Following policies or contracts are not to be regarded as being on an expense-incurred basis:

(i) A policy which provides a daily hospital benefit of a fixed dollar amount not in excess of $100 per day,

(ii) A policy which provides only medical-surgical benefits in accordance with a fixed schedule of fees.

(a) An authorized insurer in accordance with Insurance Article, §15-302, Annotated Code of Maryland;

(b) A nonprofit health service plan authorized under Insurance Article, §§14-108—14-111, Annotated Code of Maryland; or

(c) A health maintenance organization authorized under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

(6) “Insured” means an employee who is a resident of this State and covered under a group policy for a period of not less than 3 months.

(7) “Qualified secondary beneficiary” means, with respect to an insured, an individual other than the insured who is:

(a) A beneficiary under the group contract as the spouse of the insured for at least the 30-day period immediately preceding an applicable change in status; or

(b) A dependent child.

(8) “Self-insured group health benefit program or plan” means a program or plan furnished by an employer for the benefit of its employees providing hospital, surgical, medical, or major medical benefits on an expense-incurred basis similar to benefits which could be provided under a group health insurance policy.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.03 Applicability.

A. This chapter is applicable to all group health insurance policies or contracts issued or delivered in this State to the employer of the insured which provide hospital, surgical, medical, or major medical benefits on an expense-incurred basis whether issued by a nonprofit health service plan or by any other insurer, and to all group policies or contracts issued or delivered in this State to an employer by a health maintenance organization certified under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

B. This chapter is applicable to any policy or contract issued on or after the effective date of this chapter, beginning with the date of issue of the policy or contract.

C. This chapter is applicable to any policy or contract issued before the effective date of this chapter, beginning on the first annual renewal date or the first anniversary of the date of issue of the policy or contract occurring on or next following the effective date of this chapter.

Agency Note : Federal statutes and regulations may provide broader or additional benefits for persons to whom this chapter is applicable.

Cross References

31.11.03.09C

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.04 Eligibility.

Beginning with an applicable change in status and until the occurrence of an event described in Regulation .07 of this chapter, the qualified secondary beneficiary shall be entitled to the benefits provided under the group contract.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.05 Coverage Provided.

A. The coverage provided to a qualified secondary beneficiary shall be identical to the coverage which would have been provided under the group contract for the benefit of the qualified secondary beneficiary if the qualified secondary beneficiary had remained an eligible dependent of the insured employee and there had been no applicable change in status.

B. If modifications are made in the employer's group contract, the coverage provided to the qualified secondary beneficiary shall be correspondingly modified.

C. If the employer transfers from one group contract to another, the coverage provided the qualified secondary beneficiary will be transferred to that provided under the new group contract.

D. If the employer provides various hospital, surgical, medical, or major medical coverages under one or more group contracts, a qualified secondary beneficiary may not elect to choose less than all of the benefits provided unless the insured employee would have had the option of making such a choice for an eligible dependent if there had been no applicable change in status.

E. The benefits to be provided under the group contract shall be in no respect less favorable than those required by this chapter.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.06 Conditions of Coverage.

A. In order to receive the benefits provided under the group contract, a surviving spouse of the insured employee shall elect coverage not later than 45 days after the applicable change in status if a request is made for coverage under the group contract under which the insured employee is covered on the date of the applicable change in status. The coverage shall be retroactive to the applicable change in status.

B. The request to the employer under §A of this regulation shall be in writing and signed by the qualified secondary beneficiary.

C. Costs to Secondary Beneficiary.

(1) The qualified secondary beneficiary shall pay to the employer the employer's entire cost for the coverage to be provided.

(2) The entire cost to the employer includes the employer's customary contribution as well as the contribution customarily required of an employee if there were no applicable change in status.

(3) The entire cost to the employer may include a reasonable administrative fee not to exceed 2 percent of the amount permitted under §C(2) of this regulation.

(4) If the insurer quotes rates to the employer separately for individual coverage and for dependent coverage, the payment to be made on behalf of the qualified secondary beneficiary shall be the rate quoted for dependents.

(5) If the insurer quotes a family rate which would normally include an employee and eligible dependents, the amount payable on behalf of the qualified secondary beneficiary shall be the difference between the family rate and the rate payable for an individual employee who is not covered for dependents.

D. Due Date of Premium.

(1) Payment to the employer for the cost of the coverage is due and shall be paid on or before the first day of each month for which coverage is to be provided unless the employer agrees in writing to payment at a later date.

(2) At the time of the request referred to in §A of this regulation, payment will be due on the date of request. At the date of the request, the amount of payment due shall be the accumulated charges to cover the period beginning with the effective date of the coverage to be provided to the end of the month in which the request is made.

Cross References

31.11.03.07G

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.07 Termination.

Coverage for a qualified secondary beneficiary will terminate on the earliest of any of the following:

A. 18 months after the date of the applicable change in status;

B. The date on which the qualified secondary beneficiary becomes eligible for hospital, surgical, medical, or major medical benefits under any insured group contract or any health maintenance organization group contract or any self-insured group health benefit program or plan provided:

(1) The group contract or the self-insured program or plan is on an expense-incurred basis; and

(2) The eligibility does not result from the provisions of these regulations;

C. The date on which the qualified secondary beneficiary becomes entitled to benefits under Title XVIII of the Social Security Act;

D. The date on which a qualified secondary beneficiary who is a dependent child would no longer have been covered under the group contract if there had been no applicable change in status;

E. The date on which the qualified secondary beneficiary becomes insured under a non-group policy or contract or under a non-group health maintenance organization contract which provides coverage for hospital, surgical, medical, or major medical benefits on an expense-incurred basis;

F. The effective date of an election by a qualified secondary beneficiary to no longer be covered under the group contract; or

G. The premium due date on which the qualified secondary beneficiary fails to make timely payment of any amount required under Regulation .06C of this chapter.

Cross References

31.11.03.02B(9)

31.11.03.04

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.08 Conversion and Continuation — Repealed.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.09 Notification Requirements.

A. Each group contract to which these regulations are applicable shall include a statement as provided in §B of this regulation.

B. The statement shall disclose the availability of the benefits provided under these regulations and shall provide a summary of the eligibility requirements, the duration, and general description of the benefits.

C. Each group contract issued before the effective date of this chapter, to which this chapter is applicable, shall be amended in accordance with this chapter not later than the date of applicability stated in Regulation .03C of this chapter.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.10 Election Statement.

The form which a qualified secondary beneficiary shall use to elect coverage under these regulations shall be in language substantially as indicated in this regulation:

To _____________________________________________________________________________________________

(name of employer)

The employee ____________________________________________________________________________________

(name of employee)

Whose Social Security number was ____________________________ died on ____________________________________

(date od death)

This is to advise that _______________________________________________________________________________

(name or names of qualified secondary beneficiaries)

who were covered as qualified dependents of the employee under the employer's group health insurance contract elect(s) to continue to be covered under that contract beginning with the date of death.

Date of Application: ________________________________

Signature of Qualified

Secondary Beneficiary: _____________________________________________________________________________

Mailing Address of

Secondary Beneficiary: _______________________________________________________________________________

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.03.11 Termination Statement.

The termination statement shall be in language substantially as indicated in this regulation:

To _____________________________________________________________________________________________

(name of employer)

This is to advise that _______________________________________________________________________________

(name or names of qualified secondary beneficiaries)

is/are no longer to be covered under our group health insurance contract effective ________________________________

(date)

The reason for this termination is ______________________________________________________________________

(reason)

Date: ___________________________

(signature of qualified secondary beneficiary)

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.83 to COMAR 31.11.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), 15-407—15-409, and 15-412; Health-General Article, §19-703; Annotated Code of Maryland

31.11.04 Group Health Insurance — Continuation of Coverage for Terminated Employees

COMAR 31.11.04.01 Purpose.

The purpose of this chapter is to provide standards for implementing requirements of the Insurance Article, Health-General Article, and Unemployment Insurance Law, Annotated Code of Maryland, with respect to continuation of coverage for certain terminated employees.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Applicable Change in Status.

(a) “Applicable change in status” means the termination of the insured's employment other than for cause.

(b) “Applicable change in status” includes:

(i) Involuntary termination of the insured's employment other than for cause; and

(ii) Voluntary termination of the insured's employment by the insured.

(2) “Employer” means an employer, an association of employers, or a trust sponsored by an employer or an association of employers to whom a group contract has been issued.

(3) “Expense-incurred basis” means that the:

(a) Payment of benefits is based in whole or in part on the charge made by the provider; or

(b) Services are directly provided without additional charge except for any deductible or copayment specified in the policy;

(i) Health maintenance organization coverage;

(ii) A policy which provides for the cost of a semiprivate hospital room;

(iii) A policy which provides coverage for a semiprivate hospital room subject to a daily deductible;

(iv) A policy which provides coverage for a semiprivate hospital room but which is subject to a copayment;

(v) A policy which provides a daily hospital benefit of more than $100;

(vi) A policy which pays medical-surgical benefits on a usual and customary basis;

(d) Following policies or contracts are not to be regarded as being on an expense-incurred basis:

(i) A policy which provides a daily hospital benefit of a fixed dollar amount not in excess of $100 per day;

(ii) A policy which provides medical-surgical benefits in accordance with a fixed schedule of fees.

(4) “Group policy” or “group contract” means an insurance contract issued or delivered in this State which provides hospital, surgical, medical, or major medical coverage issued to an employer for the benefit of its employees by:

(a) An authorized insurer in accordance with Insurance Article, §15-302, Annotated Code of Maryland;

(b) A nonprofit health service plan authorized under Insurance Article, §§14-108—14-111, Annotated Code of Maryland; or

(c) A health maintenance organization authorized under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

(5) “Insured” means an employee who is a resident of this State and covered under a group policy for a period of not less than 3 months.

(6) “Self-insured group health benefit program or plan” means a program or plan furnished by an employer for the benefit of its employees providing hospital, surgical, medical, or major medical benefits on an expense-incurred basis similar to benefits which could be provided under a group health insurance policy.

(7) “Termination statement” means a written notice of an event specified in Regulation .07 of this chapter provided to an employer on a form containing language prescribed by the Commissioner, or in substantially similar language, which is signed by the insured.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.03 Applicability.

A. These regulations shall be applicable to all group health insurance policies or contracts issued or delivered in this State to the employer of the insured which provide hospital, surgical, medical, or major medical benefits on an expense-incurred basis whether issued by a nonprofit health service plan or by any other insurer and to all group policies or contracts issued or delivered in this State to an employer by a health maintenance organization certified under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

B. These regulations shall be applicable to any policy or contract issued on or after the effective date of these regulations, beginning with the date of issue of the policy or contract.

Agency Note: Federal statutes and regulations may provide broader or additional benefits for persons to whom this chapter is applicable.

Cross References

31.11.04.09C

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.04 Eligibility.

Entitlement to continuation benefits shall begin with an applicable change in status and last until the occurrence of an event described in Regulation .06 of this chapter.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.05 Coverage Provided.

A. The coverage provided shall be identical to the coverage offered under the group contract to similarly situated individuals for whom there has been no applicable change in status.

B. If the group policy provides benefits for spouses and dependent children, the coverage provided shall be available to the insured's:

(1) Spouse if the spouse was covered under the group policy before the applicable change in status; and

(2) Dependent children if the insured had coverage for dependent children before the applicable change in status.

C. If the employer transfers from one group contract to another, the coverage provided the insured will be transferred to that coverage provided under the new group contract.

D. If the employer provides various hospital, surgical, medical, or major medical coverages under one or more group contracts, an insured may not elect to choose less than all of the benefits provided unless the insured would have had the option of making such a choice if there had been no applicable change in status.

E. The benefits to be provided under the group contract shall be in no respect less favorable than those required by these regulations.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.06 Conditions of Coverage.

A. In order to receive the benefits provided under the group contract, an insured shall elect coverage not later than 45 days after the applicable change in status.

B. The coverage shall be retroactive to the applicable change in status.

C. The request to the employer under §A of this regulation shall be in writing and signed by the insured.

D. Continuation coverage shall be provided without evidence of insurability or additional waiting periods.

E. Costs to Insured.

(1) The insured shall pay to the employer the employer's entire cost for the coverage to be provided.

(2) The entire cost to the employer includes the employer's customary contribution as well as the contribution customarily required of an employee if there were no applicable change in status.

(3) The entire cost to the employer may include a reasonable administrative fee not to exceed 2 percent of the amount permitted under §E(2) of this regulation.

F. The insured may elect to pay the employer the amount due for the cost of the coverage in monthly installments.

G. In addition to the allowable cost provided for under §E of this regulation, the first payment to the employer by the insured shall include the cost for the coverage provided after the change in status and until the end of the month in which the insured makes an election.

Cross References

31.11.04.04

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.07 Termination.

Coverage for the insured shall terminate on the earliest of any of the following:

A. 18 months after the date of the applicable change in status;

B. The date on which the insured becomes eligible for hospital, surgical, medical, or major medical benefits under any insured group contract or any health maintenance organization group contract or any self-insured group health benefit program or plan provided:

(1) The group contract or the self-insured program or plan is on an expense-incurred basis; and

(2) The eligibility does not result from the provisions of this chapter;

C. The date on which the insured becomes entitled to benefits under Title XVIII of the Social Security Act;

D. The date on which the insured becomes covered under a non-group policy or under a non-group health maintenance organization contract which provides coverage for hospital, surgical, medical, or major medical benefits on an expense-incurred basis;

E. The premium due date on which the insured does not make timely payment in the amount required for the provided coverage;

F. The date on which the insured elects not to be covered under the group contract;

G. The date on which the employer ceases to provide hospital, surgical, medical, or major medical benefits to its employees under a group contract.

Cross References

31.11.04.02B(7)

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.08 Conversion and Continuation — Repealed.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.09 Notification Requirements.

A. Every group contract to which this chapter is applicable shall include a statement as provided in §B of this regulation.

B. The statement shall disclose the availability of the benefits provided under this chapter and shall provide a summary of the eligibility requirements, the duration, and general description of the benefits.

C. Every group contract issued before the effective date of this chapter, to which this chapter is applicable, shall be amended in accordance with this chapter not later than the date of applicability stated in Regulation .03C of this chapter.

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.10 Election Statement.

The form which the insured shall use to elect coverage under these regulations shall be in language substantially as indicated in this regulation:

To _____________________________________________________________________________________________

(name of employer)

I _____________________________________________________________________________ whose Social Security

(name of employee)

number is __________________________________have been terminated as an employee on _______________________.

(date of termination)

Before termination I was covered under the employer's group health insurance contract (check one)

____ for myself.

____ for myself and dependents.

I elect to have this coverage continue in force and I agree to pay the required premium.

Date of Application: __________________________________

Signature of Insured: _________________________________

Mailing Address: ___________________________________________________________________________________

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

COMAR 31.11.04.11 Termination Statement.

The termination statement shall be in language substantially as indicated in this regulation.

To _____________________________________________________________________________________________

(name of employer)

This is to advise that ____________________________________________________________and covered dependents,

(name of insured)

if any, are no longer to be covered under our group health insurance contract effective ______________________________

(date)

The reason for this termination is ______________________________________________________________________

(reason)

Date: ___________________________

Signature of Insured: _______________________________________________________________________________

History

Administrative History: Effective date: December 14, 1987 (14:25 Md. R. 2659)
Administrative History: Regulation .10 amended effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.84 to COMAR 31.11.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .02B amended effective September 27, 2004 (31:19 Md. R. 1434)
Administrative History: Regulation .08 repealed effective June 22, 2015 (42:12 Md. R. 764)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-409; Health-General Article, §19-703; Annotated Code of Maryland

31.11.05 Group Health Insurance Options for Alzheimer's Disease and for Diseases of the Elderly

COMAR 31.11.05.01 Scope.

A. This chapter is applicable to all group health insurance policies issued or renewed in Maryland on or after July 1, 1987, except as noted below.

B. Any group health insurance policy issued before the effective date of this chapter shall be subject to this chapter on the annual renewal date of the policy falling on or next following the effective date.

C. This chapter is not applicable to group health insurance policies which:

(1) Do not provide benefits for the cost of medical care on an expense-incurred basis; or

(2) Provide benefits for accidents only.

History

Administrative History: Effective date: December 28, 1987 (14:26 Md. R. 2745)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.80 to COMAR 31.11.05 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-801, Annotated Code of Maryland

COMAR 31.11.05.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Alzheimer's disease” means a progressive brain disease diagnosed as Alzheimer's disease by the insured's licensed attending physician and confirmed by a second opinion of a licensed physician.

(2) “Diseases of the elderly” means any disease, illness, injury, or medical condition which has caused the elderly insured to become functionally impaired or disabled so as to require nursing home care or intermediate or custodial nursing care and which has been confirmed by a second opinion of a licensed physician.

(3) “Elderly” means an insured who is 65 years old or older.

(4) “Group health insurance policy” means an insurance policy issued in Maryland either:

(a) Providing benefits for hospital, surgical, medical, major medical, or all of the above, in accordance with Insurance Article, §15-302, Annotated Code of Maryland; or

(b) Providing benefits for health, surgical, medical, major medical, or all of the above to a group of persons by a nonprofit health service plan, pursuant to Insurance Article, Title 14, Subtitle 1, Annotated Code of Maryland.

(5) “Group of persons” means the types of groups as defined in Insurance Article, §15-302, Annotated Code of Maryland.

(6) “Insured” means a person covered under a group health insurance policy.

(7) “Intermediate or custodial nursing care” means any form of health or health-related service, whether provided in a custodial or noncustodial setting, which is designed to provide therapeutic, rehabilitative, supportive, or maintenance care to a person who has chronic or deteriorating medical conditions which impair the person's ability to function at his or her own optimum level, but not including treatment of the conditions during the initial, acute stage of the condition or conditions.

(8) “Nursing home” means a facility or institution or part of it that:

(a) Provides nursing care for chronically ill or convalescent patients; or

(b) Offers to provide 24-hour a day nursing care of patients in a home-type facility such as a:

(i) Convalescent home,

(ii) Nursing unit of a home for the aged,

(iii) Psychiatric nursing home,

(iv) Nursing facility for the handicapped,

(v) Home for alcoholics, or

(vi) Halfway house.

History

Administrative History: Effective date: December 28, 1987 (14:26 Md. R. 2745)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.80 to COMAR 31.11.05 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-801, Annotated Code of Maryland

COMAR 31.11.05.03 Required Health Insurance Options.

Each insurer shall offer the following options for its group health insurance policies:

A. One option to cover Alzheimer's disease; and

B. One option to cover Alzheimer's disease as well as diseases of the elderly.

History

Administrative History: Effective date: December 28, 1987 (14:26 Md. R. 2745)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.80 to COMAR 31.11.05 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-801, Annotated Code of Maryland

COMAR 31.11.05.04 Required Coverage.

A. The coverages provided by the required health insurance options shall include, but are not limited to:

(1) The institutional and professional care expenses for nursing home care alone, or in addition to intermediate or custodial nursing care, while confined in a nursing home or other custodial care facility or institution; and

(2) Expenses for the type of care described in §A(1) of this regulation for an insured who is not confined to a facility or institution.

B. The insurer may establish reasonable limits on the benefits offered for the above coverages including, but not limited to, copayments, deductibles, and maximum annual and lifetime limits.

History

Administrative History: Effective date: December 28, 1987 (14:26 Md. R. 2745)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.80 to COMAR 31.11.05 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 14-124(b), and 15-801, Annotated Code of Maryland

31.11.06 Comprehensive Standard Health Benefit Plan

COMAR 31.11.06.01 Scope.

A. This chapter applies to all carriers that offer the comprehensive standard health benefit plan to the small employer market.

B. This chapter identifies the uniform benefits which must be offered in a comprehensive standard health benefit plan which a carrier offers to a Maryland small employer if the policy is issued or renewed after June 30, 1994. A carrier participating in the small employer market shall market this plan to all employers with as few as two eligible employees and as many as 50 eligible employees.

C. With the exception set forth in §D of this regulation, a carrier may offer the plan through one or more of the following delivery systems:

(1) Indemnity;

(2) Preferred provider;

(3) Point-of-service delivered in conjunction with an indemnity or preferred provider delivery system;

(4) A health maintenance organization;

(5) A high deductible health maintenance organization;

(6) A triple option point-of-service;

(7) An HSA-compatible delivery system; or

(8) An exclusive provider.

D. This chapter also specifies the uniform cost-sharing arrangements of the plan applicable to each delivery system. This chapter permits carriers to offer additional benefits or lower cost-sharing arrangements by marketing one or more riders to the plan at an additional cost.

E. A carrier that offers the comprehensive standard health benefit plan to an eligible employer shall offer the plan to all eligible employees. An eligible employer may, at the employer's election, direct the carrier to offer the comprehensive standard health benefit plan to the employer's part-time employees and those employees covered by other public or private health benefit plans or health benefit arrangements, and to all dependents.

F. This chapter includes case management for medically complex and costly services to assure adequate cost containment and appropriate utilization to maximize the affordability of the comprehensive standard health benefit plan to the small employer market.

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Anniversary date” means the date that is the same date, excluding year, as the effective date of the health benefit plan.

(2) “Carrier” has the meaning stated in Insurance Article, §15-1201(c), Annotated Code of Maryland.

(3) “Case management” means a form of utilization review used with high cost cases to monitor and manage treatment and suggest appropriate medical services.

(4) “Chlamydia screening test” has the meaning stated in Insurance Article, §15-829, Annotated Code of Maryland.

(5) “Coinsurance percentage” or “coinsure” means the percentage of allowable charges allocated to the carrier and to the covered person.

(6) “Congenital or genetic birth defect” means a defect existing at or from birth, including a hereditary defect, which includes, but is not limited to, autism or an autism spectrum disorder and cerebral palsy.

(7) “Controlled clinical trial” means a treatment that is:

(a) Approved by an institutional review board;

(b) Conducted for the primary purpose of determining whether or not a particular treatment is safe and efficacious; and

(i) An institute or center of the National Institutes of Health,

(ii) The Food and Drug Administration,

(iii) The Department of Veterans' Affairs, or

(iv) The Department of Defense.

(8) “Covered person” means an employee or a dependent of an employee covered by a carrier under the comprehensive standard health benefit plan.

(9) “Copayment” means a specified charge that a covered person must pay each time services of a particular type or in a designated setting are received.

(10) “Deductible” means the amount of allowable charges that must be incurred by an individual or a family per year before a carrier begins payment.

(11) “Delivery system” means the method that a carrier uses to provide the comprehensive standard health benefit plan to covered persons.

(12) “Dependent” means a covered person's lawful spouse or dependent child.

(13) Dependent Child.

(a) For plan years beginning before September 23, 2010, “dependent child” means an individual who is unmarried, younger than 25 years old, a dependent of the covered employee as that term is used in 26 U.S.C §§104, 105, and 106, and any regulations adopted under those sections, and is a:

(i) Biological child, stepchild, grandchild, or foster child of the covered employee;

(ii) Lawfully adopted child of the covered employee, or, from the date of placement, a child in the process of being adopted by the covered employee;

(iii) Child for whom the covered employee has been granted legal custody, including custody as a result of a guardianship, other than a temporary guardianship of less than 12 months duration, by a court or testamentary appointment; or

(iv) Child for whom the covered person has the legal obligation to provide coverage pursuant to court order, court-approved agreement, or testamentary appointment.

(b) For plan years beginning on or after September 23, 2010, “dependent child” means an individual who is younger than 26 years old and is a:

(i) Biological child, stepchild, grandchild, or foster child of the covered employee;

(ii) Lawfully adopted child of the covered employee or, from the date of placement, a child in the process of being adopted by the covered employee;

(iv) Child for whom the covered person has the legal obligation to provide coverage pursuant to a court-ordered, court-approved agreement, or testamentary appointment.

(c) Notwithstanding the age limitation stated in §B(13)(a) and (b) of this regulation, “dependent child” includes an unmarried child who is dependent upon the covered employee for more than 50 percent of the child’s support and who, at the time of reaching the age limitation set forth in §B(13)(a) or (b) of this regulation, is incapable of self-support because of mental or physical incapacity that began before the dependent child’s attaining the limiting age.

(14) “Domiciliary care” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(15) “Durable medical equipment” means equipment furnished by a supplier or a home health agency that:

(a) Can withstand repeated use;

(b) Is primarily and customarily used to serve a medical purpose;

(d) Is appropriate for use in the home.

(16) “Eligible employee” has the meaning stated in Insurance Article, §15-1201(e), Annotated Code of Maryland.

(17) “Emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) so that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:

(a) Placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy;

(b) Serious impairment to bodily functions; or

(18) “Emergency services” means, with respect to an emergency medical condition:

(a) A medical screening examination (as required under section 1867 of the Social Security Act, 42 U.S.C. 1395dd) that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate the emergency medical condition; and

(b) Such further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the Social Security Act (42 U.S.C. 1395dd(e)(3)).

(19) “Exclusive provider” means a delivery system offered by an insurer or nonprofit health service plan that provides services to a covered person through preferred providers in accordance with Insurance Article, §14-205.1, Annotated Code of Maryland.

(20) Experimental Services.

(a) “Experimental services” means services that are not recognized as efficacious as that term is defined in the edition of the Institute of Medicine Report on Assessing Medical Technologies that is current when the care is rendered.

(b) “Experimental services” do not include controlled clinical trials as defined in §B(7) of this regulation.

(21) “Family” means:

(a) An individual and spouse;

(b) An individual and dependent minor or minors; or

(22) “Family planning services” means counseling, implanting or fitting birth control devices, and follow-up visits after a covered person selects a birth control method.

(23) “Federally qualified health maintenance organization” means a health maintenance organization which meets the requirements of Title XIII of the Public Health Service Act, 42 U.S.C. §3000e et seq.

(24) “Habilitative services” means services, including occupational therapy, physical therapy, and speech therapy, for the treatment of children with congenital and genetic birth defects to enhance the child's ability to function.

(25) “Health benefit plan” has the meaning stated in Insurance Article, §15-1201(f), Annotated Code of Maryland.

(26) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(27) “Health care facility” has the meaning stated in Health-General Article, §19-114, Annotated Code of Maryland.

(28) “Home health care” means the continued care and treatment of a covered person in the home if:

(a) The institutionalization of the covered person in a hospital or related institution or skilled nursing facility would otherwise have been required if home health care were not provided; and

(b) The plan of treatment covering the home health care service is established and approved in writing by the health care practitioner.

(29) “Hospice care” has the meaning stated in 42 U.S.C. §1395x(dd).

(30) “Health care practitioner” has the meaning stated in Health-General Article, §19-132, Annotated Code of Maryland.

(31) “Health savings account” means a health savings account as defined in the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Title 12, §1201(a) as codified at Part VII, subchapter B, chapter 1, §223(d) of the Internal Revenue Code of 1986.

(32) “Health savings account compatible delivery system” or “HSA-compatible delivery system” means a health benefit plan which:

(a) To be used with a health savings account, meets the requirements of a high deductible health plan as defined in the Medicare Prescription Drug, Improvement and Modernization Act of 2003, codified at §223(c)(2) of the Internal Revenue Code of 1986; and

(b) May be:

(i) A preferred provider organization delivery system to be used with a health savings account (PPO-HSA);

(ii) A health maintenance organization delivery system to be used with a health savings account (HMO-HSA); or

(iii) An exclusive provider delivery system to be used with a health savings account (EPO-HSA).

(33) “Indemnity” means a delivery system in which:

(a) Payment is made on an expense-incurred basis; and

(b) The covered person's choice of health care practitioner is not limited to a network of providers.

(34) “Insulin-using beneficiary” means a beneficiary who uses insulin as part of a treatment plan prescribed by the beneficiary's medical care provider.

(35) “Insurer” has the meaning stated in Insurance Article, §1-101(v), Annotated Code of Maryland.

(36) “Late enrollee” has the meaning stated in Insurance Article, §15-1201(h), Annotated Code of Maryland.

(37) “Lifetime maximum” means the maximum amount the carrier is obligated to pay for all services in the lifetime of a covered person.

(38) “Limited out-of-network additional benefit” means an additional benefit offered by an insurer or nonprofit health service plan that:

(a) Permits a covered person enrolled in an exclusive provider delivery system to receive certain health care services out-of-network that would be covered in network; and

(b) Conditions the payment of benefits as required under Insurance Article, §14-205.1, Annotated Code of Maryland.

(39) “Maintenance drug” has the meaning set forth in Insurance Article, §15-824(a)(3), Annotated Code of Maryland.

(40) “Managed care system” means a method that a carrier uses to review and preauthorize a treatment plan that a health care practitioner develops for a covered person using a variety of cost containment methods to control utilization, quality, and claims.

(41) “Mandated benefit” means:

(a) A health care service, benefit, coverage, or reimbursement for covered health care services that is required under the Insurance Article or the Health-General Article, Annotated Code of Maryland, to be provided or offered in a health benefit plan that is issued or delivered in the State by a carrier; or

(b) Reimbursement, required by statute, by a health benefit plan for a service when that service is performed by a care provider who is licensed under the Health Occupations Article and whose scope of practice includes that service.

(42) “Multiple risk factors” has the meaning stated in Insurance Article, §15-829, Annotated Code of Maryland.

(43) “Network” means providers who have entered into a provider service contract with a carrier to provide services on a preferential basis.

(44) “Out-of-network option” means an additional benefit offered by an insurer or nonprofit health service plan that:

(a) Permits a covered person enrolled in an exclusive provider delivery system to receive any healthcare service that would be covered from network providers also to be covered when received from non-network providers; and

(b) Conditions the payment of benefits as required under Insurance Article, §14-205.1, Annotated Code of Maryland.

(45) “Out-of-pocket limit” means the maximum amount of copayments, deductibles, and coinsurance that an individual or family is obligated to pay for covered services per contract year.

(46) “Outpatient rehabilitative services” means occupational therapy, speech therapy, and physical therapy, provided to covered persons not admitted to a hospital or related institution.

(47) “Partial hospitalization” means the provision of medically directed intensive or intermediate short-term psychiatric treatment for a period of less than 24 hours but more than 4 hours in a day for an individual patient in a hospital, psychiatric day-care treatment center, or community mental health facility.

(48) “Personal care” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(49) “Plan” means the comprehensive standard health benefit plan described in this chapter.

(50) “Plan year” means a 12-month period that begins:

(a) For the first year of the plan, on the effective date of the plan; and

(b) For plans that have been in effect for 1 year or longer, on the anniversary date of the plan.

(51) “Point-of-service (POS)” means a delivery system that permits a covered person to receive services outside the network in accordance with the recommendations of the primary care physician within a managed care system.

(52) “Point-of-service option” means an additional benefit offered by a health maintenance organization that permits a covered person enrolled in a health maintenance organization to receive any health care service outside the provider panel of the health maintenance organization that is covered under the covered person's contract with the health maintenance organization.

(53) “Preferred provider organization” means a delivery system offered by an insurer or nonprofit health service plan that provides services to a covered person through a network and permits the covered person to select services outside the network.

(54) “Preexisting condition” has the meaning stated in Insurance Article, §15-1201(k), Annotated Code of Maryland.

(55) “Primary care” means services rendered by a health care practitioner in the following disciplines:

(a) General internal medicine;

(b) Family practice medicine;

(d) Obstetrics/gynecology.

(56) “Provider” means a health care practitioner or a health care facility licensed or otherwise authorized by law to provide health care services.

(57) “Related institution” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(58) “Religious organization” means an entity that is organized and operated exclusively for religious purposes and has obtained a tax exemption under §501(c)(3) of the U.S. Internal Revenue Code.

(59) “Residential crisis services” means intensive mental health and support services that are:

(a) Provided to a child or an adult with a mental illness who is experiencing or is at risk of a psychiatric crisis that would impair the individual's ability to function in the community;

(b) Designed to prevent a psychiatric inpatient admission, provide an alternative to psychiatric inpatient admission, or shorten the length of inpatient stay;

(d) Provided by entities that are licensed by the Maryland Department of Health to provide residential crisis services.

(60) “Service” means a health care diagnosis, procedure, treatment, or item.

(61) “Skilled nursing facility” means an institution, or a distinct part of an institution, licensed by the Maryland Department of Health, which is:

(a) Primarily engaged in providing:

(i) Skilled nursing care, and related services, for residents who require medical or nursing care, or

(ii) Rehabilitation services for the rehabilitation of injured, disabled, or sick persons; and

(b) Certified by the Medicare Program as a skilled nursing facility.

(62) “Small employer” has the meaning stated in Insurance Article, §15-1201(o), Annotated Code of Maryland.

(63) “Specialty services” means care provided by a health care practitioner who is not providing primary care services.

(64) “Triple option point-of-service (triple option POS)” means a delivery system that permits a covered person to select an indemnity, preferred provider, or health maintenance organization delivery system at the time of medical need.

Cross References

31.11.06.07D

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.03 Covered Services.

A. The comprehensive standard health benefit plan includes the following:

(1) Care in medical offices for treatment of illness or injury;

(2) Inpatient hospital services;

(3) Outpatient hospital services;

(4) Inpatient mental health and substance abuse services provided through a carrier's managed care system, including residential crisis services, up to a maximum of 60 days per covered person per year in a hospital, related institution, or entity licensed by the Maryland Department of Health to provide residential crisis services;

(5) Outpatient mental health and substance abuse services provided through a carrier's managed care system;

(6) Emergency services;

(7) Detoxification in a hospital or related institution;

(8) Ambulance services to or from the nearest hospital where needed medical services can appropriately be provided;

(9) Except for prostate cancer screening for men between 40 and 75 years old, and colorectal screening for men and women 50 years old or older, preventive services recommended in the report of the United States Preventive Services Task Force, Guide to Clinical Preventive Services, which is current when the services are rendered, and any other preventive service required to be offered by a federally qualified health maintenance organization;

(9-1) Prostate cancer screening shall be covered as set forth in the current recommendations of the American Cancer Society, which recommends an annual:

(a) Digital rectal examination for both prostate and colorectal cancer, beginning at age 40;

(b) PSA screening for African-American men and all men 40 years old and older with a family history of prostate cancer; and

(9-2) Colorectal screening shall be covered for men and women 50 years old or older as follows:

(a) A yearly fecal occult blood test, accompanied by digital rectal examination, plus flexible sigmoidoscopy every 5 years;

(b) A colonoscopy, accompanied by digital rectal examination, every 10 years; or

(10) Mammography services for persons ages 40 to 49 once every other calendar year, and for ages 50 and above once per calendar year;

(11) Home health care services:

(a) As an alternative to otherwise covered services in a hospital or related institution; and

(b) For contracts issued or renewed on or after November 1, 1999, for covered persons who receive less than 48 hours of inpatient hospitalization following a mastectomy or removal of a testicle or who undergo a mastectomy or removal of a testicle on an outpatient basis:

(i) One home visit scheduled to occur within 24 hours after discharge from the hospital or outpatient health care facility; and

(ii) An additional home visit if prescribed by the covered person's attending physician;

(12) Hospice care services;

(13) Durable medical equipment, including nebulizers, peak flow meters, prosthetic devices such as leg, arm, back, or neck braces, artificial legs, arms, or eyes, and the training necessary to use these prostheses;

(14) Outpatient laboratory and diagnostic services;

(15) Outpatient rehabilitative services provided through a carrier's managed care system for a maximum of:

(a) 30 physical therapy visits per condition per year;

(b) 30 speech therapy visits per condition per year;

(d) When provided by a federally qualified health maintenance organization, the outpatient rehabilitation service coverage specified in 42 CFR §417.101(a)(2)(iii).

(16) Chiropractic services up to 20 visits per condition per year;

(17) Skilled nursing facility services as an alternative to medically necessary inpatient hospital services up to a maximum of 100 days per year;

(18) Infertility services, except for those services excluded in this chapter;

(19) Nutritional services for the treatment of cardiovascular disease, diabetes, malnutrition, cancer, cerebral vascular disease, or kidney disease up to a maximum of six visits per year per condition;

(20) Autologous and nonautologous bone marrow, cornea, kidney, liver, heart, lung, heart/lung, pancreas, and pancreas/kidney transplants;

(21) Medical food for persons with metabolic disorders when ordered by a health care practitioner qualified to provide diagnosis and treatment in the field of metabolic disorders;

(22) Family planning services, including:

(a) Prescription contraceptive drugs or devices;

(b) Coverage for the insertion or removal of contraceptive devices;

(d) Voluntary sterilization;

(23) Except for habilitative services provided in early intervention and school services, habilitative services for children 0—19 years old for the treatment of congenital or genetic birth defects;

(24) All cost recovery expenses for blood, blood products, derivatives, components, biologics, and serums to include autologous services, whole blood, red blood cells, platelets, plasma, immunoglobulin, and albumin;

(25) Pregnancy and maternity services, including abortion;

(26) Prescription drugs;

(27) Controlled clinical trials;

(28) Any other service approved by a carrier's case management program;

(29) Diabetes treatment, equipment, and supplies; and

(30) Breast reconstructive surgery as specified in Insurance Article, §15-815, Annotated Code of Maryland, and breast prosthesis;

(31) Audiology screening for newborns, limited to one screen and one confirming screen; and

(32) General anesthesia and associated hospital or ambulatory facility charges in conjunction with dental care provided to the following:

(a) Individuals who are 7 years old or younger or developmentally disabled and for whom a:

(i) Successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual, or other medically compromising condition of the enrollee or insured; and

(ii) Superior result can be expected from dental care provided under general anesthesia;

(b) Individuals 17 years old or younger who:

(i) Are extremely uncooperative, fearful, or uncommunicative;

(ii) Have dental needs of such magnitude that treatment should not be delayed or deferred; and

(iii) Are individuals for whom lack of treatment can be expected to result in oral pain, infection, loss of teeth, or other increased oral or dental morbidity;

(33) An annual chlamydia screening test for:

(a) Women who are:

(i) Younger than 20 years old who are sexually active; or

(ii) At least 20 years old who have multiple risk factors; and

(b) Men who have multiple risk factors;

(34) The cost to beneficiaries of hearing aids for persons 0 to 18 years of age, up to $1,400 per hearing aid for each hearing-impaired ear every 36 months; and

(35) The surgical treatment of morbid obesity as specified in Insurance Article, §15-839, Annotated Code of Maryland.

A-1. Morbid Obesity.

(1) When establishing utilization review criteria for the surgical treatment of morbid obesity, a carrier or a private review agent acting on behalf of a carrier shall adhere to the requirements of COMAR 31.10.33.03.

(2) Surgical treatment of morbid obesity shall occur in a facility that is:

(a) Designated by the American Society for Metabolic and Bariatric Surgery as a Bariatric Surgery Center of Excellence; and

(b) Designated by the carrier.

(3) If a carrier does not make a designation under §A-1(2) of this regulation, the carrier shall provide benefits under the health benefit plan for the surgical treatment of morbid obesity at any facility that is designated by the American Society for Metabolic and Bariatric Surgery as a Bariatric Surgery Center of Excellence.

B. The services described in §A(23) of this regulation shall be delivered through a carrier's managed care system and shall include services for cleft lip and cleft palate, orthodontics, oral surgery, otologic, audiological, and speech therapy, physical therapy, and occupational therapy for children 0—19 years old for treatment of congenital or genetic birth defects.

C. All mental health and substance abuse services described in §A(4) and (5) of this regulation shall be delivered through a carrier's managed care system.

D. Rehabilitative services and habilitative services required to be offered in the plan shall be provided through the carrier's managed care system.

E. Prescription Drugs.

(1) Carriers shall cover prescription drugs and may, for brand name drugs, use a formulary which complies with the requirements of Insurance Article, §15-831, Annotated Code of Maryland.

(2) Carriers shall cover insulin and birth control drugs.

(3) Except as provided in §E(4) of this regulation, coverage under §A(26) of this regulation of prescription drugs includes up to a 90-day supply of maintenance drugs dispensed in a single dispensing of a prescription.

(4) Coverage of up to a 90-day supply of maintenance drugs in a single dispensing is not required for the first prescription of a maintenance drug or a change in a prescription of a maintenance drug.

F. The carrier shall provide benefits for the covered services in accordance with the terms of the contract, if:

(1) The service is rendered by a health care practitioner who is licensed under the laws of the state in which the practitioner is practicing; and

(2) The health care practitioner is practicing within the scope of the license.

G. Under §A(4) of this regulation, two partial hospitalization days may be substituted for one inpatient day in a hospital or related institution.

H. Under §A(29) of this regulation, diabetes equipment includes glucose monitoring equipment under the durable medical equipment coverage for insulin-using beneficiaries. Insulin pumps are not included. Diabetes supplies include coverage for insulin syringes and needles and testing strips for glucose monitoring equipment under the prescription coverage for insulin-using beneficiaries.

I. Under §A(30) of this regulation, breast prosthesis and breast reconstruction on the nondiseased breast to achieve symmetry is covered regardless of the patient's insurance status at the time of the mastectomy or the time lag between the mastectomy and reconstruction.

J. Under §A(32) of this regulation:

(1) Carriers may require prior authorization for covered services and associated charges in the same manner that prior authorization is required for these benefits in connection with other covered medical care;

(2) Carriers may restrict coverage to dental care that is provided by a:

(a) Fully accredited specialist in pediatric dentistry;

(b) Fully accredited specialist in oral and maxillofacial surgery; and

(3) Dental care for which general anesthesia is required is not covered.

Cross References

31.11.06.05A(3)

31.11.06.05B(3)

31.11.06.06A

31.11.06.06B(23)

31.11.06.06B(35)

31.11.14.02B(7)

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.03-1 Covered Services — Preventive Care Services.

A. This regulation applies to plans with plan years that begin on or after September 23, 2010.

B. The benefits required by Regulation .03A(9), (9-1), (9-2), (10), (31) and (33), Regulation .04F(5)(e) and (6)(e), and Regulation .05I of this chapter do not apply to plans with plan years that begin on or after September 23, 2010.

C. Plans that are subject to this regulation shall provide benefits for the following preventive care services:

(1) Except as provided in §D of this regulation, evidence–based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force;

(2) Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved;

(3) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration; and

(4) With respect to women, to the extent not described in §C(1) of this regulation, evidence-informed preventive care and screenings as provided for in comprehensive guidelines supported by the Health Resources and Services Administration.

D. For the purposes of §C(1) of this regulation, recommendations of the United States Preventive Services Task Force regarding breast cancer screening, mammography, and prevention issued in or around November 2009 are not considered to be current.

E. For the purposes of §C(2) of this regulation, a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention is considered to be:

(1) In effect after it has been adopted by the director of the Centers for Disease Control and Prevention; and

(2) For routine use if it is listed on the immunization schedules of the Centers for Disease Control and Prevention.

F. Cost Sharing Requirements.

(1) Except as described §F(2) and (3) of this regulation, a carrier may not impose any cost sharing requirements, such as copayment amounts, coinsurance amounts, or deductible amounts, on the preventive care services required under §C of this regulation.

(2) If a carrier’s plan permits individuals covered under the plan to receive services from nonparticipating providers, the carrier may impose a carrier’s coinsurance percentage of 60 percent of allowable charges.

(3) If a new recommendation or guideline described in §C of this regulation is issued after the effective date of the plan, the new recommendation or guideline shall apply the first plan year that begins on the date that is 1 year after the date the recommendation or guideline is issued.

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.04 Uniform Cost-Sharing Arrangements — In General.

A. For each delivery system identified in §F of this regulation, a carrier shall apply the uniform cost-sharing arrangements specified.

B. Copayments.

(1) Except for copayments for emergency services, which a carrier shall apply to the deductible and the out-of-pocket limit, a carrier may not apply the copayments set forth in this chapter to reduce the amount of a deductible or out-of-pocket limit.

(2) Notwithstanding §B(1) of this regulation, a carrier shall apply all copayments set forth in this chapter to reduce the amount of a deductible or out-of-pocket limit for a HSA-compatible delivery system.

C. A carrier shall apply the covered person's coinsurance amount and emergency services copayments to the deductible and out-of-pocket limit.

D. A carrier shall apply the deductible to the out-of-pocket limit.

E. A carrier may increase deductibles, copayments, coinsurance, or out-of-pocket limits up to 1.5 times the amounts specified in §F of this regulation in accordance with Insurance Article, §15-1208, Annotated Code of Maryland.

F. For each of the delivery systems identified, the following general cost-sharing requirements apply:

(1) Indemnity:

(a) For an employee enrolled under individual coverage, a deductible of $2,500 per year; for an employee enrolled under other than individual coverage, a deductible of $5,000 in aggregate per year;

(b) For an employee enrolled under individual coverage, out-of-pocket limit of $4,900 per year; for an employee enrolled under other than individual coverage, out-of-pocket limit of $9,800 in aggregate per year;

(i) For plan years beginning before September 23, 2010, $2 million per covered person; and

(ii) For plan years beginning on or after September 23, 2010, unlimited;

(d) Carrier's coinsurance percentage of 80 percent of allowable charges;

(2) Preferred provider organizations:

(a) Non-health savings account-compatible preferred provider organizations (PPO):

(i) For an employee enrolled under individual coverage, combined in-network and out-of-network deductible of $2,500 per year; for an employee enrolled under other than individual coverage, combined in-network and out-of-network deductible of $5,000 in aggregate per year;

(ii) For an employee enrolled under individual coverage, combined in-network and out-of-network out-of-pocket limit of $4,900 per year; for an employee enrolled under other than individual coverage, combined in-network and out-of-network out-of-pocket limit of $9,800 in aggregate per year;

(b) PPO-HSA:

(i) For an employee enrolled under individual coverage, combined in-network, out-of-network, and prescription drug deductible of $2,700 per year; for an employee enrolled under other than individual coverage, combined in-network, out-of-network, and prescription drug deductible of $5,450 in aggregate per year;

(ii) For an employee enrolled under individual coverage, combined in-network and out-of-network out-of-pocket limit of $5,250 per year; for an employee enrolled under other than individual coverage, combined in-network and out-of-network out-of-pocket limit of $10,500 in aggregate per year;

(iii) For the health savings account-compatible preferred provider, carriers may not offer additional benefits to reduce deductibles below the minimum deductibles required by federal law or raise out-of-pocket limits above the maximum out-of-pocket limits required by federal law;

(d) Lifetime maximum of:

(i) For plan years beginning before September 23, 2010, $2 million per covered person; and

(ii) For plan years beginning on or after September 23, 2010, unlimited;

(e) Carrier's coinsurance percentage of 80 percent of allowable charges for in-network services;

(f) Carrier's coinsurance percentage of 60 percent of allowable charges for out-of-network services;

(3) Point-of-service when delivered in conjunction with preferred provider:

(a) For an employee enrolled under individual coverage, a deductible of $2,500 per year; for an employee enrolled under other than individual coverage, a deductible of $5,000 in aggregate per year;

(b) For an employee enrolled under individual coverage, combined in-network and out-of-network out-of-pocket limit of $4,900 per year; for an employee enrolled under other than individual coverage, combined in-network and out-of-network out-of-pocket limit of $9,800 in aggregate per year;

(i) For plan years beginning before September 23, 2010, $2 million per covered person; and

(ii) For plan years beginning on or after September 23, 2010, unlimited;

(d) Carrier's coinsurance percentage of 80 percent of allowable charges for in-network services;

(e) Carrier's coinsurance percentage of 60 percent of allowable charges for out-of-network services;

(4) Health maintenance organization-non-health savings account compatible delivery system:

(a) A covered person shall be responsible for copayments for the following services at the payment level indicated:

(i) Primary care services—$30;

(ii) Specialty care services—$40;

(iii) Physician inpatient hospital visits—$30;

(iv) Outpatient laboratory services—$40 or 50 percent of the cost of the service, whichever is less;

(v) Outpatient diagnostic services—$40 or 50 percent of the cost of the service, whichever is less; and

(vi) Inpatient hospital copayment—$1,000 per admission;

(b) For an employee enrolled under individual coverage, the out-of-pocket limit is 200 percent of the total annual premium as specified by a fixed dollar amount in the employee's certificate;

(c) For an employee enrolled under other than individual coverage, the out-of-pocket limit is 200 percent of the total annual premium in aggregate as specified by a fixed dollar amount in the employee's certificate;

(d) Under the mandatory POS option, carrier's coinsurance percentage of at least 60 percent of allowable charges for out-of-network services;

(5) High deductible health maintenance organization—non-health savings account compatible delivery system:

(a) Except as described in §F(5)(e) of this regulation, for an employee enrolled under individual coverage, combined in-network and out-of-network deductible of $2,500 per year; for an employee enrolled under other than individual coverage, combined in-network and out-of-network deductible of $5,000 in aggregate per year;

(c) After the deductible described in §F(5)(a) of this regulation is satisfied, the covered person shall be responsible for copayments for the following services at the payment level indicated:

(i) Primary care services—$30;

(ii) Specialty care services—$40;

(iii) Physician inpatient hospital visits—$30;

(iv) Outpatient laboratory services—$40 or 50 percent of the cost of the service, whichever is less;

(v) Outpatient diagnostic services—$40 or 50 percent of the cost of the service, whichever is less; and

(vi) Inpatient hospital copayment—$1,000 per admission;

(d) Under the mandatory POS option, the carrier's coinsurance percentage shall be at least 60 percent of allowable charges for out-of-network services; and

(e) Well-child care and immunization benefits provided in conjunction with the high deductible health maintenance organization—non-health savings account compatible delivery system shall be subject to a $10 copayment and not subject to the overall deductible;

(6) HMO-HSA:

(a) Except as described in §F(6)(e) of this regulation, combined annual deductible for all covered services, including prescription drugs, of $2,700 for an employee enrolled in individual coverage and $5,450 in aggregate for an employee enrolled in other than individual coverage;

(b) The out-of-pocket limit for all covered services, including prescription drugs, child wellness, and immunization services, shall be subject to the annual out-of-pocket maximum for HSA-compatible delivery systems of $5,250 for employees enrolled as individuals and $10,500 in aggregate for employees enrolled as other than individuals;

(c) After the deductible described in §F(6)(a) of this regulation is satisfied, the covered person shall be responsible for copayments at the payment level indicated:

(i) Primary care services—$30;

(ii) Specialty care services—$40;

(iii) Physician inpatient hospital visits—$30;

(iv) Outpatient laboratory services—$40 or 50 percent of the cost of the service, whichever is less;

(v) Outpatient diagnostic services—$40 or 50 percent of the cost of the service, whichever is less; and

(vi) Inpatient hospital copayment—$1,000 per admission;

(d) Under the mandatory POS option, the carrier's coinsurance percentage shall be at least 60 percent of allowable charges for out-of-network services;

(e) Well-child care and immunization benefits provided in conjunction with the HMO-HSA shall be subject to a $10 copayment and not subject to the overall deductible;

(7) Triple option point-of-service:

(a) For the indemnity portion of the triple option, the general cost-sharing requirements set forth in §F(1) of this regulation shall apply;

(b) For the preferred provider portion of the triple option, the general cost-sharing requirements set forth in §F(2)(a), (e)—(g) of this regulation shall apply;

(c) For the health maintenance organization portion of the triple option, the general cost-sharing requirements set forth in §F(4) of this regulation shall apply;

(d) For plan years beginning before September 23, 2010, a $2 million lifetime maximum per covered person is applicable to the indemnity and preferred provider portions of the triple option;

(e) For plan years beginning on or after September 23, 2010, a lifetime maximum may not apply to the indemnity and preferred portions of the triple option;

(f) A lifetime maximum may not apply to the health maintenance organization portion of the triple option;

(8) Exclusive provider:

(a) Non-health savings account-compatible exclusive provider organization (EPO):

(i) For an employee enrolled under individual coverage, a deductible of $2,500 per year; for an employee enrolled under other than individual coverage, a deductible of $5,000 in aggregate per year;

(ii) For an employee enrolled under individual coverage, an out-of-pocket limit of $4,900 per year; for an employee enrolled under other than individual coverage, an out-of-pocket limit of $9,800 in aggregate per year;

(b) EPO-HSA:

(i) For an employee enrolled under individual coverage, a deductible of $2,700 per year; for an employee enrolled under other than individual coverage, a deductible of $5,450 in aggregate per year;

(ii) For an employee enrolled under individual coverage, an out-of-pocket limit of $5,250 per year; for an employee enrolled under other than individual coverage, an out-of-pocket limit of $10,500 in aggregate per year;

(iii) For the health savings account-compatible exclusive provider organization, carriers may not offer additional benefits to reduce deductibles below the minimum deductibles required by federal law or raise out-of-pocket limits above the maximum out-of-pocket limits required by federal law;

(d) There shall be a lifetime maximum of:

(i) For plan years beginning before September 23, 2010, $2 million per covered person; and

(ii) For plan years beginning on or after September 23, 2010, unlimited;

(e) There shall be a carrier's coinsurance percentage of 80 percent of allowable charges for covered services;

(f) Under the mandatory out-of-network option described in Regulation .08 of this chapter, there shall be a carrier's coinsurance percentage of at least 60 percent of allowable charges for out-of-network services.

Cross References

31.11.06.05C

31.11.06.05D

31.11.06.05E(2)(a)

31.11.06.05E(2)(b)

31.11.06.05G

31.11.06.05H(1)

31.11.06.05I(1)(d)

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.05 Uniform Cost-Sharing Arrangements — Specific Services.

A. General Cost-Sharing Arrangement for Outpatient Mental Health and Substance Abuse Services.

(1) Except as provided in §B of this regulation, for outpatient mental health and substance abuse, the carrier shall pay for each service 70 percent of allowable charges.

(2) A carrier may substitute a copayment for these services at an actuarially equivalent amount to the coinsurance percentages described in this regulation subject to the approval of the Insurance Commissioner and the Maryland Health Care Commission.

(3) For purposes of the cost-sharing arrangement set forth in §A(1) of this regulation, a carrier shall treat a visit made solely for medication management purposes for mental health or substance abuse treatment as a covered service under Regulation .03A(1) of this chapter and may not count the visit as a mental health or substance abuse service described in Regulation .03A(5) of this chapter.

B. Out-of-Network Cost-Sharing Arrangements for Outpatient Mental Health and Substance Abuse Services.

(1) For outpatient services for mental health and substance abuse received out-of-network in a preferred provider organization delivery system or point-of-service delivery system, triple option delivery system, or HSA-compatible delivery system, the carrier shall pay for each service 50 percent of allowable charges.

(3) For purposes of the uniform cost-sharing arrangements set forth in §B(1) of this regulation, a carrier shall treat a visit made solely for medication management purposes for mental health or substance abuse treatment as a covered service under Regulation .03A(1) and may not count the visit as a mental health or substance abuse service described in Regulation .03A(5) of this chapter.

C. For outpatient services or surgery, the covered person shall pay a $40 copayment or the coinsurance percentage applicable under Regulation .04F of this chapter, whichever is greater, but not greater than the charges.

D. Except for health maintenance organizations, for outpatient laboratory or diagnostic services, the covered person shall pay a $40 copayment or the coinsurance percentage applicable under Regulation .04F of this chapter, whichever is greater, but not greater than the charges.

E. For emergency services, the covered person shall pay:

(1) A $100 copayment, which the carrier shall waive if the covered person is admitted to the hospital; and

(2) For coinsurance the:

(a) Amount applicable for indemnity or exclusive provider under Regulation .04F of this chapter; or

(b) In-network amount for preferred provider, point-of-service and triple option point-of-service under Regulation .04F of this chapter.

F. For infertility services obtained after the diagnosis of infertility has been confirmed, a carrier shall coinsure 50 percent of allowable charges.

G. For skilled nursing facility services, a covered person shall pay a $40 per day copayment or the coinsurance percentage applicable under Regulation .04F of this chapter, whichever is greater.

H. For prescription drugs:

(1) Persons in a non-HSA-compatible delivery system with individual coverage shall pay a $2,500 deductible, and persons with non-individual coverage a $5,000 in aggregate deductible separate from the deductibles set forth in Regulation .04F of this chapter;

(2) Persons enrolled under a HSA-compatible delivery system shall satisfy the deductible set forth in Regulation .04F(2)(b) or (6) of this chapter as a prerequisite to receiving prescription drug benefits;

(3) After paying the applicable deductible, each covered person shall pay a 75% coinsurance percentage.

I. Well-Child Visits Cost-Sharing.

(1) For well-child visits, a covered person shall pay:

(a) Only a $10 copayment for all visits for children 0—24 months of age in a health maintenance organization or indemnity delivery system and for in-network services in a preferred provider delivery system, point-of-service delivery system, triple-option delivery system, HSA-compatible delivery system, or an exclusive provider delivery system;

(b) Only a $10 copayment for visits that include immunization for children older than 24 months through 13 years of age in a health maintenance organization or indemnity delivery system and for in-network services in a preferred provider delivery system, point-of-service delivery system, triple-option point-of-service delivery system, HSA-compatible delivery system, or an exclusive provider delivery system;

(c) For out-of-network services in a preferred provider delivery system, point-of-service delivery system, triple-option point-of-service delivery system, or HSA-compatible delivery system, in accordance with the uniform cost-sharing arrangements described in Regulation .04F(2), (3), and (7) of this chapter; and

(d) For all other visits in accordance with uniform cost-sharing arrangements described in Regulation .04 of this chapter for each delivery system.

(2) A carrier may substitute a copayment that is the actuarial equivalent to the amount specified in §I(1)(b) of this regulation for all well-child visits for children 2—13 years old.

J. General Cost-Sharing Arrangements for Outpatient Rehabilitation and Chiropractic Services. Except as provided in §K of this regulation, for outpatient rehabilitation services and chiropractic services, the carrier shall pay 70 percent of the allowable charges, or may substitute a $40 copayment for these services.

K. Out-of-Network Cost-Sharing Arrangements for Outpatient Rehabilitation Services and Chiropractic Services. For outpatient rehabilitation services and chiropractic services received out-of-network in a preferred provider delivery system, point-of-service delivery system, triple option delivery system, or PPO-HSA, the carrier shall pay 50 percent of allowable charges.

Cross References

31.11.06.03-1B

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.06 Limitations and Exclusions.

A. A carrier shall apply the limitations and exclusions specified in §B of this regulation to the covered services specified in Regulation .03 of this chapter.

B. The following are exclusions and limitations to the covered services:

(1) Services that are not medically necessary;

(2) Services performed or prescribed under the direction of a person who is not a health care practitioner;

(3) Services that are beyond the scope of practice of the health care practitioner performing the service;

(4) Services to the extent they are covered by any government unit, except for veterans in Veterans' Administration or armed forces facilities for services received for which the recipient is liable;

(5) Services for which a covered person is not legally, or as a customary practice, required to pay in the absence of a health benefit plan;

(6) The purchase, examination, or fitting of eyeglasses or contact lenses, except for aphakic patients and soft or rigid gas permeable lenses or sclera shells intended for use in the treatment of a disease or injury;

(7) Personal care services and domiciliary care services;

(8) Services rendered by a health care practitioner who is a covered person's spouse, mother, father, daughter, son, brother, or sister;

(9) Experimental services;

(10) Practitioner, hospital, or clinical services related to radial keratotomy, myopic keratomileusis, and surgery which involves corneal tissue for the purpose of altering, modifying, or correcting myopia, hyperopia, or stigmatic error;

(11) In vitro fertilization, ovum transplants and gamete intrafallopian tube transfer, zygote intrafallopian transfer, or cryogenic or other preservation techniques used in these or similar procedures;

(12) Services to reverse a voluntary sterilization procedure;

(13) Services for sterilization or reverse sterilization for a dependent minor;

(14) Medical or surgical treatment or regimen for reducing or controlling weight, unless otherwise specified in the covered services;

(15) Services incurred before the effective date of coverage for a covered person;

(16) Services incurred after a covered person's termination of coverage, including any extension of benefits;

(17) Surgery or related services for cosmetic purposes to improve appearance, but not to restore bodily function or correct deformity resulting from disease, trauma, or congenital or developmental anomalies;

(18) Services for injuries or diseases related to a covered person's job to the extent the covered person is required to be covered by a workers' compensation law;

(19) Services rendered from a dental or medical department maintained by or on behalf of an employer, mutual benefit association, labor union, trust, or similar persons or groups;

(20) Personal hygiene and convenience items, including, but not limited to, air conditioners, humidifiers, or physical fitness equipment;

(21) Charges for telephone consultations, failure to keep a scheduled visit, or completion of any form;

(22) Inpatient admissions primarily for diagnostic studies, unless authorized by the carrier;

(23) The purchase, examination, or fitting of hearing aids and supplies, and tinnitus maskers, except as provided in Regulation .03A(34) of this chapter;

(24) Except for covered ambulance services, travel, whether or not recommended by a health care practitioner;

(25) Except for emergency services, services received while the covered person is outside the United States;

(26) Immunizations related to foreign travel;

(27) Unless otherwise specified in covered services, dental work or treatment which includes hospital or professional care in connection with:

(a) The operation or treatment for the fitting or wearing of dentures,

(b) Orthodontic care or malocclusion,

(c) Operations on or for treatment of or to the teeth or supporting tissues of the teeth, except for removal of tumors and cysts or treatment of injury to natural teeth due to an accident if the treatment is received within 6 months of the accident; and

(d) Dental implants;

(28) Accidents occurring while and as a result of chewing;

(29) Routine foot care, including the paring or removing of corns and calluses, or trimming of nails, unless these services are determined to be medically necessary;

(30) Arch support, orthotic devices, in-shoe supports, orthopedic shoes, elastic supports, or exams for their prescription or fitting, unless these services are determined to be medically necessary;

(31) Inpatient admissions primarily for physical therapy, unless authorized by the carrier;

(32) Treatment leading to or in connection with transsexualism, or sex changes or modifications, including but not limited to surgery;

(33) Treatment of sexual dysfunction not related to organic disease;

(34) Services that duplicate benefits provided under federal, State, or local laws, regulations, or programs;

(35) Organ transplants except those included under Regulation .03 of this chapter;

(36) Nonhuman organs and their implantation;

(37) Nonreplacement fees for blood and blood products;

(38) Lifestyle improvements, including nutrition counseling, or physical fitness programs, unless included as a covered service;

(39) Wigs or cranial prosthesis;

(40) Weekend admission charges, except for emergencies and maternity, unless authorized by the carrier;

(41) Out-patient orthomolecular therapy, including nutrients, vitamins, and food supplements;

(42) Temporomandibular joint syndrome (TMJ) treatment and treatment for craniomandibular pain syndrome (CPS), except for surgical services for TMJ and CPS, if medically necessary and if there is a clearly demonstrable radiographic evidence of joint abnormality due to disease or injury;

(43) Services resulting from accidental bodily injuries arising out of a motor vehicle accident to the extent the services are payable under a medical expense payment provision of an automobile insurance policy;

(44) Services for conditions that State or local laws, regulations, ordinances, or similar provisions require to be provided in a public institution;

(45) Services for, or related to, the removal of an organ from a covered person for purposes of transplantation into another person, unless the:

(a) Transplant recipient is covered under the plan and is undergoing a covered transplant, and

(b) Services are not payable by another carrier;

(46) Physical examinations required for obtaining or continuing employment, insurance, or government licensing;

(47) Nonmedical ancillary services such as vocational rehabilitation, employment counseling, or educational therapy;

(48) Private hospital room, unless authorized by the carrier;

(49) Private duty nursing, unless authorized by the carrier;

(50) Treatment for mental health or substance abuse not authorized by the carrier through its managed care system, or a mental health or substance abuse condition determined by the carrier through its managed care system to be untreatable; and

(51) Services related to smoking cessation.

C. A religious organization may request and a carrier shall grant the request for an exclusion from coverage for a service mandated under the plan if the service is in conflict with the religious organization's bona fide religious beliefs and practices.

D. A religious organization that obtains an exclusion from coverage for a service mandated under the plan shall provide its employees reasonable and timely notice of this exclusion.

E. The carrier's premium rate for the plan may not be affected by the religious organization's exclusions from coverage for a service mandated under the plan.

F. An insurer or non-profit health service plan may impose a preexisting condition exclusion as specified in Regulation .11 of this chapter.

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.07 Additional Benefits.

A. A carrier may offer benefits in addition to the plan only if:

(1) The benefits are offered separately from the plan;

(2) The benefits are priced separately from the plan;

(3) Subject to the provisions of Insurance Article, §15-1213, Annotated Code of Maryland, the benefits are guarantee issued;

(4) Subject to the provisions of Insurance Article, §15-1212, Annotated Code of Maryland, the benefits are guarantee renewed;

(5) Subject to the provisions of Insurance Article, §15-1205, Annotated Code of Maryland, the benefits are community rated; and

(6) The benefits do not duplicate any of the benefits in the plan.

B. An additional benefit that a carrier offers shall meet at least one of the following requirements:

(1) The benefit increases access to care choices available under the plan;

(2) The benefit increases the number of services available to covered persons under the plan;

(3) The benefit increases the frequency that covered persons can obtain specified services under the plan; or

(4) The benefit lowers the uniform cost-sharing arrangements described in Regulations .04 and .05 of this chapter.

C. A health maintenance organization may offer, or may contract with another carrier to offer, a point-of-service option as an additional benefit to the health maintenance organization delivery system or the HMO-HSA delivery system subject to the following requirements:

(1) The point-of-service benefit allows a covered person to obtain services outside the network;

(2) For out-of-network services, the health maintenance organization's coinsurance percentage shall be no less than the percentage of allowable charges specified in Regulations .04F and .05B of this chapter; and

(3) The health maintenance organization may limit the benefits a covered person may obtain outside the network.

D. An insurer or nonprofit health service plan offering an exclusive provider delivery system or an EPO-HSA delivery system specified under this chapter may offer a limited out-of-network additional benefit as defined under Regulation .02 of this chapter as an additional benefit subject to the following requirements:

(1) The limited out-of-network additional benefit allows a covered person to obtain services outside the network;

(2) Except as specified in §D(4) of this regulation, for out-of-network services, the insurer's or nonprofit health service plan's coinsurance may not be less than 60 percent of allowable charges;

(3) The insurer or nonprofit health service plan may limit the benefits a covered person may obtain outside the network; and

(4) For outpatient services for mental health and substance abuse, rehabilitation, and chiropractic services received out-of-network, the insurer's or nonprofit health service plans' coinsurance may not be less than 50 percent of allowable charges.

E. A carrier may offer a rider to cover the services of Christian Science practitioners and Christian Science facilities.

Cross References

31.11.14.04A(1)

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.08 Mandatory Point-of-Service Option or Out-of-Network Option.

A. When a health maintenance organization is the sole delivery system offered to employees by an eligible employer, the health maintenance organization:

(1) Shall offer the employer a mandatory point-of-service option for the individual employee to accept or reject;

(2) May not impose a minimum participation level on the mandatory point-of-service option;

(3) May not limit the benefits a covered person can receive out of network;

(4) As part of the application, shall provide to each eligible employer the following disclosure statement for each point-of-service option offered:

"Under Maryland law, your employees may purchase a point-of-service option as an additional benefit. A point-of-service option allows your employees to obtain health care services from physicians and other providers outside the HMO network under certain circumstances that are described in attachment A.

You have the choice to pay this point-of-service option, pay a percentage of the cost of this option, or require your employees to pay for the entire cost of this option. The cost of the point-of-service option described in attachment A is identified in your proposal. Please indicate below the employees who have chosen this point-of-service option.

I have read and understand this disclosure statement and the attachments and have provided notice of the availability of this additional benefit to my eligible employees."

B. By July 1, 1996, when a carrier's provider panel is the sole delivery system offered to employees by an eligible employer for dental services, the carrier:

(1) Shall offer the employer a mandatory dental point-of-service option for the individual employee to accept or reject;

(2) May not impose a minimum participation level on the mandatory dental point-of-service option;

(3) As part of the application, shall provide to each eligible employer the following disclosure statement for each dental point-of-service option offered:

"Under Maryland law, your employees may purchase a dental point-of-service option as an additional benefit. A dental point-of-service option allows your employees to obtain services from dentists and other providers outside the provider panel under certain circumstances that are described in attachment A.

You have the choice to pay this dental point-of-service option, pay a percentage of the cost of this option, or require your employees to pay for the entire cost of this option. The cost of the dental point-of-service option described in attachment A is identified in your proposal. Please indicate below the employees who have chosen this dental point-of-service option.

I have read and understand this disclosure statement and the attachments and have provided notice of the availability of this additional benefit to my eligible employees."

C. When an exclusive provider delivery system is the sole delivery system offered to employees by an eligible employer, the insurer or nonprofit health service plan:

(1) Shall offer the employer a mandatory out-of-network option for the individual employee to accept or reject;

(2) May not impose a minimum participation level on the mandatory out-of-network option;

(3) May not limit the benefits a covered person can receive from non-preferred providers;

(4) As part of the application, shall provide to each eligible employer the following disclosure statement for each out-of-network option offered:

"Under Maryland law, your employees may purchase an out-of-network option as an additional benefit. An out-of-network option allows your employees to obtain health care services from non-preferred providers under certain circumstances that are described in Attachment A.

You have the choice to pay the cost of this out-of-network option, pay a percentage of the cost of this option, or require your employees to pay for the entire cost of this option. The cost of the out-of-network option described in Attachment A is identified in your proposal. Please indicate below the employees who have chosen this out-of-network option.

I have read and understand this disclosure statement and the attachments and have provided notice of the availability of this additional benefit to my eligible employees."

D. This regulation does not apply to self-employed individuals.

Cross References

31.11.06.04F(8)(f)

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.09 Mandated Benefits.

A. The plan excludes mandated benefits, except for Insurance Article, §§15-123(d), 15-401, 15-407, 15-408, 15-409, 15-412(a)—(h), 15-414, 15-604, 15-701, 15-811, 15-812, 15-815, 15-816, 15-823, 15-839, and 15-10B-09, Annotated Code of Maryland, and Health-General Article, §§19-703(d) and (g), 19-706(h), 19-710.1(b)(1)(ii), and 19-712.5, Annotated Code of Maryland, to the extent those sections are considered mandated benefits.

B. Notwithstanding the mandated benefits included in Regulation .09A of this chapter, the requirements of Insurance Article, §15-812(g), Annotated Code of Maryland, relating to imposition of copayment, coinsurance, or deductibles, are inapplicable to a HSA-compatible delivery system.

C. These regulations do not exclude any requirement contained in statute or regulation that a carrier shall pay hospitals for hospital services rendered in accordance with rates approved by the Health Services Cost Review Commission.

D. A health maintenance organization shall include the conversion benefit required under COMAR 31.12.02.11.

E. Referrals to Specialists. Each carrier:

(1) That does not allow direct access to specialists shall provide for a standing referral to a specialist under the requirements of Insurance Article, §15-830, Annotated Code of Maryland;

(2) Shall provide for a referral to a specialist who is not part of the carrier's panel under the requirements of Insurance Article, §15-830, Annotated Code of Maryland;

(3) [Shall] For plan years beginning before September 23, 2010, shall provide direct access to obstetric and gynecological care as specified in Insurance Article, §15-816, Annotated Code of Maryland; and

(4) For plan years beginning on or after September 23, 2010, shall provide direct access to obstetric and gynecological care as specified in 45 CFR 147.138(a)(3).

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.10 Rates.

A. A carrier shall market the plan in the following compositions:

(1) Individual; and

(2) Individual, spouse, and dependents.

B. In addition to §A of this regulation, a carrier may market the plan in one or more of the following compositions:

(1) Individual and spouse; or

(2) Individual and dependent.

C. For each composition in §§A and B of this regulation, the carrier shall calculate a separate community rate.

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.11 Pre-existing Conditions.

A. A carrier may not apply a preexisting condition provision to health care services for pregnancy or newborns, or to individuals younger than 19 years old.

B. Except as provided in §A of this regulation, for contracts issued or renewed on or after October 1, 2009, an insurer or non-profit health service plan may impose a preexisting condition provision in accordance with Insurance Article, §15-508, Annotated Code of Maryland.

C. A carrier may impose a waiting period from the date of application, in accordance with Insurance Article, §15-1208, Annotated Code of Maryland.

Cross References

31.11.06.06F

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.06.12 Review.

In addition to the requirement set forth in Insurance Article, §15-1207, Annotated Code of Maryland, the Maryland Health Care Commission shall review the plan from time to time. Unless otherwise stated, all changes in the plan made pursuant to this review are effective for contracts issued or renewed after July 1 of the calendar year in which the changes are promulgated.

History

Administrative History: Effective date: April 25, 1994 (21:8 Md. R. 672)
Administrative History: Regulation .02B amended as an emergency provision effective July 1, 1994 (21:13 Md. R. 1151); amended permanently effective November 7, 1994 (21:22 Md. R. 1876)
Administrative History: ——————
Administrative History: Chapter revised effective February 12, 1996 (23:3 Md. R. 167)
Administrative History: Regulation .01 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .02B amended as an emergency provision effective February 2, 1996 (23:4 Md. R. 270); emergency status expired August 2, 1996; amended permanently effective October 21, 1996 (23:21 Md. R. 1467)
Administrative History: Regulation .02B amended as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .02B amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .03A amended and H, I adopted as an emergency provision effective April 1, 1997 (24:9 Md. R. 653); emergency status extended at 24:21 Md. R. 1444; amended permanently effective September 22, 1997 (24:19 Md. R. 1340)
Administrative History: Regulation .03A, D amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .04F amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .05H amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1444); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .05I amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .05I amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08 amended as an emergency provision effective September 30, 1996 (23:21 Md. R. 1464); amended permanently effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .08A amended as an emergency provision effective April 25, 1996 (23:10 Md. R. 729); emergency status extended at 23:18 Md. R. 1314; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended as an emergency provision effective June 1, 1996 (23:13 Md. R. 937); emergency status extended at 23:18 Md. R. 1313; emergency status expired January 16, 1997
Administrative History: Regulation .09A amended effective March 10, 1997 (24:5 Md. R. 407)
Administrative History: Regulation .09A amended as an emergency provision effective October 1, 1997 (24:21 Md. R. 1441); amended permanently effective January 12, 1998 (25:1 Md. R. 15)
Administrative History: Regulation .09A amended as an emergency provision effective December 31, 1997 (25:2 Md. R. 73); amended permanently effective April 6, 1998 (25:7 Md. R. 527)
Administrative History: Regulation .09A amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: Regulation .12 amended effective May 18, 1998 (25:10 Md. R. 746)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.05 to COMAR 31.11.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .01 amended effective April 10, 2006 (33:7 Md. R. 675)
Administrative History: Regulation .01C amended effective April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .02B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489)
Administrative History: Regulation .02B amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .02B amended effective February 28, 2005 (32:4 Md. R. 412); April 10, 2006 (33:7 Md. R. 676); March 24, 2008 (35:6 Md. R. 702); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .02B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulations .03—.08 amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .03 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .03A amended as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .03A amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03A-1 adopted effective April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .03E amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .03-1 adopted as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); adopted permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .04 amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .04B, F amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .04F amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 9, 2007 (34:7 Md. R. 700); March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .04F amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05 amended effective February 5, 2001 (28:2 Md. R. 106); March 15, 2004 (31:5 Md. R. 452); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .05E, I amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .05H amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .05H amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .05H amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .05I amended effective May 3, 1999 (26:9 Md. R. 731)
Administrative History: Regulation .06B amended effective February 7, 2000 (27:2 Md. R. 148); February 5, 2001 (28:2 Md. R. 106); March 18, 2002 (29:5 Md. R. 506); April 14, 2003 (30:7 Md. R. 489); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .06F adopted effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .07 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .07A amended effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .07C amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .08 amended effective March 24, 2008 (35:6 Md. R. 702)
Administrative History: Regulation .09 amended as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); amended permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .09A amended effective March 18, 2002 (29:5 Md. R. 506); April 20, 2009 (36:8 Md. R. 598)
Administrative History: Regulation .09B amended effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09D adopted as an emergency provision effective October 1, 1999 (26:22 Md. R. 1689); emergency status expired February 1, 2000
Administrative History: Regulation .09D adopted effective February 7, 2000 (27:2 Md. R. 148)
Administrative History: Regulation .09D amended effective February 5, 2001 (28:2 Md. R. 106); April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .09E amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .10D adopted as an emergency provision effective May 21, 2004 (31:12 Md. R. 909); adopted permanently effective August 16, 2004 (31:16 Md. R. 1257)
Administrative History: Regulation .10D repealed effective April 10, 2006 (33:7 Md. R. 676)
Administrative History: Regulation .11A, B amended as an emergency provision effective September 23, 2010 (37:23 Md. R. 1608); amended permanently effective January 13, 2011 (38:1 Md. R. 13)
Administrative History: Regulation .11B amended effective November 16, 2009 (36:23 Md. R. 1819)
Administrative History: Regulation .11C amended effective February 28, 2005 (32:4 Md. R. 412); November 16, 2009 (36:23 Md. R. 1819)
Authority: Health-General Article, §§19-103(c)(6), 19-108, and 19-1510; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.07 Small Employer Group Health Insurance — Self-Employed Individuals [Repealed]

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 1996 (23:8 Md. R. 602); adopted permanently effective June 17, 1996 (23:12 Md. R. 870)
Administrative History: Regulation .02B amended as an emergency provision effective June 6, 1997 (24:13 Md. R. 928); amended permanently effective September 8, 1997 (24:18 Md. R. 1295)
Administrative History: Regulation .03 amended as an emergency provision effective October 1, 1996 (23:21 Md. R. 1464); amended permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .04 amended as an emergency provision effective October 1, 1996 (23:21 Md. R. 1464); amended permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: Regulation .06 adopted as an emergency provision effective October 1, 1996 (23:21 Md. R. 1464); adopted permanently effective December 30, 1996 (23:26 Md. R. 1859)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.12 to COMAR 31.11.07 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 11, 2002 (29:22 Md. R. 1725)
Administrative History: Regulation .03 amended effective November 11, 2002 (29:22 Md. R. 1725)
Administrative History: ——————
Administrative History: Regulations .01—.06 repealed effective June 23, 2014 (41:12 Md. R. 669)

31.11.08 Small Group Market Health Insurance Geographic Areas

COMAR 31.11.08.01 Applicability.

This chapter applies to all carriers which offer health benefits plans to small employers in the State.

History

Administrative History: Effective date: May 23, 1994 (21:10 Md. R. 843)
Administrative History: Regulation .02B amended effective October 1, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.04 to COMAR 31.11.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1205, Annotated Code of Maryland

COMAR 31.11.08.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Baltimore Metropolitan Area” means Baltimore City, Baltimore County, Harford County, Howard County, and Anne Arundel County.

(2) “Eastern and Southern Maryland” means St. Mary's County, Charles County, Calvert County, Cecil County, Kent County, Queen Anne's County, Talbot County, Caroline County, Dorchester County, Wicomico County, Somerset County, and Worcester County.

(3) “Washington, D.C. Metropolitan area” means Montgomery County and Prince George's County.

(4) “Western Maryland” means Garrett County, Allegany County, Washington County, Carroll County, and Frederick County.

Cross References

31.11.08.03

History

Administrative History: Effective date: May 23, 1994 (21:10 Md. R. 843)
Administrative History: Regulation .02B amended effective October 1, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.04 to COMAR 31.11.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1205, Annotated Code of Maryland

COMAR 31.11.08.03 Geographic Areas.

If carriers subject to this chapter adjust their community rates based on geography, they may only use the geographic areas defined in Regulation .02 of this chapter.

History

Administrative History: Effective date: May 23, 1994 (21:10 Md. R. 843)
Administrative History: Regulation .02B amended effective October 1, 1995 (22:16 Md. R. 1221)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.04 to COMAR 31.11.08 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109 and 15-1205, Annotated Code of Maryland

31.11.09 Solicitation of Coverage under Group Health or Blanket Health Insurance Policy Issued in Another Jurisdiction

COMAR 31.11.09.01 Scope.

This chapter applies to all insurers seeking to solicit coverage in this State under a group health or blanket health insurance policy issued in another jurisdiction.

History

Administrative History: Effective date: September 1, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Excess of Loss and Catastrophe Coverage—Suspension of General Filing Requirements, repealed effective March 6, 1989 (16:4 Md. R. 497)
Administrative History: ——————
Administrative History: Regulations .01—.03, Solicitation of Coverage Under Group Health or Blanket Health Insurance Policy Issued in Another Jurisdiction, adopted effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: Regulations .01—.03 amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.35 to COMAR 31.11.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 4-205, and 15-310, Annotated Code of Maryland

COMAR 31.11.09.02 Standards for Approval to Solicit.

A. An insurer seeking the Commissioner's approval to solicit coverage in this State under a group health or blanket health insurance policy issued in another jurisdiction shall submit to the Commissioner documentation sufficient to enable the Commissioner to determine whether the type of group to be covered conforms substantially to one of the types of groups described in Insurance Article, §15-302 or 15-305, Annotated Code of Maryland. An insurer may not solicit this coverage in Maryland until the Commissioner has made that determination.

B. If the Commissioner determines that the type of group to be covered conforms substantially to one of the types of groups described in Insurance Article, §15-302 or 15-305, Annotated Code of Maryland, the insurer shall file with the Commissioner all forms and endorsements necessary to demonstrate that the insurer provides all of the applicable benefits which are required by Insurance Article, Annotated Code of Maryland, to be included in a group health or blanket health insurance policy issued in another jurisdiction.

C. If the Commissioner determines that the type of group to be covered does not conform substantially to one of the types of groups described in Insurance Article, §15-302 or 15-305, Annotated Code of Maryland, the insurer shall submit to the Commissioner each policy form, certificate form, application form, rider, and endorsement which it proposes to use in connection with insurance coverage provided to Maryland residents.

D. Each filing made pursuant to these regulations shall be made not less than 60 days in advance of the form's use. At the expiration of the 60-day period, unless extended by the Commissioner an additional 30 days, the right to solicit the filed coverage is considered approved unless the Commissioner has previously approved or disapproved the right to solicit the filed coverage.

E. The Commissioner may at any time withdraw approval previously given by sending to the insurer, not less than 30 days in advance of the effective date of the Commissioner's action, a notice of withdrawal setting forth the grounds for withdrawal in sufficient detail as to reasonably apprise the insurer of the basis for withdrawal.

F. Approval to solicit coverage in this State may not be given if any of the forms fail to contain those applicable benefits which are required by Insurance Article, Annotated Code of Maryland, to be included in a group or blanket health insurance policy issued in another jurisdiction.

History

Administrative History: Effective date: September 1, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Excess of Loss and Catastrophe Coverage—Suspension of General Filing Requirements, repealed effective March 6, 1989 (16:4 Md. R. 497)
Administrative History: ——————
Administrative History: Regulations .01—.03, Solicitation of Coverage Under Group Health or Blanket Health Insurance Policy Issued in Another Jurisdiction, adopted effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: Regulations .01—.03 amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.35 to COMAR 31.11.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 4-205, and 15-310, Annotated Code of Maryland

COMAR 31.11.09.03 Notice to Insured Concerning Mandated Benefits.

An insurer who seeks to solicit coverage for Maryland residents under a group health or blanket health insurance policy issued in another jurisdiction shall include in the certificate form used in connection with the coverage, a notice on the first page in 12-point bold type that the policy may omit some of the benefits required for a policy issued and delivered in Maryland.

History

Administrative History: Effective date: September 1, 1966
Administrative History: Amended effective May 1, 1968
Administrative History: Chapter, Excess of Loss and Catastrophe Coverage—Suspension of General Filing Requirements, repealed effective March 6, 1989 (16:4 Md. R. 497)
Administrative History: ——————
Administrative History: Regulations .01—.03, Solicitation of Coverage Under Group Health or Blanket Health Insurance Policy Issued in Another Jurisdiction, adopted effective April 27, 1992 (19:8 Md. R. 804)
Administrative History: Regulations .01—.03 amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.35 to COMAR 31.11.09 effective September 7, 1998 (25:18 Md. R. 1439)
Authority: Insurance Article, §§2-109, 4-205, and 15-310, Annotated Code of Maryland

31.11.10 Required Standard Provisions

COMAR 31.11.10.01 Scope.

This chapter applies to each group health insurance contract, each blanket health insurance contract, and each group nonprofit health service plan contract issued or delivered in Maryland.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Blanket health insurance” has the meaning stated in Insurance Article, §15-305, Annotated Code of Maryland.

(2) “Carrier” means an insurer or nonprofit health service plan.

(2-1) “Coverage period” means the interval of time the blanket health insurance contract or group health insurance contract provides protection, in exchange for the payment of a particular premium.

(3) Group Health Insurance.

(a) “Group health insurance” has the meaning stated in Insurance Article, §15-302, Annotated Code of Maryland.

(b) “Group health insurance” includes:

(i) A small employer health benefit plan as defined in Insurance Article, §15-1201, Annotated Code of Maryland; and

(ii) A contract issued to a group policyholder by a nonprofit health service plan.

(4) “Group policyholder” means the entity to whom the group health insurance contract or blanket health insurance contract is issued.

(5) “Insured” means an individual covered under a group health insurance contract or blanket health insurance contract.

(6) “Preferred provider” means a provider that has entered into a provider service contract.

(7) “Preferred provider benefit” means a benefit that appears in a group health insurance contract or blanket health insurance contract under which health care services are to be provided to the insured by a preferred provider.

(8) “Provider service contract” means a contract between a provider and a carrier or other entity, under which the provider agrees to provide health care services on a preferential basis under contracts containing preferred provider benefits.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.03 Required Standard Provisions.

A. A group health insurance contract may not be delivered in Maryland unless it contains in substance the provisions:

(1) Listed in Regulation .04 of this chapter; or

(2) Which in the opinion of the Commissioner, as compared to the provisions in Regulation .04 of this chapter, are:

(a) More favorable to the individuals insured, or

(b) At least as favorable to the individuals insured and more favorable to the policyholder.

B. A blanket health insurance contract may not be delivered in Maryland unless it contains in substance the provisions:

(1) Listed in Regulation .05 of this chapter; or

(2) Which in the opinion of the Commissioner, as compared to the provisions in Regulation .05 of this chapter, are:

(a) More favorable to the individuals insured, or

(b) At least as favorable to the individuals insured and more favorable to the policyholder.

C. Inapplicable and Inconsistent Provisions. If a provision required by Regulation .04 or .05 of this chapter is wholly or partly inapplicable to or inconsistent with the coverage provided by a particular contract, the carrier shall:

(1) Omit from the contract the inapplicable provision or part of the provision; or

(2) Modify the inconsistent provision or part of the provision to make it consistent with the coverage provided by the contract.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.04 Group Health Insurance Standard Provisions.

A. Entire Contract; Changes. Each group health insurance contract shall contain a provision that specifies:

(1) Which documents constitute the entire contract of insurance; and

(2) That a change in the policy may not be valid:

(a) Until approved by an executive officer of the carrier, and

(b) Unless the approval is endorsed on the policy or attached to the policy.

B. Contestability of Coverage.

(1) Each group health insurance contract shall contain a provision that:

(a) The contract may not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue;

(b) A statement made by any person covered under the policy relating to insurability may not be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force before the contest for a period of 2 years during the person's lifetime;

(c) Absent fraud, each statement made by an applicant, group policyholder, or insured is considered to be a representation and not a warranty; and

(d) A statement made to effectuate insurance may not be used to avoid the insurance or reduce benefits under the policy unless:

(i) The statement is contained in a written instrument signed by the group policyholder or insured, and

(ii) A copy of the statement is given to the group policyholder, insured, or beneficiary of the insured.

(2) The provision required by §B(1) of this regulation does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the contract or upon other provisions in the contract.

C. Notice of Claim.

(1) Each group contract shall contain a provision describing how and when a claim form can be requested from a carrier.

(2) If the carrier requires written notice of claim for the carrier to send a claim form to the claimant, the provision shall indicate that:

(a) The written notice of claim is not required before 20 days after the occurrence or commencement of the loss covered by the policy; and

(b) The carrier may not invalidate or reduce a claim if it is shown that:

(i) It was not reasonably possible to give notice within 20 days, and

(ii) Notice was given as soon as was reasonably possible.

D. Claim Forms. Each group health insurance contract shall contain a provision that:

(1) The carrier shall provide claim forms for filing proof of loss to each claimant or to the group policyholder for delivery to the claimant; and

(2) If the carrier does not provide the claim forms within 15 days after notice of claim is received, the claimant is considered to have complied with the requirements of the policy as to proof of loss if the claimant submits, within the time fixed in the policy for filing proof of loss, written proof of the occurrence, character, and extent of the loss for which the claim is made.

E. Proofs of Loss. Each group health insurance contract shall contain a provision that:

(1) Written proof of loss shall be furnished to the carrier:

(a) In case of claim for loss of time because of disability, within 90 days after the commencement of the period for which the carrier is liable, and that subsequent written proofs that the disability continues shall be furnished to the carrier at the intervals that the carrier reasonably requires; or

(b) In case of claim for any loss other than loss of time because of disability, within 90 days after the date of the loss; and

(2) Failure to furnish the proof of loss within the time required does not invalidate or reduce a claim if it was not reasonably possible to submit the proof within the required time, if the proof is furnished as soon as reasonably possible and, except in the absence of legal capacity of the claimant, not later than 1 year from the time proof is otherwise required.

F. Time of Payment of Claims.

(1) Each group health insurance contract shall contain a provision that:

(a) Benefits payable under the policy for any loss other than benefits for the loss of time will be paid not more than 30 days after receipt of written proof of loss; and

(b) Subject to written proof of loss, all accrued indemnities for loss of time will be paid not less frequently than monthly during the continuance of the period for which the carrier is liable, and any balance remaining unpaid at the termination of the period will be paid as soon as reasonably possible after receipt of proof.

(2) A policy is considered to provide for periodic payment for loss under §F(1)(b) of this regulation only if the policy contains a specific statement to that effect.

G. Payment of Claims.

(1) Each group health insurance contract shall contain a provision that all benefits, other than those described in §G(2) and (3) of this regulation, will be payable to the insured.

(2) Loss of Life Benefits.

(a) Benefits for loss of life of the insured shall be payable to the beneficiary designated by the insured.

(b) If the contract contains conditions pertaining to family status, the beneficiary may be the family member specified by the policy terms.

(c) The payment of the loss of life benefits are subject to the provisions of the policy if no designated or specified beneficiary is living at the time of death of the insured.

(3) If a group health insurance policy contains a preferred provider benefit, the policy may indicate that benefits for services rendered by a preferred provider will be paid directly to the preferred provider rendering the services.

(4) At the option of the carrier, the contract may provide that if any benefit of the contract is payable to the estate of an individual, or to an individual who is a minor or otherwise not competent to give a valid release, the carrier may pay the benefit, up to an amount not exceeding $5,000, to any relative by blood or connection by marriage of the individual who is considered by the carrier to be equitably entitled to the benefit.

H. Legal Action. Each group health insurance contract shall contain a provision that an action at law or in equity may not be brought:

(1) To recover on the policy before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the policy; and

(2) After the expiration of 3 years after the written proof of loss is required to be furnished.

I. Grace Period.

(1) Each group health insurance contract shall contain in substance the following provision: “Grace Period: A grace period of 30 days will be granted for payment of each premium due after the first premium, unless the carrier does not intend to renew the policy beyond the period for which premium has been accepted and notice of the intention not to renew is delivered to the group policyholder at least 45 days before the premium is due. During the grace period the policy shall continue in force.”

(2) Any additional provisions related to the grace period shall be expressly stated in the policy subject to the following limitations:

(a) Unless a carrier receives a notice of the group policyholder's intention to terminate the policy before the end of the grace period, the carrier may collect premium for the 30-day grace period;

(b) If a carrier receives a notice of intention to terminate the policy during the grace period, the carrier may collect premium for the period beginning on the first day of the grace period until the date on which notice is received or the date of termination stated in the notice, whichever is later; and

(c) If premium for the 30-day grace period is paid after the grace period ends, a carrier may charge interest for the premium, but:

(i) Interest may not begin to accrue during the 30-day grace period, and

(ii) The interest rate charged may not exceed an effective rate of 6 percent per year.

J. Certificates. Each group health insurance contract shall contain a provision that:

(1) Unless the carrier makes delivery directly to the employee or member, the carrier will provide to the group policyholder, for delivery to each employee or member of the insured group, a statement that summarizes the essential features of the insurance coverage of the employee or member and that indicates to whom benefits under the policy are payable; and

(2) If dependents are included in the coverage, only one statement need be issued for each family unit.

K. Addition of Employees/Members. Each group health insurance contract shall contain a provision that eligible new employees, members, or dependents may be added periodically to the group originally insured in accordance with the terms of the policy.

L. Misstatement of Age. If the premiums or benefits vary by age, each group health insurance contract shall contain:

(1) A provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of an insured has been misstated; and

(2) A clear statement of the method of adjustment to be used.

M. Group Policyholder Liable for Premium Until Notice of Termination is Received. Each group health insurance contract shall contain a provision that requires the employer, labor union, association, or other entity to which a contract of group health insurance has been issued to continue to pay the premium for an employee, member, or dependent under the policy until notice of termination of coverage has been received by the carrier.

Agency Note: Section M of this regulation is intended to implement the standard provision required by Insurance Article, §15-303(f), Annotated Code of Maryland, which was enacted as part of Chapter 554, Acts of 1999 (SB 350). The Attorney General approved the enactment for constitutionality and legal sufficiency, but determined that the standard provision requiring employers, labor unions, associations, and other purchasers of group insurance to notify insurers immediately on termination of an individual insured or continue to pay premiums after coverage has ceased, was likely preempted by the federal Employees' Retirement Security Act (ERISA).

N. Premium Due Date.

(1) Each group health insurance contract shall specify the premium due date.

(2) The premium due date shall be the date the coverage period begins.

(3) A carrier may offer each group policyholder the option to pay the premium through an electronic payment.

(4) If the group policyholder elects an electronic payment, the carrier may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the group policyholder.

Cross References

14.35.01.02B(23)(f)

31.11.10.03A(1)

31.11.10.03A(2)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.05 Blanket Health Insurance Standard Provisions.

A. Each blanket health insurance contract shall contain in substance the provisions set forth in Regulation .04A, C, D, G, H, I, and L of this chapter.

B. Statements in Applications. Each blanket health insurance contract shall contain a provision that:

(1) Absent fraud, each statement made by the group policyholder is considered to be a representation and not a warranty; and

(2) A statement made by the group policyholder may not be used in defense to a claim under the policy unless the statement is contained in a written application.

C. Proofs of Loss. Each blanket health insurance contract shall contain a provision that:

(1) If a claim is for loss of time because of disability, written proof of loss shall be submitted to the insurer within 30 days after the beginning of the period for which the insurer is liable, and subsequent written proofs that the disability continues shall be submitted to the insurer at the intervals that the insurer reasonably requires;

(2) If a claim is for a loss other than loss of time because of disability, written proof of loss shall be submitted to the insurer within 90 days after the date of the loss; and

(3) Failure to submit proof of loss within the time required does not invalidate or reduce a claim if it is shown that it was not reasonably possible to submit the proof of loss within the time required, and that proof of loss was submitted as soon as was reasonably possible.

D. Time of Payment of Claims. Each blanket health insurance contract shall contain a provision that:

(1) Benefits payable under the policy, other than benefits for loss of time, are payable immediately on the insurer's receipt of written proof of loss; and

(2) Subject to proof of loss:

(a) Accrued benefits payable under the policy for loss of time are payable not later than at the end of each period of 30 days during the period for which the insurer is liable, and

(b) Any balance remaining unpaid at the end of the period set forth in §D(2)(a) of this regulation is payable immediately on the insurer's receipt of proof of loss.

Cross References

31.11.10.03B(1)

31.11.10.03B(2)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.06 Limitations and Exclusions.

A. Crime.

(1) Except as described in §A(3) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's commission of or attempt to commit a crime.

(2) A group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss for which a contributing cause was the commission of or the attempt to commit a crime by an individual other than the insured.

(3) A group disability benefit or a group accidental death and dismemberment benefit:

(a) May include an exclusion or limitation for loss to which a contributing cause was the insured's commission of or attempt to commit a felony; and

(b) May not contain an exclusion or limitation which is more restrictive to the insured than the exclusion or limitation set forth in §A(3)(a) of this regulation.

B. Illegal Occupation.

(1) Except as described in §B(2) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's being engaged in an illegal occupation.

(2) A group disability benefit or a group accidental death and dismemberment benefit:

(a) May include an exclusion or limitation for loss to which a contributing cause was the insured being engaged in an illegal occupation; and

(b) May not contain an exclusion or limitation which is more restrictive to the insured than the exclusion or limitation set forth in §B(2)(a) of this regulation.

C. Intoxicants and Narcotics.

(1) Except as described in §C(2) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss:

(a) Sustained or contracted in consequence of the insured being intoxicated or under the influence of any drug;

(b) Due to the use of alcohol;

(d) Due to alcoholism or drug addiction.

(2) A group disability benefit or a group accidental death and dismemberment benefit:

(a) May include an exclusion or limitation for loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic; and

(b) May not contain an exclusion or limitation regarding the use of alcohol or drugs which is more restrictive to the insured than the exclusion or limitation set forth in §C(2)(a) of this regulation.

D. Preexisting Conditions.

(1) Each group health insurance contract or blanket health insurance contract shall contain a provision specifying the additional exclusions or limitations, if any, applicable under the contract with respect to a disease or physical condition of an individual, not otherwise excluded from the individual's coverage by name or specific description effective on the date of the individual's loss, that existed before the effective date of the individual's coverage under the contract.

(2) The exclusion described in §D(1) of this regulation may apply only to a disease or physical condition for which medical advice or treatment was received by the individual during the 12 months before the effective date of the individual's coverage.

(3) The exclusion described in §D(1) of this regulation does not apply to loss incurred or disability beginning after the earlier of:

(a) The end of a continuous period of 12 months beginning on or after the effective date of the individual's coverage during all of which the individual has received no medical advice or treatment in connection with the disease or physical condition;

(b) The end of the 1-year period beginning on the effective date of the individual's coverage, if the individual's application or enrollment form does not include health questions; and

(c) The end of the 2-year period beginning on the effective date of the individual's coverage, if the individual's application or enrollment form includes health questions.

(4) If a group health insurance contract or blanket health insurance contract contains a preexisting condition limitation or exclusion, the limitation or exclusion may not apply to a condition that the applicant revealed in the application for the contract, unless the condition is excluded by means of a signed waiver rider attached to the contract.

Cross References

31.04.17.17B

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

COMAR 31.11.10.07 Optional Provisions.

A. Physical Examination.

(1) A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the carrier the right to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim under the contract.

(2) If the carrier includes the provision described in §A(1) of this regulation, the provision shall indicate that any physical examination required by the carrier will be performed at the expense of the carrier.

B. Autopsy.

(1) A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the carrier the right to make an autopsy in case of death when an autopsy is not forbidden by law.

(2) A carrier may include a provision in a group health insurance contract or blanket health insurance contract that any autopsy required by the carrier will be performed at the expense of the carrier.

C. Arbitration.

(1) A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the insured or the group policyholder the option of entering binding arbitration to settle a dispute with the carrier.

(2) If the carrier includes the provision described in §C(1) of this regulation, the provision may not require the insured or the group policyholder to enter binding arbitration.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1978)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Insurance Article, §12-203(g), Annotated Code of Maryland

31.11.11 Small Employer Group Health Insurance — Disclosure Statement

COMAR 31.11.11.01 Scope.

This chapter applies to all carriers that offer the Comprehensive Standard Health Benefit Plan to the small employer market.

History

Administrative History: Effective date: May 10, 2004 (31:9 Md. R. 713)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective March 21, 2011 (38:6 Md. R. 397)
Authority: Insurance Article, §§2-109 and 15-1204, Annotated Code of Maryland

COMAR 31.11.11.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Additional benefits” means benefits offered in addition to the Comprehensive Standard Health Benefit Plan that:

(a) Are offered separately from the plan;

(b) Are priced separately from the plan;

(d) Are guarantee renewed subject to the provisions of Insurance Article, §15-1212, Annotated Code of Maryland;

(e) Are community rated subject to the provisions of Insurance Article, §15-1205, Annotated Code of Maryland; and

(f) Do not duplicate any of the benefits in the Comprehensive Standard Health Benefit Plan.

(2) “Carrier” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(3) “Comprehensive Standard Health Benefit Plan” means the health benefit plan adopted by the Maryland Health Care Commission in accordance with Insurance Article, §15-1207, and Health-General Article, Title 19, Subtitle 1, Annotated Code of Maryland.

(4) “Small employer” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

History

Administrative History: Effective date: May 10, 2004 (31:9 Md. R. 713)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective March 21, 2011 (38:6 Md. R. 397)
Authority: Insurance Article, §§2-109 and 15-1204, Annotated Code of Maryland

COMAR 31.11.11.03 Required Notice — Initial Purchase of Coverage.

A. At the time of the initial purchase of coverage, a carrier who offers benefits additional to the benefits offered in the Comprehensive Standard Health Benefit Plan shall obtain a signed disclosure statement certifying that:

(1) The small employer was offered the Standard Comprehensive Health Benefit Plan; and

(2) Additional benefits were offered and priced separately.

B. The disclosure statement required in §A of this regulation shall be in at least 12-point type and shall read as follows:

"MARYLAND HEALTH INSURANCE REFORM ACT COMPREHENSIVE STANDARD HEALTH BENEFIT PLAN DISCLOSURE STATEMENT

Under Maryland law, small employers, including self-employed individuals and certain government and nonprofit organizations, as defined by Insurance Article, §15-1203, Annotated Code of Maryland, must be offered the Comprehensive Standard Health Benefit Plan (“Standard Plan”) by each carrier when health coverage is elected or renewed.

A carrier may not offer small employers a health benefit plan having fewer benefits than the Standard Plan. A carrier may offer benefits in addition to those in the Standard Plan provided the optional, additional benefits are offered and priced separately from the Standard Plan. A small employer who is subject to the federal Mental Health Parity and Addiction Equity Act of 2008 shall be offered, at a minimum, the Standard Plan plus an additional benefit rider to make the mental health and substance abuse benefits comply with the federal Mental Health Parity and Addiction Equity Act of 2008.

I HAVE READ AND UNDERSTAND THIS DISCLOSURE STATEMENT. I ACKNOWLEDGE THAT I HAVE RECEIVED A DESCRIPTION OF THE STANDARD PLAN AND RATES AND ANY ADDITIONAL BENEFITS AND RATES HAVE BEEN SHOWN AND PRICED SEPARATELY.

Name of Carrier:

Name of Producer:

Employer Name:

Employer Signature: Date: ".

C. The disclosure statement required by § A of this regulation may be included on the carrier's sales proposal sheet.

D. The carrier or insurance producer shall maintain the signed disclosure statement for not less than 5 years.

History

Administrative History: Effective date: May 10, 2004 (31:9 Md. R. 713)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective March 21, 2011 (38:6 Md. R. 397)
Authority: Insurance Article, §§2-109 and 15-1204, Annotated Code of Maryland

COMAR 31.11.11.04 Required Notice — Renewal of Coverage.

A. At the time of renewal of coverage, a carrier who offers benefits additional to the benefits offered in the Comprehensive Standard Health Benefit Plan shall provide a disclosure statement that:

(1) Indicates that, except as described in §A(4) of this regulation, the Comprehensive Standard Health Benefit Plan is the only plan required by State law;

(2) Identifies any additional benefits offered by the carrier at renewal;

(3) Identifies the cost of any additional benefits offered by the carrier at renewal; and

(4) Specifies that all additional benefits to the Comprehensive Standard Health Benefit Plan are not required by State law, with the exception of the additional benefit for compliance with the federal Mental Health Parity and Addiction Equity Act of 2008 for small employers subject to the federal Mental Health Parity and Addiction Equity Act of 2008.

B. The disclosure statement required by §A of this regulation may be included on the renewal notice or another document.

History

Administrative History: Effective date: May 10, 2004 (31:9 Md. R. 713)
Administrative History: Regulation .03B amended effective March 21, 2011 (38:6 Md. R. 397)
Administrative History: Regulation .04A amended effective March 21, 2011 (38:6 Md. R. 397)
Authority: Insurance Article, §§2-109 and 15-1204, Annotated Code of Maryland

31.11.12 Limited Benefit Plan

COMAR 31.11.12.01 Scope.

A. This chapter applies to all carriers that offer the Limited Benefit Plan to the small employer market.

B. This chapter identifies the uniform benefits which shall be offered in a Limited Benefit Plan which a carrier offers to a Maryland small employer.

C. A carrier may offer the Limited Benefit Plan through one or both of the preferred provider delivery systems, as defined in Regulation .02B(46) of this chapter and as described in Regulation .04 of this chapter.

D. Except as provided in Regulation .11 of this chapter, a prominent carrier, as that term is defined in Regulation .02B(49) of this chapter, shall offer, and any other carrier that participates in the small group market may offer, the Limited Benefit Plan only to a small employer:

(1) That has not provided the Standard Plan during the 12-month period preceding the date of application or, if the small employer has existed for less than 12 months, from the date the small employer commenced its business; and

(2) For which the average annual wage of the employees of the small employer does not exceed 75 percent of the average annual wage in the State.

E. A small employer that qualifies for and chooses the Limited Benefit Plan:

(1) May renew the Limited Benefit Plan even if the average annual wage of the employees of the small employer exceeds 75 percent of the average annual wage in the State at the time of renewal;

(2) Shall offer coverage for all eligible employees and dependents under the Limited Benefit Plan;

(3) May not offer the Standard Plan for any employee of the small employer;

(4) Need not contribute to the premium payments for an eligible employee or a dependent of an eligible employee.

F. This chapter also specifies the uniform cost-sharing arrangements of the Limited Benefit Plan applicable to each delivery system. This chapter permits carriers to offer additional benefits to those of the Limited Benefit Plan only if the additional benefits lower the cost-sharing arrangements in the Plan. The additional benefits may be offered by marketing one or more riders to the Limited Benefit Plan at an additional cost.

G. A carrier that offers the Limited Benefit Plan to an eligible employer shall offer the Plan to all eligible employees. An eligible employer may, at the employer's election, direct the carrier to offer the Limited Benefit Plan to the employer's part-time employees, as that term is defined in Regulation .02B(42) of this chapter, and those employees covered by other public or private health benefit plans or health benefit arrangements.

H. This chapter includes case management for medically complex and costly services to assure adequate cost containment and appropriate utilization to maximize the affordability of the Limited Benefit Plan to the small employer market.

Cross References

31.11.12.11A

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Annual maximum” means the maximum amount the carrier is obligated to pay for all services of a covered person during the contract year.

(2) “Carrier” has the meaning stated in Insurance Article, §15-1201(c), Annotated Code of Maryland.

(3) “Case management” means a form of utilization review used with high cost cases to monitor and manage treatment and suggest appropriate medical services.

(4) “Chlamydia screening test” has the meaning stated in Insurance Article, §15-829, Annotated Code of Maryland.

(5) “Coinsurance percentage” or “coinsure” means the percentage of allowable charges allocated to the carrier and to the covered person.

(7) “Controlled clinical trial” means a treatment that is:

(a) Approved by an institutional review board;

(b) Conducted for the primary purpose of determining whether or not a particular treatment is safe and efficacious; and

(i) An institute or center of the National Institutes of Health;

(ii) The Food and Drug Administration;

(iii) The Department of Veterans' Affairs; or

(iv) The Department of Defense.

(8) “Covered person” means an employee or a dependent of an employee covered by a carrier under the Limited Benefit Plan.

(9) “Copayment” means a specified charge that a covered person shall pay each time services of a particular type or in a designated setting are received.

(10) “Deductible” means the amount of allowable charges that must be incurred by an individual or a family per contract year before a carrier begins payment.

(11) “Delivery system” means the method that a carrier uses to provide the Limited Benefit Plan to covered persons.

(12) “Dependent” means a covered person's lawful spouse or dependent child.

(13) Dependent Child.

(a) “Dependent child” means an individual who is younger than 19 years old, or a full-time student younger than 23 years old, and is a:

(i) Biological child;

(ii) Stepchild;

(iii) Foster child;

(iv) Lawfully adopted child, or child in the process of being adopted from the date of placement;

(v) Child for whom the covered employee has been granted legal custody, including custody as a result of a guardianship, other than a temporary guardianship of less than 12 months duration, granted by a court or testamentary appointment; or

(vi) Child for whom the covered employee has the legal obligation to provide coverage pursuant to court order, court-approved agreement, or testamentary appointment.

(b) Notwithstanding the age limitation stated in §B(13)(a) of this regulation, “dependent child” includes an unmarried child who:

(i) Is chiefly dependent for support upon the covered employee; and

(ii) At the time of reaching the age limitation set forth in §B(13)(a) of this regulation, is incapable of self-support because of mental or physical incapacity that began before the dependent child's attaining the limiting age.

(14) “Domiciliary care” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(15) “Durable medical equipment” means equipment furnished by a supplier or a home health agency that:

(a) Can withstand repeated use;

(b) Is primarily and customarily used to serve a medical purpose;

(d) Is appropriate for use in the home.

(16) “Emergency services” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(17) “Eligible employee” has the meaning stated in Insurance Article, §15-1201(e), Annotated Code of Maryland.

(18) Experimental Services.

(b) “Experimental services” does not include controlled clinical trials as defined in §B(7) of this regulation.

(19) “Family” means:

(a) An individual and spouse;

(b) An individual and dependent minor or minors; or

(20) “Family planning services” means counseling, implanting or fitting birth control devices, and follow-up visits after a covered person selects a birth control method.

(21) “Federally qualified health maintenance organization” means a health maintenance organization which meets the requirements of Title XIII of the Public Health Service Act, 42 U.S.C. §3000e et seq.

(22) “Habilitative services” means services, including occupational therapy, physical therapy, and speech therapy, for the treatment of children with congenital and genetic birth defects to enhance the child's ability to function.

(23) “Health benefit plan” has the meaning stated in Insurance Article, §15-1201(f), Annotated Code of Maryland.

(24) “Health care facility” has the meaning stated in Health-General Article, §19-114, Annotated Code of Maryland.

(25) “Health care practitioner” has the meaning stated in Health-General Article, §19-132, Annotated Code of Maryland.

(26) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(27) “Home health care” means the continued care and treatment of a covered person in the home if:

(a) The institutionalization of the covered person in a hospital or related institution or skilled nursing facility would otherwise have been required if home health care were not provided; and

(b) The plan of treatment covering the home health care service is established and approved in writing by the health care practitioner.

(28) “Hospice care” has the meaning stated in 42 U.S.C. §1395x(dd).

(29) “Insulin-using beneficiary” means a beneficiary who uses insulin as part of a treatment plan prescribed by the beneficiary's medical care provider.

(30) “Late enrollee” has the meaning stated in Insurance Article, §15-1201(h), Annotated Code of Maryland.

(31) “Limited Benefit Plan” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(32) “Maintenance drug” has the meaning set forth in Insurance Article, §15-824(a)(3), Annotated Code of Maryland.

(33) “Managed care system” means a method that a carrier uses to review and preauthorize a treatment plan that a health care practitioner develops for a covered person using a variety of cost containment methods to control utilization, quality, and claims.

(34) “Mandated benefit” means:

(b) Reimbursement, required by statute, by a health benefit plan for a service if that service is performed by a care provider who is licensed under the Health Occupations Article and whose scope of practice includes that service.

(35) “Multiple risk factors” has the meaning stated in Insurance Article, §15-829, Annotated Code of Maryland.

(36) “Network” means providers who have entered into a provider service contract with a carrier to provide services on a preferential basis.

(37) “Nonpreferred brand name drug” means a drug that a carrier has not designated as a preferred drug.

(38) “Open formulary” means that prescription drugs to treat a covered service (brand and generic) are available to the insured or enrollee at specified levels of copayment.

(39) “Other nonfacility services” means services provided by non-physician health care practitioners and includes diagnostic and laboratory services.

(40) “Out-of-pocket limit” means the maximum amount of copayments, deductibles, and coinsurance that an individual or family is obligated to pay for covered services per contract year.

(41) “Outpatient rehabilitative services” means occupational therapy, speech therapy, and physical therapy, provided to covered persons not admitted to a hospital or related institution.

(42) “Part-time employee” has the meaning stated in Insurance Article, §15-1210, Annotated Code of Maryland.

(43) “Partial hospitalization” means the provision of medically directed intensive or intermediate short-term psychiatric treatment for a period of less than 24 hours but more than 4 hours in a day for an individual patient in a hospital, psychiatric day-care treatment center, or community mental health facility.

(44) “Personal care” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(45) “Preferred brand name drug” means a drug that a carrier has designated on its preferred drug list.

(46) “Preferred provider delivery system” means a delivery system that:

(a) Provides services to a covered person through a network; and

(b) Permits the covered person to select services outside the network.

(47) “Preexisting condition” has the meaning stated in Insurance Article, §15-1201(l), Annotated Code of Maryland.

(48) “Primary care” means services rendered by a health care practitioner in the following disciplines:

(a) General internal medicine;

(b) Family practice medicine;

(d) Obstetrics/gynecology.

(49) “Prominent carrier” has the meaning stated in Insurance Article, §15-1209, Annotated Code of Maryland.

(50) “Provider” means a health care practitioner or a health care facility licensed or otherwise authorized by law to provide health care services.

(51) “Related institution” has the meaning stated in Health-General Article, §19-301, Annotated Code of Maryland.

(52) “Religious organization” means an entity that:

(a) Is organized and operated exclusively for religious purposes; and

(b) Has obtained a tax exemption under 26 U.S.C. §501(c)(3) of the U.S. Internal Revenue Code.

(53) “Residential crisis services” means intensive mental health and support services that are:

(a) Provided to a child or an adult with a mental illness who is experiencing or is at risk of a psychiatric crisis that would impair the individual's ability to function in the community;

(b) Designed to prevent a psychiatric inpatient admission, provide an alternative to psychiatric inpatient admission, or shorten the length of inpatient stay;

(d) Provided by entities that are licensed by the Maryland Department of Health to provide residential crisis services.

(54) “Service” means a health care diagnosis, procedure, treatment, or item.

(55) “Skilled nursing facility” means an institution, or a distinct part of an institution, licensed by the Maryland Department of Health, which is:

(a) Primarily engaged in providing:

(i) Skilled nursing care, and related services, for residents who require medical or nursing care; or

(ii) Rehabilitation services for injured, disabled, or sick persons; and

(b) Certified by the Medicare Program as a skilled nursing facility.

(56) “Small employer” has the meaning stated in Insurance Article, §15-1201(o), Annotated Code of Maryland.

(57) “Standard Plan” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

Cross References

31.11.12.01C

31.11.12.01D

31.11.12.01G

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.03 Covered Services.

A. The Limited Benefit Plan includes the following:

(1) Care in medical offices for treatment of illness or injury;

(2) Inpatient hospital services as follows:

(a) Inpatient hospital physician and other nonfacility services; and

(b) Inpatient hospital facility services;

(3) Outpatient services as follows:

(a) Outpatient hospital physician and other health care practitioner services;

(b) Outpatient facility surgical services; and

(4) Inpatient mental health and substance abuse services provided through a carrier's managed care system, including residential crisis services, in a hospital, related institution, or entity licensed by the Maryland Department of Health to provide residential crisis services, including:

(a) Physician and other nonfacility services;

(b) Facility services;

(5) Outpatient mental health and substance abuse services provided through a carrier's managed care system, including:

(a) Physician and other health care practitioner services; and

(b) Facility services;

(6) Emergency services;

(7) Detoxification in a hospital or related institution, including:

(a) Physician and other nonfacility services; and

(b) Facility services;

(8) Ambulance services to or from the nearest hospital where needed medical services can appropriately be provided;

(9) Except for prostate cancer screening for men 40 years old through 75 years old, and colorectal screening for men and women 50 years old or older:

(a) Preventive services recommended in the report of the United States Preventive Services Task Force, Guide to Clinical Preventive Services, which is current when the services are rendered; and

(b) Any other preventive service required to be offered by a federally qualified health maintenance organization;

(10) Prostate cancer screening as set forth in the current recommendations of the American Cancer Society, which recommends an annual:

(a) Digital rectal examination for both prostate and colorectal cancer, at 40 years old or older; and

(b) Prostate-Specific Antigen (PSA) screening for:

(i) African-American men 40 years old or older;

(ii) All men 40 years old or older with a family history of prostate cancer; and

(iii) All other men 50 years old or older;

(11) Colorectal screening for men and women 50 years old or older as follows:

(a) A yearly fecal occult blood test, accompanied by digital rectal examination, plus flexible sigmoidoscopy every 5 years;

(b) A colonoscopy, accompanied by digital rectal examination, every 10 years; or

(12) Mammography services for women:

(a) 40 years old through 49 years old once every other calendar year; and

(b) 50 years old or older once per calendar year;

(13) Home health care services provided:

(a) As an alternative to otherwise covered services in a hospital or related institution; and

(b) For covered persons:

(i) Who receive less than 48 hours of inpatient hospitalization following a mastectomy or removal of a testicle; or

(ii) Who undergo a mastectomy or removal of a testicle on an outpatient basis, one home visit scheduled to occur within 24 hours after discharge from the hospital or outpatient health care facility, and an additional home visit if prescribed by the covered person's attending physician;

(14) Hospice care services, including:

(a) Physician and other health care practitioner services; and

(b) Facility services;

(15) Durable medical equipment, including:

(a) Nebulizers;

(b) Peak flow meters;

(i) Leg, arm, back, or neck braces; and

(ii) Artificial legs, arms, or eyes; and

(d) The training necessary to use these prostheses;

(16) Outpatient laboratory and diagnostic services;

(17) Outpatient rehabilitative services provided through a carrier's managed care system including physical therapy, occupational therapy, and speech therapy services;

(18) Chiropractic services;

(19) Skilled nursing facility services as an alternative to medically necessary inpatient hospital services, including:

(a) Physician and other nonfacility services;

(b) Facility services;

(20) Nutritional services up to a maximum of six visits per contract year per condition, for the treatment of:

(a) Cardiovascular disease;

(b) Diabetes;

(d) Cancer;

(e) Cerebral vascular disease; or

(f) Kidney disease;

(21) Autologous and nonautologous bone marrow, cornea, kidney, liver, heart, lung, heart/lung, pancreas, and pancreas/kidney transplants, including:

(a) Physician and other nonfacility services; and

(b) Facility services;

(22) Medical food for persons with metabolic disorders if ordered by a health care practitioner qualified to provide diagnosis and treatment in the field of metabolic disorders;

(23) Family planning services, including:

(a) Coverage for the insertion or removal of contraceptive devices;

(b) Medically necessary examination associated with the use of contraceptive drugs or devices; and

(24) Except for habilitative services provided in early intervention and school services, habilitative services for children 19 years old or younger for the treatment of congenital or genetic birth defects;

(25) All cost recovery expenses for blood, blood products, derivatives, components, biologics, and serums to include autologous services, whole blood, red blood cells, platelets, plasma, immunoglobulin, and albumin;

(26) Pregnancy and maternity services, including abortion, including:

(a) Physician and other nonfacility services; and

(b) Facility services;

(27) Prescription drugs;

(28) Controlled clinical trials, including:

(a) Physician and other nonfacility services; and

(b) Facility services;

(29) Diabetes treatment, equipment, and supplies;

(30) Breast reconstructive surgery as specified in Insurance Article, §15-815, Annotated Code of Maryland, and breast prosthesis, including:

(a) Physician and other nonfacility services; and

(b) Facility services;

(31) Audiology screening for newborns, limited to one screening and one confirming screening;

(32) General anesthesia and associated hospital or ambulatory facility charges in conjunction with dental care provided to the following:

(a) Individuals who are 7 years old or younger or developmentally disabled and for whom a:

(ii) Superior result can be expected from dental care provided under general anesthesia; and

(b) Individuals 17 years old or younger who:

(i) Are extremely uncooperative, fearful, or uncommunicative;

(ii) Have dental needs of such magnitude that treatment should not be delayed or deferred; and

(iii) Are individuals for whom lack of treatment can be expected to result in oral pain, infection, loss of teeth, or other increased oral or dental morbidity;

(33) An annual chlamydia screening test for:

(a) Women who are:

(i) Younger than 20 years old who are sexually active; or

(ii) 20 years old or older who have multiple risk factors; and

(b) Men who have multiple risk factors;

(34) The cost to beneficiaries of hearing aids for persons ages 18 years old or younger, every 36 months; and

(35) Osteoporosis screening as specified in Insurance Article, §15-823, Annotated Code of Maryland.

B. The services described in §A(24) of this regulation shall be delivered through a carrier's managed care system and shall include services for cleft lip and cleft palate, orthodontics, oral surgery, otologic, audiological, and speech therapy, physical therapy, and occupational therapy for children 19 years old or younger for treatment of congenital or genetic birth defects.

C. All mental health and substance abuse services described in §A(4) and (5) of this regulation shall be delivered through a carrier's managed care system.

D. Rehabilitative services and habilitative services required to be offered in the Plan shall be provided through the carrier's managed care system.

E. Prescription Drugs.

(1) Prescription drugs are covered only as provided in the specific services in Regulation .05 of this chapter.

(2) Birth control pills, Norplant, Depo Provera, and insulin, or their generic equivalents, are also covered only as provided in the specific services in Regulation .05 of this chapter.

(3) Except as provided in §E(4) of this regulation, coverage under §A(27) of this regulation includes up to a 90-day supply of maintenance drugs dispensed in a single dispensing of a prescription.

(4) Coverage of up to a 90-day supply of maintenance drugs in a single dispensing is not required for:

(a) The first prescription of a maintenance drug; or

(b) A change in a prescription of a maintenance drug.

F. The carrier shall provide benefits for the covered services in accordance with the terms of the contract, if:

(1) The service is rendered by a health care practitioner who is licensed under the laws of the state in which the practitioner is practicing; and

(2) The health care practitioner is practicing within the scope of the license.

G. Under §A(4) of this regulation, 2 partial hospitalization days may be substituted for 1 inpatient day in a hospital or related institution.

H. Diabetes Equipment and Supplies.

(1) Under §A(29) of this regulation, diabetes equipment includes glucose monitoring equipment under the durable medical equipment coverage for insulin-using beneficiaries.

(2) Insulin pumps are not included.

(3) Under the prescription coverage for insulin-using beneficiaries, diabetes supplies include coverage for:

(a) Insulin syringes and needles; and

(b) Testing strips for glucose monitoring equipment

I. Under §A(30) of this regulation, breast prosthesis and breast reconstruction on the nondiseased breast to achieve symmetry are covered regardless of:

(1) The patient's insurance status at the time of the mastectomy; or

(2) The time lag between the mastectomy and reconstruction.

J. Under §A(32) of this regulation:

(2) Carriers may restrict coverage to dental care that is provided by a:

(a) Fully accredited specialist in pediatric dentistry;

(b) Fully accredited specialist in oral and maxillofacial surgery; and

(3) Dental care for which general anesthesia is required is not covered.

Cross References

31.11.12.04B(1)(c)

31.11.12.04C(1)(d)

31.11.12.04C(1)(f)

31.11.12.05B(3)(b)

31.11.12.06A

31.11.12.06B(24)

31.11.12.06B(36)

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.04 Uniform Cost-Sharing Arrangements In General.

A. For each delivery system identified in §§B and C of this regulation, a carrier shall apply the uniform cost-sharing arrangements specified.

B. Preferred Provider—Credit Fund Delivery System.

(1) Covered services are divided into three categories, designated as Categories I, II, and III, based on the type of service to be provided, as follows:

(a) Category I includes the services listed in Regulation .03A(1), (9)—(12), (15)—(18), (20), (22), (23), (25), (26), (29), (31), and (33)—(35) of this chapter;

(b) Category II includes the services listed in Regulation .03A(2)—(8), (13), (14), (19), (21), (24), (28), (30), and (32) of this chapter; and

(2) Credit Fund.

(a) The carrier shall provide a fund which shall cover:

(i) For a person enrolled under individual coverage, $250 of Category I services; and

(ii) For a person enrolled under other than individual coverage, $500 of Category I services.

(b) The fund in §B(2)(a) of this regulation shall be renewed each contract year.

(3) Required Deductibles.

(a) Except as provided in §B(3)(b) of this regulation, services covered under Categories I and II shall be subject to a contract year deductible of:

(i) $1,000 for a person enrolled under individual coverage; and

(ii) $2,000 for a person enrolled under other than individual coverage.

(b) A carrier may not apply the deductible for Category I services until the fund in §B(2)(a) of this regulation has been exhausted.

(4) Services covered under Categories I and II for which coinsurance is applicable shall require coinsurance by the covered person of 30 percent for in-network services and 50 percent for out-of-network services.

(5) All Categories I and II covered services combined are subject to an annual maximum of $10,000 per covered person without regard to whether the person is enrolled under individual coverage or other than individual coverage.

C. Preferred Provider—Capped Benefit Delivery System.

(1) Covered services shall be divided into six groups, designated as Groups A, B, C, D, E, and F, based on the type of services to be provided, as follows:

(a) Group A includes the services listed in Regulation .03A(1), (2)(a), (3)(a), (4)(a), (5)(a), (7)(a), (9)—(12), (13), (14)(a), (15), (17), (18), (19)(a), (20), (21)(a), (22), (23)—(25), (26)(a), (28)(a), (29), (30)(a), (31), and (33)—(35) of this chapter;

(b) Group B includes the services listed in Regulation .03A(6), (8), and (16) of this chapter;

(c) Group C includes the services listed in Regulation .03A(2)(b), (4)(b), (7)(b), (14)(b), (19)(b), (21)(b), (26)(b), (28)(b), (30)(b), and (32) of this chapter;

(d) Group D includes the services listed in Regulation .03A(3)(b) of this chapter;

(e) Group E includes the services listed in Regulation .03A(3)(c) and (5)(b)of this chapter; and

(f) Group F includes the services listed in Regulation .03A(27) of this chapter.

(2) Services covered under Group A shall require coinsurance by the covered person of 0 percent for in-network services and 50 percent for out-of-network services up to the specific annual maximum set out in Regulation .05 of this chapter for the specific type of Group A service.

(3) Services covered under Group B shall require 0 percent coinsurance by the covered person up to the specific annual maximum set out in Regulation .05 of this chapter for the specific type of Group B service.

(4) Services covered under Group C shall require payment by the covered person of all charges less up to $1,000 per day for an in-network provider and less $700 per day for an out-of-network provider for a period of up to 30 days per covered person per contract year.

(5) Services covered under Group D shall require coinsurance by the covered person of 30 percent for in-network services and 50 percent for out-of-network services up to a maximum of $10,000 per covered person per contract year.

(6) Services covered under Group E shall require the covered person to pay, for in-network services, 100 percent of the rate negotiated between the carrier and the provider. Out-of-network services are not covered.

(7) Services covered under Group F shall be covered as set out in Regulation .05 of this chapter.

Cross References

31.11.12.01C

31.11.12.05A(1)(a)(ii)

31.11.12.05A(2)(a)

31.11.12.05A(2)(b)

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.05 Uniform Cost-Sharing Arrangements Specific Services.

A. Preferred Provider—Credit Fund Delivery System.

(1) Coverage of Category I Services.

(a) Except for services listed in Regulation .03A(15), (17), (18), (22), (25), and (34) of this chapter, Category I services shall be covered as follows:

(i) Payment for covered services by the fund;

(ii) After exhaustion of the fund and after meeting the deductible requirement as described in Regulation .04B(3) of this chapter, coinsurance requirements as described in Regulation .04B(4) of this chapter.

(b) In addition to the deductible and coinsurance requirements specified in §A(1)(a)(ii) of this regulation, services listed in Regulation .03A(17) and (18) of this chapter are subject to a combined benefit maximum of $1,000 per person per contract year.

(c) In addition to the deductible and coinsurance requirements specified in §A(1)(a)(ii) of this regulation, services listed in Regulation .03A(15), (22), (25), and (34) of this chapter are subject to a benefit maximum of $1,000 per person per contract year.

(2) Coverage of Category II Services.

(a) Except for emergency services, Category II services shall be covered by meeting the deductible requirement as described in Regulation .04B(3) of this chapter and coinsurance requirements as described in Regulation .04B(4) of this chapter.

(b) After meeting the deductible requirement as described in Regulation .04B(3) of this chapter, emergency services shall be subject to a $100 copay in addition to the coinsurance requirements as described in Regulation .04B(4) of this chapter.

(3) Coverage of Category III Services.

(a) Except as required in §A(3)(d) of this regulation, each covered person shall pay the lesser of the cost of the prescription or a copayment of $15.

(b) Coverage for brand name drugs covered through a pharmacy discount card shall require coinsurance by the covered person of 100 percent of the discounted rate.

(c) Category III services for generic drugs shall be subject to a $500 benefit maximum per contract year for each covered person.

(d) Each covered person shall pay the lesser of the cost of the prescription or a $30 copayment for a 90-day supply of generic maintenance drugs dispensed in a single dispensing of a prescription.

(e) Coverage of up to a 90-day supply of maintenance drugs in a single dispensing is not required for the first prescription of a maintenance drug or a change in a prescription of a maintenance drug.

B. Preferred Provider—Capped Benefit Delivery System.

(1) Group A services are divided into the following services categories:

(a) Physician and other health care practitioner office visits (non-preventive services);

(b) Physician and other health care practitioner office visits (preventive services);

(d) Inpatient physician and other non-facility services; and

(e) Outpatient physician and other health care practitioner services.

(2) The following benefit maximums apply to the Group A service category indicated:

(a) $200 per covered person per contract year for physician and other health care practitioner office visits (nonpreventive services), as listed in Regulation .03A(1), (17), (18), (20), (23), (24), and (29) of this chapter;

(b) $150 per covered person per contract year for physician and other health care practitioner office visits (preventive services), as listed in Regulation .03A(9)—(12), (31), (33), and (35) of this chapter;

(c) $250 per covered person per contract year for equipment and supplies, as listed in Regulation .03A(15), (22), (25), and (34) of this chapter;

(d) $700 per covered person per contract year for inpatient physician and other nonfacility services, as listed in Regulation .03A(2)(a), (4)(a), (7)(a), (13), (14)(a), (19)(a), (21)(a), (26)(a), (28)(a), and (30)(a) of this chapter; and

(e) $500 per covered person per contract year for outpatient physician and other health care practitioner services, as listed in Regulation .03A(3)(a) and (5)(a) of this chapter.

(3) The following benefit maximums apply to the Group B service category indicated:

(a) $200 per covered person per contract year for emergency and ambulance services, as listed in Regulations .03A(6) and (8) of this chapter; and

(b) $150 per covered person per contract year for outpatient laboratory and diagnostic services, as listed in Regulation .03A(16) of this chapter.

(4) Services covered under Group F shall be covered as follows:

(a) Except as required in §B(4)(b) of this regulation, each covered person shall pay the lesser of the cost of the prescription or a copayment of:

(i) $10 for generic drugs;

(ii) $30 for preferred brand-name drugs; or

(iii) $50 for nonpreferred brand-name drugs;

(b) Each covered person shall pay the lesser of the cost of the prescription or a copayment for a 90-day supply of maintenance drugs dispensed in a single dispensing of a prescription as follows:

(i) For generic maintenance drugs, one $20 copayment;

(ii) For preferred brand-name maintenance drugs, one $60 copayment; or

(iii) For nonpreferred brand-name maintenance drugs, one $100 copayment;

(c) Coverage of up to a 90-day supply of maintenance drugs in a single dispensing is not required for the first prescription of a maintenance drug or a change in a prescription of a maintenance drug; and

(d) Services covered in Group F shall be subject to a maximum benefit per contract year of:

(i) $250 for a person enrolled under individual coverage; and

(ii) $750 for a person enrolled under other than individual coverage.

Cross References

31.11.12.03E(1)

31.11.12.03E(2)

31.11.12.04C(2)

31.11.12.04C(3)

31.11.12.04C(7)

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.06 Limitations and Exclusions.

A. A carrier shall apply the limitations and exclusions specified in §B of this regulation to the covered services specified in Regulation .03 of this chapter.

B. The following are exclusions and limitations to the covered services:

(1) Services that are not medically necessary;

(2) Services performed or prescribed under the direction of a person who is not a health care practitioner;

(3) Services that are beyond the scope of practice of the health care practitioner performing the service;

(4) Services to the extent they are covered by any government unit, except for veterans in Veterans' Administration or armed forces facilities for services received for which the recipient is liable;

(5) Services for which a covered person is not legally, or as a customary practice, required to pay in the absence of a health benefit plan;

(6) The purchase, examination, or fitting of eyeglasses or contact lenses, except for:

(a) Aphakic patients and soft or rigid gas permeable lenses; or

(b) Sclera shells intended for use in the treatment of a disease or injury;

(7) Personal care services and domiciliary care services;

(8) Services rendered by a health care practitioner who is a covered person's spouse, mother, father, daughter, son, brother, or sister;

(9) Experimental services;

(11) Infertility services, including:

(a) Testing;

(b) In vitro fertilization;

(d) Zygote intrafallopian transfer; or

(e) Cryogenic or other preservation techniques used in these or similar procedures.

(12) Services to reverse a voluntary sterilization procedure;

(13) Services for sterilization or reverse sterilization for a dependent minor;

(14) Medical or surgical treatment for obesity, unless otherwise specified in the covered services;

(15) Medical or surgical treatment or regimen for reducing or controlling weight, unless otherwise specified in the covered services;

(16) Services incurred before the effective date of coverage for a covered person;

(17) Services incurred after a covered person's termination of coverage, including any extension of benefits;

(18) Surgery or related services for cosmetic purposes to improve appearance, but not to restore bodily function or correct deformity resulting from disease, trauma, or congenital or developmental anomalies;

(19) Services for injuries or diseases related to a covered person's job to the extent the covered person is required to be covered by a workers' compensation law;

(20) Services rendered from a dental or medical department maintained by or on behalf of an employer, mutual benefit association, labor union, trust, or similar persons or groups;

(21) Personal hygiene and convenience items, including, but not limited to, air conditioners, humidifiers, or physical fitness equipment;

(22) Charges for telephone consultations, failure to keep a scheduled visit, or completion of any form;

(23) Inpatient admissions primarily for diagnostic studies, unless authorized by the carrier;

(24) Except as provided in Regulation .03A(34) of this chapter, the purchase, of examination for, or fitting of:

(a) Hearing aids and supplies; and

(b) Tinnitus maskers;

(25) Travel, whether or not recommended by a health care practitioner;

(26) Except for emergency services, services received while the covered person is outside the United States;

(27) Immunizations related to foreign travel;

(28) Unless otherwise specified in covered services, dental work or treatment which includes hospital or professional care in connection with:

(a) The operation or treatment for the fitting or wearing of dentures;

(b) Orthodontic care or malocclusion;

(i) Removal of tumors and cysts; or

(ii) Treatment of injury to natural teeth due to an accident, if the treatment is received within 6 months of the accident; and

(d) Dental implants;

(29) Accidents occurring while and as a result of chewing;

(30) Routine foot care, including the paring or removing of corns and calluses, or trimming of nails, unless these services are determined to be medically necessary;

(31) Arch support, orthotic devices, in-shoe supports, orthopedic shoes, elastic supports, or exams for their prescription or fitting, unless these services are determined to be medically necessary;

(32) Inpatient admissions primarily for physical therapy, unless authorized by the carrier;

(33) Treatment leading to or in connection with transsexualism, or sex changes or modifications, including but not limited to surgery;

(34) Treatment of sexual dysfunction not related to organic disease;

(35) Services that duplicate benefits provided under federal, State, or local laws, regulations, or programs;

(36) Organ transplants except those included under Regulation .03 of this chapter;

(37) Nonhuman organs and their implantation;

(38) Nonreplacement fees for blood and blood products;

(39) Lifestyle improvements, including nutrition counseling, or physical fitness programs, unless included as a covered service;

(40) Wigs or cranial prosthesis;

(41) Weekend admission charges, except for emergencies and maternity, unless authorized by the carrier;

(42) Outpatient orthomolecular therapy, including nutrients, vitamins, and food supplements;

(43) Temporomandibular joint syndrome (TMJ) treatment and treatment for craniomandibular pain syndrome (CPS), except for surgical services for TMJ and CPS, if medically necessary and if there is a clearly demonstrable radiographic evidence of joint abnormality due to disease or injury;

(44) Services resulting from accidental bodily injuries arising out of a motor vehicle accident to the extent the services are payable under a medical expense payment provision of an automobile insurance policy;

(45) Services for conditions that State or local laws, regulations, ordinances, or similar provisions require to be provided in a public institution;

(46) Services for, or related to, the removal of an organ from a covered person for purposes of transplantation into another person, unless the:

(a) Transplant recipient is covered under the plan and is undergoing a covered transplant; and

(b) Services are not payable by another carrier;

(47) Physical examinations required for obtaining or continuing employment, insurance, or government licensing;

(48) Nonmedical ancillary services such as vocational rehabilitation, employment counseling, or educational therapy;

(49) Private hospital room, unless authorized by the carrier;

(50) Private duty nursing, unless authorized by the carrier;

(51) Treatment for:

(a) Mental health or substance abuse not authorized by the carrier through its managed care system; or

(b) A mental health or substance abuse condition determined by the carrier through its managed care system to be untreatable; and

(52) Services related to smoking cessation.

C. A religious organization may request and a carrier shall grant the request for an exclusion from coverage for a service mandated under the Plan if the service is in conflict with the religious organization's bona fide religious beliefs and practices.

D. A religious organization that obtains an exclusion from coverage for a service mandated under the Plan shall provide its employees reasonable and timely notice of this exclusion.

E. The carrier's premium rate for the Plan may not be affected by the religious organization's exclusions from coverage for a service mandated under the plan.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.07 Additional Benefits.

A carrier may offer benefits in addition to the Limited Benefit Plan only if:

A. The benefits are offered separately from the plan;

B. The benefits are priced separately from the plan;

C. Subject to the provisions of Insurance Article, §15-1213, Annotated Code of Maryland, the benefits are guaranteed issue;

D. Subject to the provisions of Insurance Article, §15-1213, Annotated Code of Maryland, the benefits are guaranteed renewable;

E. Subject to the provisions of Insurance Article, §15-1205, Annotated Code of Maryland, the benefits are subject to adjusted community rating;

F. The benefits do not duplicate any of the benefits in the plan; and

G. The benefit lowers the cost-sharing arrangements in the Limited Benefit Plan described in Regulations .04 and .05 of this chapter.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.08 Mandated Benefits.

A. The plan excludes mandated benefits, except for Insurance Article, §§15-123(d), 15-401, 15-407, 15-408, 15-409, 15-412(a) and (h), 15-414, 15-604, 15-701, 15-811, 15-812, 15-815, 15-816, and 15-10B-09, Annotated Code of Maryland, and Health-General Article, §§19-703(d) and (g), and 19-706(h), Annotated Code of Maryland, to the extent those sections are considered mandated benefits.

B. This chapter does not exclude any requirement contained in statute or regulation that a carrier shall pay hospitals for hospital services rendered in accordance with rates approved by the Health Services Cost Review Commission.

C. Referrals to Specialists. Each carrier:

(1) That does not allow direct access to specialists shall provide for a standing referral to a specialist under the requirements of Insurance Article, §15-830, Annotated Code of Maryland;

(2) Shall provide for a referral to a specialist who is not part of the carrier's panel under the requirements of Insurance Article, §15-830, Annotated Code of Maryland; and

(3) Shall provide direct access to obstetric and gynecological care as specified in Insurance Article, §15-816, Annotated Code of Maryland.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.09 Rates.

A. A carrier shall market the Plan in the following compositions:

(1) Individual; and

(2) Individual, spouse, and dependents.

B. In addition to §A of this regulation, a carrier may market the Plan in one or more of the following compositions:

(1) Individual and spouse; or

(2) Individual and dependent.

C. For each composition in §§A and B of this regulation, the carrier shall calculate a separate community rate.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.10 Preexisting Conditions.

A. A carrier may not apply a preexisting condition provision to health care services for pregnancy or newborns.

B. A carrier may impose a preexisting condition provision of up to 12 months for a late enrollee.

C. A carrier may impose a waiting period from the date of application, in accordance with Insurance Article, §15-1208(b)(2), Annotated Code of Maryland.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.11 Exemption for Certain Prominent Carriers.

A. Except as provided in §B of this regulation, a prominent carrier that offers insurance in the small group market shall offer the Limited Benefit Plan to a small employer as required under Regulation .01D of this chapter.

B. A prominent carrier that is controlled by an insurance holding company is exempt from the requirement to offer the Limited Benefit Plan to a small employer if another prominent carrier which is controlled by the same insurance holding company as the carrier seeking exemption offers the Limited Benefit Plan to small employers in the State.

Cross References

31.11.12.01D

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

COMAR 31.11.12.12 Review.

In addition to the requirements set forth in Insurance Article, §15-1207, Annotated Code of Maryland, the Maryland Health Care Commission shall review the Plan from time to time. Unless otherwise stated, all changes in the Plan made pursuant to this review are effective for contracts issued or renewed after July 1 of the calendar year in which the changes are promulgated.

History

Administrative History: Effective date: April 11, 2005 (32:7 Md. R. 686)
Administrative History: Regulation .03A amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .04C amended as an emergency provision effective June 17, 2005 (32:14 Md. R. 1274); amended permanently effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-103(c)(6) and 19-108; Insurance Article, §§2-108, 2-109, and 15-1207; Annotated Code of Maryland

31.11.13 Limited Benefit Plan — Disclosure Statement

COMAR 31.11.13.01 Scope.

This chapter applies to all carriers that offer the Limited Benefit Plan to the small employer market.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 2005 (32:15 Md. R. 1315); emergency status extended at 33:4 Md. R. 350; adopted permanently effective January 16, 2006 (33:1 Md. R. 40)
Authority: Insurance Article, §§2-109 and 15-207, Annotated Code of Maryland; Ch. 287, Acts of 2004

COMAR 31.11.13.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(2) “Comprehensive Standard Health Benefit Plan” means the health benefit plan adopted by the Maryland Health Care Commission in accordance with Insurance Article, §15-1207, and Health-General Article, Title 19, Subtitle 1, Annotated Code of Maryland.

(3) “Limited Benefit Plan” means the Limited Health Benefit Plan adopted by the Maryland Health Care Commission in accordance with Insurance Article, §15-1207, and Health-General Article, Title 19, Subtitle 1, Annotated Code of Maryland.

(4) “Small employer” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 2005 (32:15 Md. R. 1315); emergency status extended at 33:4 Md. R. 350; adopted permanently effective January 16, 2006 (33:1 Md. R. 40)
Authority: Insurance Article, §§2-109 and 15-207, Annotated Code of Maryland; Ch. 287, Acts of 2004

COMAR 31.11.13.03 Required Notice — Limited Benefit Plan.

A. When a carrier offers the Limited Benefit Plan to a small employer qualified under Insurance Article, §15-1209, Annotated Code of Maryland, and the small employer chooses the Limited Benefit Plan, the carrier shall obtain a signed disclosure statement certifying that:

(1) The small employer was offered the Limited Benefit Plan; and

(2) The small employer received notice that more comprehensive coverage is available under the Comprehensive Standard Health Benefit Plan.

B. The disclosure statement required in §A of this regulation shall be in at least 12-point type and shall read as follows:

MARYLAND HEALTH INSURANCE REFORM ACT LIMITED HEALTH BENEFIT PLAN DISCLOSURE STATEMENT

Limited Health Benefit Plan Disclosure

Under Maryland law, a carrier may offer a small employer the Limited Health Benefit Plan. Certain benefits of the Limited Health Benefit Plan are limited to discounts only while other benefits are subject to reduced yearly amounts payable. More comprehensive coverage is available to a small employer under the Comprehensive Standard Health Benefit Plan (“Standard Plan”).

Employer Statement

I HAVE READ AND UNDERSTAND THE LIMITED HEALTH BENEFIT PLAN DISCLOSURE. I ACKNOWLEDGE THAT I HAVE RECEIVED A DESCRIPTION OF THE LIMITED HEALTH BENEFIT PLAN AND THAT I UNDERSTAND MORE COMPREHENSIVE COVERAGE IS AVAILABLE UNDER THE COMPREHENSIVE STANDARD HEALTH BENEFIT PLAN.

| _________________________________________ Carrier Name | _________________________________ Employer Name | | --- | --- | | _________________________________________ Producer Name | _________________________________ Employer Representative Name | | _________________________________________ Producer Signature | _________________________________ Employer Representative Signature | | _________________________________________ Date | _________________________________ Title |

C. The carrier shall maintain the signed disclosure statement for not less than 5 years.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 2005 (32:15 Md. R. 1315); emergency status extended at 33:4 Md. R. 350; adopted permanently effective January 16, 2006 (33:1 Md. R. 40)
Authority: Insurance Article, §§2-109 and 15-207, Annotated Code of Maryland; Ch. 287, Acts of 2004

31.11.14 Wellness Benefits Under Small Employer Health Benefit Plans

COMAR 31.11.14.01 Purpose.

This chapter specifies the requirements for:

A. A wellness benefit offered by a carrier to a small employer under Insurance Article, Title 15, Subtitle 12, Annotated Code of Maryland;

B. Determining if a carrier is considered a prominent carrier; and

C. Carriers offering wellness benefits to small employers.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 2008 (35:9 Md. R. 896); adopted permanently effective July 17, 2008 (35:14 Md. R. 1248)
Administrative History: Regulation .02B amended effective October 19, 2009 (36:21 Md. R. 1594)
Administrative History: Regulation .05A amended effective October 19, 2009 (36:21 Md. R. 1594)
Authority: Health General Article, §19-108; Insurance Article, §§2-109, 15-1201, 15-1204(g), and 15-1207(a); Annotated Code of Maryland

COMAR 31.11.14.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Carrier” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(2) “Case management program” means a program that involves a collaborative process of assessment, planning, implementation, coordination, monitoring, and evaluation of the options and services required to meet an individual's health needs through communication and available resources to promote quality cost effective outcomes.

(3) “Disease management program” means a program of preventive, diagnostic, and therapeutic services for certain patients that are considered to be at risk.

(4) “Eligible employee” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(5) “Health benefit plan” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(6) “Health risk assessment” means a self-reported health questionnaire that:

(a) Asks a variety of personal questions about lifestyle and behavioral habits, such as physical activity level, eating habits, and stress; and

(b) Includes, but is not limited to, biometric measures and other health status information.

(7) “Preventive services” means the services required to be covered under the small employer standard plan, as described in COMAR 31.11.06.03A(9).

(8) “Prominent carrier” means a carrier that insures at least 10 percent of the total lives insured in the Maryland small group market.

(9) “Small employer” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(10) “Standard plan” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

(11) “Wellness benefit”:

(a) Has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland; and

(b) Complies with the requirements set forth in Regulations .03 and .04 of this chapter.

(12) “Wellness program” has the meaning stated in Insurance Article, §15-1201, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 2008 (35:9 Md. R. 896); adopted permanently effective July 17, 2008 (35:14 Md. R. 1248)
Administrative History: Regulation .02B amended effective October 19, 2009 (36:21 Md. R. 1594)
Administrative History: Regulation .05A amended effective October 19, 2009 (36:21 Md. R. 1594)
Authority: Health General Article, §19-108; Insurance Article, §§2-109, 15-1201, 15-1204(g), and 15-1207(a); Annotated Code of Maryland

COMAR 31.11.14.03 Components of a Wellness Benefit.

A. Each wellness benefit shall include:

(1) A health risk assessment that is:

(a) Available at no cost to all employees covered under the small employer's wellness benefit; and

(b) Completed by each employee on a voluntary basis;

(2) Written feedback to each employee who completes the health risk assessment, with recommendations for lowering risks identified in the completed health risk assessment; and

(3) A financial incentive to promote:

(a) Preventive care;

(b) Healthy behavior and lifestyle choices; or

B. The financial incentive described in §A(3) of this regulation may be in the form of:

(1) A direct reward of financial value given to the employee, such as a monetary reward or a gift card; or

(2) A reduction in the employee's copayments, coinsurance, or deductible that would otherwise be payable under the small employer's health benefit plan.

C. A carrier shall be considered to have satisfied the requirement of §A(3) of this regulation, if the wellness benefit offered by the carrier eliminates the deductible for preventive services only.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 2008 (35:9 Md. R. 896); adopted permanently effective July 17, 2008 (35:14 Md. R. 1248)
Administrative History: Regulation .02B amended effective October 19, 2009 (36:21 Md. R. 1594)
Administrative History: Regulation .05A amended effective October 19, 2009 (36:21 Md. R. 1594)
Authority: Health General Article, §19-108; Insurance Article, §§2-109, 15-1201, 15-1204(g), and 15-1207(a); Annotated Code of Maryland

COMAR 31.11.14.04 General Requirements for Wellness Benefits Offered to Small Employers.

A. A wellness benefit offered to a small employer:

(1) Shall satisfy the requirements of an additional benefit found in COMAR 31.11.06.07; and

(2) May not violate any requirement regarding wellness programs as described in 45 CFR §146.121.

B. A wellness benefit may appear in an additional benefit rider as the only benefit in the rider, or it may be bundled with other benefits in an additional benefit rider.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 2008 (35:9 Md. R. 896); adopted permanently effective July 17, 2008 (35:14 Md. R. 1248)
Administrative History: Regulation .02B amended effective October 19, 2009 (36:21 Md. R. 1594)
Administrative History: Regulation .05A amended effective October 19, 2009 (36:21 Md. R. 1594)
Authority: Health General Article, §19-108; Insurance Article, §§2-109, 15-1201, 15-1204(g), and 15-1207(a); Annotated Code of Maryland

COMAR 31.11.14.05 Requirement for Carriers to Offer a Wellness Benefit.

A. A prominent carrier shall offer a wellness benefit to a small employer for a health benefit plan offered in Maryland.

B. A carrier that is not a prominent carrier may offer a wellness benefit to a small employer for a health benefit plan offered in Maryland.

C. The determination of which carriers are prominent carriers shall be determined each calendar year, based on the market share that each carrier had of the Maryland small group market for the prior calendar year.

D. A carrier may not condition the sale of a wellness benefit to a small employer on participation of the eligible employees of the small employer in wellness programs or activities.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.05 adopted as an emergency provision effective April 1, 2008 (35:9 Md. R. 896); adopted permanently effective July 17, 2008 (35:14 Md. R. 1248)
Administrative History: Regulation .02B amended effective October 19, 2009 (36:21 Md. R. 1594)
Administrative History: Regulation .05A amended effective October 19, 2009 (36:21 Md. R. 1594)
Authority: Health General Article, §19-108; Insurance Article, §§2-109, 15-1201, 15-1204(g), and 15-1207(a); Annotated Code of Maryland

31.12.01 Health Maintenance Organizations — Certificate of Authority and Fiscal Requirements

COMAR 31.12.01.01 Authority and Purpose.

The Insurance Commissioner adopts and promulgates this chapter according to Health-General Article, §19-705, Annotated Code of Maryland, for the purpose of governing and regulating various phases of the operations of health maintenance organizations.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.02 Definitions.

A. All terms defined in the Health Maintenance Organization Act of 1975 which are used in this chapter have the same meaning as in the Act unless the terms are defined differently in this chapter.

B. Terms Defined.

(1) “HMO” means a health maintenance organization.

(2) “Individual contract” means a contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber, provided the contract covers only the following persons:

(a) The subscriber;

(b) The subscriber and the subscriber's dependents; or

(3) “Leasehold estate improvements” means improvements made to property which is leased by the HMO and used by it to provide health care directly.

(4) “Member” means the subscriber and any of the subscriber's dependents who are enrolled in the HMO.

(5) “Subscriber” means, for:

(a) Group HMO contracts, the person who is eligible to be covered under the contract, other than as a dependent, due to satisfaction of the eligibility requirements of the group; and

(b) Individual HMO contracts, the person who completes the application for coverage with the HMO.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.03 Scope.

The scope of this chapter is the scope of Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland, as it relates to the Insurance Commissioner.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.04 Application for Certificate of Authority.

A. The Act provides that an HMO may not engage in business as an HMO unless so authorized under a certificate of authority issued by the Insurance Commissioner.

B. Application for a certificate of authority shall be submitted by the HMO not less than 90 days before the date it proposes to engage in business in this State.

C. An application form will be furnished by the Commissioner on the request of the HMO.

D. Each health maintenance organization, as defined in Health-General Article, §19-701(e), Annotated Code of Maryland, seeking a certificate of authority to transact business in Maryland shall file the following items:

(1) A copy of the basic organizational document of the HMO and any amendments to it, certified if applicable, by the Department of Assessments and Taxation.

(2) A copy of the HMO's current bylaws, if any, certified by the appropriate officer of the HMO.

(3) A list of the names, addresses, and official capacity with the HMO of the persons who are to be responsible for the conduct of its affairs, including all members of the governing body, the officers and directors in the case of a corporation, and the partners or associates in the case of a partnership or association. These persons shall disclose fully to the Commissioner and the governing body of the HMO the extent and nature of any contracts or arrangements between them and the HMO, including any possible conflicts of interest.

(4) A resume of the qualifications of the administrator, the medical director, the enrollment director, and of other persons associated with the HMO as requested by the Commissioner and the Maryland Department of Health.

(5) A statement generally describing the:

(a) HMO;

(b) HMO's operations;

(d) HMO's quality assurance mechanism;

(e) HMO's internal grievance procedures;

(f) Methods the HMO proposes to use to offer its members or public representatives an opportunity to participate in matters of policy and operation;

(g) Location of the facilities at which health care services will be regularly available to members;

(h) Type and specialty of physicians and health care personnel engaged to provide health care services;

(i) Number of physicians and personnel in each category;

(j) Health and medical records system to provide documentation of utilization by members.

(6) Forms of all health maintenance contracts the HMO proposes to offer to subscribers showing the benefits to which they are entitled, together with a table of the rates charged, or proposed to be charged, for each form of contract.

(7) A statement describing with reasonable certainty the geographic area or areas to be served by the HMO.

(8) A certified statement of the financial condition of the HMO, including:

(a) Sources of financial support;

(b) Assets and liabilities and minimum tangible net equity;

(9) Copies of proposed advertising and proposed techniques and methods of marketing the services of the HMO.

(10) A power of attorney duly executed by the HMO appointing the Commissioner and his duly authorized deputies, as the true and lawful attorney of the HMO in and for the State upon whom may be served all lawful process in any action, proceeding, or cause of action arising in this State against the HMO.

(11) A certificate of compliance evidencing employee coverage under Workers' Compensation law (Labor and Employment Article, Title 9, Annotated Code of Maryland).

(12) An official written notification from the Maryland Department of Health that the HMO's proposed health-related services, operations, and functions falling under the regulatory jurisdictions of the Department appear to meet its requirements and have been approved by the Department in accordance with its regulations.

E. Insurance—General Liability and Medical Malpractice. Evidence of insurance or a plan for self-insurance shall be presented and approved by the Commissioner both as to amounts and type of coverage before the HMO is licensed. Evidence of renewal shall be submitted with each annual report.

F. Fiscal Requirements.

(1) In order to qualify for a certificate of authority, the HMO shall at the time of making its initial application demonstrate to the satisfaction of the Commissioner that:

(a) The HMO has on hand sufficient funds or a reasonably certain source of income to meet all organizational, administrative, promotional, and marketing expenses incurred or expected to be incurred before opening;

(b) On its date of opening, the HMO will have a net worth sufficient to cover all expenses which may reasonably be anticipated will be incurred during the first month of operation, and on that date the HMO will have cash on hand or on deposit at least equal to the anticipated expenses;

(c) The HMO can anticipate with reasonable certainty that its cash flow plus funds already on hand will be sufficient to meet all expenses which it anticipates will be incurred on an accrual basis during the first 3 months of operation; and

(d) The HMO has a prospective budget and expected cash flow analysis for the first 24 months of its anticipated operation demonstrating its financial viability based on reasonable assumptions.

(2) For purposes of this regulation, amounts due and payable to the HMO directly or indirectly under contracts with federal, State, or local governmental agencies or with any of their instrumentalities may be regarded as an asset on the date the amounts become due and payable and any amounts becoming due within the first month of operation may be included in net worth or be considered as funds on hand or a part of the HMO's cash flow for purposes of §F(1)(b) and (c) of this regulation.

(3) If the HMO has received a loan, other than a first mortgage loan on real estate, fixtures, chattels, and equipment, from a State or national bank, and, if under the terms of the loan agreement the loan is subordinated to the rights of enrollees under the benefit provisions of their subscription agreements, the HMO may, for purposes of this regulation, take credit as income for up to 75 percent of the outstanding balance of the loan which is neither due nor callable before 1 year from the date the credit is taken. This credit may be taken only if, based on the cash flow analysis, all amounts falling due or becoming callable under the loan agreement may reasonably be expected to be available from the operation of the HMO on or before the respective due dates of amounts payable or callable under the loan agreement. Any interest accruing on the loan shall be treated as a current expense during each month of the HMO's budget and cash flow analysis.

(4) Exceptions in whole or in part as to the fiscal requirements of this regulation may be made by the Commissioner in the Commissioner's discretion for such periods as the Commissioner determines if:

(a) The HMO is funded primarily or substantially under programs sponsored by federal, State, or local governmental agencies or their instrumentalities, or by well established and reputable foundations for demonstration or charitable purposes, or by organizations except under §§501(c)(3) and 501(c)(4) of the Internal Revenue Code;

(b) The HMO has contracts with its provider physicians and hospitals under which the providers agree to continue furnishing their services for a stated period (not less than 30 days) even if the revenues of the HMO are insufficient to pay the providers for their services; or

(c) The HMO has an agreement with a Maryland licensed insurer or nonprofit health service plan under which the insurer or plan agrees to issue to enrollees in the HMO standard forms of hospital, medical, and surgical insurance at standard premium rates without any underwriting or other requirement other than an application and payment of the first monthly premium by the enrollee if the HMO is unable to continue in operation.

G. Determination of Financial Condition. In any determination of the financial condition of any HMO, there shall be allowed as assets only the following:

(1) Cash in the possession of the HMO or in transit under its control, and the balance of any deposit of the HMO in a solvent bank or trust company;

(2) Investments, securities, properties, and loans acquired or held in accordance with this regulation and income due or accrued thereon;

(3) Member charges in the course of collection, not more than 90 days past due (the foregoing limitation does not apply to amounts payable directly or indirectly by federal, State, or local governmental agencies or their instrumentalities);

(4) Notes and like written obligations not past due, taken for member charges or contracts permitted to be issued on that basis, to the extent of the unearned charges reserve carried thereon;

(5) Medical, surgical, and dental equipment directly used to provide health care;

(6) Prepaid charges on contracts with other organizations, hospitals, or other persons as approved by the Commissioner;

(7) Pharmaceutical and medical supply inventories; accounts receivable for health care provided, not including notes receivable, less adequate reserves for bad debts;

(8) Cost of land and depreciated cost of buildings owned and occupied by the HMO and used to directly provide health care, in excess of any encumbrances on it;

(9) Leasehold estate improvements, provided the initial cost is amortized over the useful life of the improvements but not beyond the termination of the lease;

(10) Federal funds may be counted as assets as approved by the Commissioner for that fiscal year in which funds are committed, awarded, or otherwise made available;

(11) Electronic, mechanical, and computer hardware including the operating system software used for data processing and accounting purposes, the cost of which shall be amortized in full over a period not to exceed 10 calendar years; and

(12) Other assets, not inconsistent with the foregoing provisions, deemed by the Commissioner available for the provision of health care, at values to be determined by the Commissioner.

H. The following may not be allowed as assets in determination of the financial condition of an HMO:

(1) Good will, trade names, and other like intangible assets;

(2) Advances to officers, whether secured or not, and advances to employees, agents, and other persons on personal security only;

(3) Stock of the HMO, owned by it, or any equity in it or loans secured by it, or any proportionate interest in the stock through the ownership by the HMO or an interest in another firm, corporation, or business unit;

(4) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the HMO exceeds the aggregate value thereof as determined by the values approved annually by the Securities Valuation Office of the National Association of Insurance Commissioners;

(5) All assets not allowed and all other assets of doubtful value or character included in any statement by an HMO to the Commissioner, or in any examiner's report to the Commissioner, shall also be reported to the extent of the value disallowed, as deductions from the gross assets of the HMO;

(6) Furniture and fixtures, leasehold improvements other than leasehold estate improvements which qualify under §G(9) of this regulation, vehicles, and maintenance equipment.

I. Liabilities Chargeable Against Assets. In any determination of the financial condition of an HMO, liabilities to be charged against its assets shall include:

(1) The amount of its capital stock outstanding, if any;

(3) The pro rata amount of premium charges paid by or on behalf of enrollees for any period of coverage beyond the date of the statement; and

(4) Its other liabilities, including but not limited to taxes, expenses, and other obligations due or accrued at the date of the statement.

J. Earned Charges.

(1) Earned charges shall include premium charges on all contracts written, including all determined excess and additional charges, less return charges, less charges returned or credited to members as dividends, and less charges on cancelled contracts, and less unearned charges on contracts in force as shown by the HMO's annual statement. Every HMO shall maintain an unearned charge reserve on all health care contracts in force, which reserve shall be set up as a liability. All prepaid charges shall be deemed unearned.

(2) “Charges” means the consideration for health services by whatever name called. Any “assessment”, or any “membership”, “policy”, “survey”, “inspection”, “service”, or similar fee or charge in consideration for an HMO contract is deemed part of the charge.

K. Deposit of Securities.

(1) The Insurance Commissioner may not issue or renew a certificate of authority for any HMO unless it has deposited and maintains in trust with the State Treasurer, for the protection of its members or its members and creditors, cash or government securities of the type described in Insurance Article, §5-701(b), Annotated Code of Maryland, in the amount of $100,000.

(2) The Insurance Commissioner may, in the Commissioner's discretion, waive the requirement for deposit of securities for any HMO which is domiciled in a state other than Maryland if that state has a security deposit greater than that of Maryland, provided that the deposit is for the benefit of all of the subscribers of that HMO including all Maryland residents.

(3) In determining whether to waive the requirement for deposit of securities, the Commissioner shall consider, but not be limited to, the following factors:

(a) The number of states in which the HMO is licensed to operate;

(b) The number of states in which the HMO has deposited securities; and

(c) Whether the residents of states other than Maryland have priority over nonresidents to the securities deposited in their states.

(4) This security deposit requirement does not apply to any HMO operating solely under contracts with the Maryland Medical Assistance Programs pursuant to Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq.

(5) The Insurance Commissioner may, in his discretion, waive the requirement for deposit of securities for any HMO, which is domiciled in Maryland or a state other than Maryland, if the Insurance Commissioner is satisfied that the deposit is not necessary to protect the members or creditors of that HMO.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.05 Change of Ownership.

The HMO shall notify the Commissioner within 10 days of any transfer of ownership or more than an aggregate of 10 percent of the stock or ownership interest in the HMO occurring during any 12-month period.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.06 Change of Name.

No name other than that approved by the Commissioner may be used. The name of the HMO may not be changed without prior approval of the Commissioner.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.07 Filings, Forms, and Rates.

HMOs shall be subject to the applicable procedures and requirements for filings, forms, and rates as outlined in COMAR 31.12.02.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.08 Repealed.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.09 Marketing.

The manner of marketing health care contracts shall be fully set forth in writing by the HMO before licensing, and any substantive alterations in marketing procedures must be approved by the Commissioner before use.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.10 Repealed.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.11 Annual Report.

A. Each licensed health maintenance organization, unless the time is extended for good cause shown, shall file a report with the Commissioner, certified by an audit of a certified public accounting firm, showing its financial condition on the last day of the preceding calendar year. The report shall be on the form adopted by the Commissioner and shall annually be filed with the Commissioner on or before the first day of March. The report shall be supplemented with a description of any changes in the information submitted with the last previous annual report or with the HMO's original application for a certificate of authority.

B. If the fiscal year of the HMO does not coincide with the calendar year, at the request of the HMO the Commissioner may, in his discretion, accept a certified audit showing the HMO's financial condition at the end of its last completed fiscal year, the audit to be accomplished by an annual report for the corresponding fiscal year to be filed on or before the 60th day following the last day of the fiscal year. As a condition for granting this exception, the Commissioner will require the HMO to also file on or before the first day of the following March an unaudited calendar year report.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.12 Fiscal Examination.

A. The Commissioner may make an examination of the operation of any health maintenance organization as often as the Commissioner deems necessary for the protection of the interest of the people of Maryland, but the examinations may not be less frequent than once every 5 years.

B. The expense of each examination shall be assessed against the HMO being examined and the HMO shall remit the cost of the examination to the Commissioner.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.13 Repealed.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

COMAR 31.12.01.14 Insurance — Catastrophic or Back-Up Coverage.

A. Unless the Commissioner grants an exemption from the requirements of this section, the HMO shall secure insurance coverage to provide:

(1) Payments or services required to be made or furnished under the health care contract to those enrollees who are injured or become ill outside the geographic limits served by the HMO; and

(2) Reinsurance protection to the HMO in event of catastrophic or unusual losses which would be in excess of the levels of loss which the HMO assumes in the basis of its calculation of premium charges.

B. Any exemption to requirements of §A of this regulation shall be for a period of 1 year, and may be renewed from year to year thereafter. Any requests for renewal shall be made by the HMO at least 90 days before the expiration date of the then current exemption.

C. With the approval of the Commissioner, the HMO may reinsure any portion or aspect of its operation.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1422)
Administrative History: Regulation .02A and C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D—F adopted effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .02D amended effective November 9, 1992 (19:22 Md. R. 1988)
Administrative History: Regulation .04G, H, and K amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .04K adopted effective June 29, 1987 (14:13 Md. R. 1472)
Administrative History: Regulation .10 amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .12B amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: Regulation .13C amended effective August 5, 1991 (18:15 Md. R. 1725)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.54 to COMAR 31.12.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .08 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .10 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Administrative History: Regulation .12A amended effective April 2, 2012 (39:6 Md. R. 412)
Administrative History: Regulation .13 repealed effective October 10, 2005 (32:20 Md. R. 1657)
Authority: Health-General Article, §§19-705(a), 19-707, 19-708, 19-710, and 19-728, Annotated Code of Maryland

31.12.02 Health Maintenance Organizations — Contract Forms and Premium Rates

COMAR 31.12.02.01 Authority and Purpose.

The Insurance Commissioner promulgates this chapter pursuant to Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland, for the purpose of governing and regulating various phases of the operations of health maintenance organizations.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Advertising” means:

(a) Printed and published material;

(b) Descriptive literature and sales aids;

(d) Sales materials, booklets, forms, pamphlets, brochures, illustrations, depictions, and form letters;

(e) Newspaper, radio, television, or direct mail advertising; and

(f) Any other material used for the promotion of enrollment.

(2) “Carrier” means:

(a) An HMO;

(b) An insurer;

(d) A dental plan organization; or

(e) A fraternal benefit society.

(3) Contract on an Insert Page Basis.

(a) “Contract on an insert page basis” means a contract that is composed of insert pages, with each insert page being identified with a unique form number.

(b) “Contract on an insert page basis” does not include a contract that contains an insert that is identified with a unique form number and is longer than one page.

(4) Contract on a Sectional Basis.

(a) “Contract on a sectional basis” means a contract that is composed of sections, with each section being identified with a unique form number.

(b) “Contract on a sectional basis” includes a contract that contains sections that are only one page long.

(5) Form.

(a) “Form” means:

(i) A policy;

(ii) A contract;

(iii) A certificate;

(iv) A rider;

(v) An endorsement; or

(vi) An application.

(b) “Form” does not include a provider contract.

(6) “Group certificate” means the description of benefits and rights which pertain to the members covered under a group policy.

(7) “Group contract” or “group policy” means a contractual agreement entered into between an HMO and an employer, union, trustee, association, or organization for the provision of health care services on a prepaid basis to:

(a) Subscribers; or

(b) Subscribers and the subscriber's dependents, family members, or both.

(8) “HMO” means a health maintenance organization.

(9) “Individual contract” means a contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber, provided the contract covers only the following persons:

(a) The subscriber;

(b) The subscriber and the subscriber's dependents, family members, or both; or

(10) “Member” means the subscriber and any of the subscriber's dependents or family members who are entitled to receive health care benefits from the HMO.

(11) “Subscriber” means for:

(a) Group contracts, the person who is eligible to be covered under the contract, other than as a dependent or a family member by reason of satisfying the eligibility requirements of the group contract; and

(b) Individual contracts, the person who completes the application for coverage with the HMO and who is covered under the contract.

Cross References

14.35.14.04E(3)(a)

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.03 Submittals.

A. Submittals of Forms to Commissioner.

(1) An HMO shall submit to the Commissioner for approval every form that it intends to use in Maryland.

(2) The Commissioner shall either approve or disapprove the form for use within 60 days of the receipt of the form in the Commissioner's office.

(3) An HMO may not use a form before the Commissioner's approval unless the Commissioner has not acted at the end of the 60-day period described in §A(2) of this regulation.

(4) The Commissioner may withdraw the Commissioner's prior approval or may disapprove a form previously permitted to be used if the Commissioner gives the HMO at least 30 days' notice before the effective date of the Commissioner's action disapproving the form.

B. Duplicate Forms Required For Nonelectronic Form Submissions.

(1) An HMO shall submit duplicate copies of each nonelectronic form the HMO intends to use in Maryland to the Commissioner for approval.

(2) If the Commissioner approves the nonelectronic form submitted by or on behalf of the HMO, the Commissioner shall:

(a) Retain one copy; and

(b) Return to the HMO one copy, with an appropriate notation indicating approval.

C. Each form submitted for approval shall be accompanied by:

(1) A current transmittal form developed by:

(a) The Maryland Insurance Administration; or

(b) The National Association of Insurance Commissioners (NAIC);

(2) A filing fee in accordance with Insurance Article, §2-112, Annotated Code of Maryland;

(3) Except for electronic form filings, a self-addressed, stamped envelope; and

(4) A cover letter listing the forms submitted for approval by form number, with a brief description of each form filed for approval.

D. The HMO may not use a form disapproved by the Commissioner.

E. If a printed form has been disapproved, the HMO may resubmit the form with modifications made by imprinting, multigraph, mimeograph, multilith, electronic printer, or rubber stamp. The HMO may not resubmit a form with handwritten or typewritten changes, interlineations, or deletions.

F. Submission of Forms.

(1) Except as provided in §F(2) of this regulation, an HMO shall submit forms for approval with the Commissioner.

(2) A third party may submit a form for approval on behalf of an HMO, if the third party includes a written authorization from the HMO to make the form filing.

G. Representative Specimen Data. Except for applications filed for approval, an HMO shall complete each form filed for approval with representative specimen data.

H. Contracts with Insert Pages.

(1) An HMO may file for approval of a contract on an insert page basis, only if:

(a) Each insert page is identified by a unique form number appearing in the lower left corner of the insert page; and

(b) The HMO includes the following information in the filing submission:

(i) A description of how the various insert pages will be combined;

(ii) A listing of the insert pages that can be substituted for other specific insert pages; and

(iii) The filing fee required under Insurance Article, §2-112, Annotated Code of Maryland, for each insert page with a unique form number.

(2) An HMO may not file for approval of insert pages for use with a previously approved contract, if the previously approved contract was not approved on an insert page basis.

(3) If an HMO files for approval of insert pages for a previously approved contract, the submission shall:

(a) Identify by form number and date of approval any insert pages that the new insert pages will replace; and

(b) Include a copy of the currently approved contract, unless the Commissioner waives the requirement or determines that a copy is not necessary to review the submission.

I. Contracts Comprised of Sections.

(1) An HMO may file for approval of a contract on a sectional basis, only if:

(a) Each section is identified by a unique form number appearing in the lower left corner of the first page of the section; and

(b) The HMO includes the following information in the filing submission:

(i) A description of how the various sections will be combined;

(ii) A listing of the sections that can be substituted for other specific sections; and

(iii) The filing fee required under Insurance Article, §2-112, Annotated Code of Maryland, for each section with a unique form number.

(2) An HMO may not file for approval of sections for use with a previously approved contract, if the previously approved contract was not approved on a sectional basis.

(3) If an HMO files for approval of sections for a previously approved contract, the submission shall:

(a) Identify by form number and date of approval any sections that the new sections will replace; and

(b) Include a copy of the currently approved contract, unless the Commissioner waives the requirement or determines that a copy is not necessary to review the submission.

Cross References

31.12.02.05B(2)

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.04 Variable Information.

A. Individual Contracts.

(1) Except as specified in §A(2) of this regulation, an HMO may not include variable material in an individual contract, or in a form to be used with an individual contract.

(2) An HMO may include variable material, in an individual contract or in a form to be used with an individual contract in the following portions of the form:

(a) The specifications, data, or schedule page;

(b) The product marketing name;

(d) Signatures of officers of the HMO;

(e) Descriptions of copayment amounts, deductibles, coinsurance amounts, out-of-pocket limits, annual maximums, or lifetime maximums;

(f) Specific dates, such as effective dates and termination dates; and

(g) Descriptions of benefit amounts or benefit limits.

(3) If an individual contract or a form to be used with an individual contract contains variable material as permitted under §A(2) of this regulation, the HMO shall:

(a) Bracket the variable material or otherwise mark the variable material to denote variability; and

(b) Include a statement of variability, in duplicate, that discusses how each variable item may change.

(4) If an individual contract or a form to be used with an individual contract is approved with variable material, an HMO may not submit a new statement of variability to be used with the previously approved contract or form, except for the following:

(a) Copayment amounts;

(b) Coinsurance amounts;

(d) Out-of-pocket limits;

(e) Annual maximums;

(f) Lifetime maximums;

(g) Benefit amounts; or

(h) Benefit limits.

(5) An HMO shall include the following with a new statement of variability filing for a previously approved form:

(a) A cover letter identifying the HMO and the HMO's National Association of Insurance Commissioners company code number; and

(b) The form number and date of approval of the form for which new variable material is being submitted.

B. Group Contracts.

(1) An HMO may include variable material in a group contract or in a form to be used with a group contract, if the HMO:

(a) Brackets the variable material or otherwise marks the variable material to denote variability; and

(b) Includes a statement of variability, in duplicate, that discusses how each variable item may change, including all textual variations that are intended.

(2) If a group contract or a form to be used with a group contract is approved with variable material, an HMO may not submit a new statement of variability to be used with the previously approved group contract or form, except for the following:

(a) Copayment amounts;

(b) Coinsurance amounts;

(d) Out-of-pocket limits;

(e) Annual maximums;

(f) Lifetime maximums;

(g) Benefit amounts; or

(h) Benefit limits.

(3) An HMO shall include the following with a new statement of variability filing for a previously approved form:

(a) A cover letter identifying the HMO and the HMO's National Association of Insurance Commissioners company code number; and

(b) The form number and date of approval of the form for which new variable material is being submitted.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.05 Failure to Respond to the Commissioner's Correspondence.

A. The Commissioner shall deem a filing withdrawn by the HMO if the HMO fails to respond to correspondence from the Commissioner regarding the filing within 90 days of the date of the correspondence from the Commissioner.

B. If an HMO resubmits a form for approval after 90 days of the date of the Commissioner's correspondence regarding the filing in which the form was included, the HMO shall:

(1) Include a new filing fee for the form and associated premium rates included in the filing; and

(2) Include in the filing all the information required in Regulation .03 of this chapter.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.06 Contract Forms.

A. Form Numbers.

(1) Each form shall be identified by a form number that is unique to that form.

(2) The form number shall be printed in the lower left corner of the first page, and no other number may appear near the form number.

B. The text of each form shall be printed in a style of type which is easily legible, the size of which shall be uniform and not less than 10 point with a lower case unspaced alphabet length not less than 120 point. The text shall include all printed matter except the name and address of the HMO, name or title of the policy, the brief description, if any, and captions and subcaptions.

C. Each form shall be clearly worded with all limitations, exclusions, and exceptions printed in the same size of type used to describe the benefits and grouped together under appropriate captions in boldfaced type.

D. Name of HMO.

(1) Each complete form, except riders or endorsements, shall bear on the face the corporate name and either:

(a) The address (city and state) of the HMO; or

(b) The address of the company office that will administer the form.

(2) The name of the HMO shall appear more prominently on a form than the name of:

(a) An affiliate;

(b) A producer;

(d) A holding company; or

(e) A third party administrator.

(3) The name of the HMO shall be printed in a size of type larger than the title of the policy.

E. Time shall be determined by any of the following which the HMO specifies in the contract:

(1) Time at the place the enrollee resides;

(2) Time at the place the contract is delivered;

(3) Time at the place the treatment is delivered; or

(4) Time at the location of the administrative office of the HMO.

F. Each form shall contain the signature of a responsible officer of the HMO.

G. A contract, certificate, rider, or endorsement may not contain any advertising material.

H. HMO Coverage as Secondary Coverage.

(1) Each individual contract, group contract, and group certificate shall state whether or not benefits provided are to be secondary to the benefits which the member is entitled to receive under:

(a) Workers' compensation insurance;

(b) Medicare; and

(2) An HMO contract may not:

(a) Provide benefits that are secondary to benefits payable under an automobile policy; or

(b) Include an exclusion for losses covered by an automobile policy.

I. Each individual contract and group contract shall provide that notice of any increase in charges shall be given to the contract holder by the HMO at least 45 days before the change in rate is proposed to become effective.

J. Each individual contract provided to subscribers shall describe the health services to be provided under the contract and shall contain the entire agreement between the HMO and the subscriber, including but not limited to:

(1) Date and time of inception and termination of contract;

(2) Initial rate to be charged and when the initial rate may be modified;

(3) Mode of payment, with provision for change of mode, if available;

(4) Late payment and reinstatement privileges;

(5) Cost sharing provisions, including copayments, coinsurance, and deductibles;

(6) Renewal conditions and applicable termination provisions;

(7) Provisions for adding new family members;

(8) Services to be provided under the contract;

(9) Provision for out-of-area coverage;

(10) Limits on length of stay, if any;

(11) Other limitations, exclusions, and exceptions; and

(12) The formal procedure to be followed in filing complaints or grievances.

K. Each individual contract which covers the spouse of the subscriber shall provide that, in the event of the death of the subscriber, the spouse will become the successor subscriber.

L. Each individual contract shall provide that the subscriber may, if the contract is not satisfactory for any reason, return it within 10 days of its receipt and receive a full refund of the charges paid. This right may not be exercised, however, if any member under the contract utilizes the services of the HMO within the 10-day period.

M. Each group contract and each group certificate furnished to subscribers of a group shall comply with all applicable provisions required by §§A—J of this regulation, inclusive, except that the certificate may omit those items which pertain only to the group contract holder.

N. Each individual contract, group contract, and group certificate shall include an incapacitated child provision that complies with the requirements found in Insurance Article, §15-402, Annotated Code of Maryland.

O. Newborn Child, Adopted Child, Child Under Guardianship Provision. Each individual contract, group contract, and group certificate shall contain a provision for covering newborn children, adopted children, and children under guardianship in accordance with Insurance Article, §15-401, Annotated Code of Maryland.

P. Each individual contract, group contract, and group certificate shall provide that, if the HMO for any reason beyond its control is unable to provide the health services promised in the contract, the HMO shall be liable for reimbursement of the expenses necessarily incurred by any member in procuring the services through other providers, to the extent prescribed by the Insurance Commissioner of Maryland.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.07 Application.

A. An application form shall stipulate the plan and any optional benefits being applied for.

B. Permissible Look-Back Periods.

(1) Except as provided in §B(2) of this regulation, an application form may not ask any question relative to any previously existing injury, sickness, or condition which has not required medical care or advice during the:

(a) 7-year period immediately preceding the date of the application if the application is made for coverage under a group contract; or

(b) 5-year period immediately preceding the date of the application, if the application is made for coverage under an individual contract.

(2) An application may inquire about a dismemberment or other current impairment, the cause of which may have occurred before the time periods permitted by §B(1) of this regulation.

C. If an application contains questions regarding past or present health conditions:

(1) The questions shall be asked to the best of the applicant's knowledge and belief; or

(2) The application shall include a statement that all of the answers provided are representations and are not warranties.

D. If a rider or endorsement modifies the coverage applied for, signed acceptance by the applicant is required at or before delivery of the contract.

E. A statement may not appear in the application with respect to a proxy through which one or more members of the board of directors is authorized to vote in the election of directors, or at any meeting of the board of directors.

F. If an application inquires about the applicant's participation in “hazardous activities”, the application shall list the activities that are considered to be “hazardous”.

G. If an application inquires about the applicant's use of “other habit-forming drugs”, the application shall list the specific drugs that are considered “habit-forming”.

H. If an application inquires about a symptom of an applicant, the question shall be asked about a “known symptom” of a physical condition or mental condition.

I. If an application inquires if an applicant has had any indication of a physical condition or mental condition, the question shall be asked about a “known indication” of a physical condition or mental condition.

J. Applications for Individual HMO Contracts.

(1) If an application is to be used by more than one carrier, the application shall include check-off boxes to indicate the carrier to which application is being made.

(2) Each carrier using the application shall:

(a) File the application with the Commissioner for approval; and

(b) Receive approval of use of the application from the Commissioner before using it in Maryland.

K. Applications for Group HMO Contracts.

(1) A group application may be used by more than one carrier if each carrier using the application:

(a) Files the application with the Commissioner; and

(b) Receives approval of the application from the Commissioner before using it in Maryland.

(3) If more than one carrier requests approval to use the same application with the same group applicant, the application shall clearly identify the coverages underwritten by each carrier.

L. If an application is to be completed by more than one individual, the signature box in the application shall clearly indicate that the signature applies only to the portion of the application completed by that individual.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.08 Charges.

A. The submittal of a form shall be accompanied by the submittal of the rates charged for it, together with detailed supporting actuarial data. Subsequent changes in charged rates shall be submitted with detailed supporting actuarial data at least 60 days before the date that any change in the rate is proposed to become effective.

B. The Commissioner shall approve or disapprove any rate submittal or change in the same manner as prescribed for approval or disapproval of forms.

C. An HMO may not make or permit any differential in charged rates for any reason based on the age or sex of an enrollee unless there is actuarial justification for the differential.

D. Charges may not be excessive, inadequate, or unfairly discriminatory.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.09 Advertising.

A. Advertising shall be truthful and may not be misleading in fact or implication.

B. Advertising may not use words or phrases whose:

(1) Meaning is unclear or ambiguous; or

(2) Understanding depends upon familiarity with technical terminology.

C. Advertising may not include words, phrases, or illustrations that are used in a manner which misleads or has the capacity or tendency to deceive or mislead.

D. All advertising shall contain the name and address of the HMO as filed with the Commissioner.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.10 Termination of Services.

A. Termination of a Particular Service.

(1) If an HMO desires to cease offering a service under the health care contract in force, the services may not be terminated without prior approval of the Commissioner.

(2) If an HMO ceases offering a service under an in-force health care contract, arrangements equitable to the members regarding a cost adjustment or substitution of an equivalent service satisfactory to the Commissioner shall be made.

B. A member of an HMO may have the membership cancelled or nonrenewed by the HMO only for the following reasons:

(1) Termination of the conditions, other than a change in the health of the member, under which the member became eligible to be enrolled under a group contract;

(2) Inability of the medical staff and the member to establish a reasonable physician-patient relationship;

(3) The member no longer resides, lives, or works in the service area;

(4) Failure of the member to pay any deductible or copayment charges permitted under any contracts approved by the Commissioner;

(5) Fraudulent use of the HMO's identification card by the member;

(6) The alteration or sale of prescriptions by the member;

(7) An attempt by the subscriber to enroll noneligible persons as dependents;

(8) The member has performed an act or practice that constitutes fraud;

(9) The member has made an intentional misrepresentation of material fact under the application for the HMO coverage; or

(10) Failure of the subscriber to pay any premium charge when due.

C. Failure to Follow Prescribed Course of Treatment.

(1) An HMO may not cancel or nonrenew a member's HMO membership due to the member's refusal to follow a prescribed course of treatment.

(2) The HMO contract may provide that the HMO is not required to furnish any further benefits or services for a particular condition if the member refuses to follow a prescribed course of treatment for that condition.

(3) If the member disagrees with a prescribed course of treatment from an HMO physician, the HMO shall permit the member to receive a second opinion from another HMO physician.

(4) If the member receives a second opinion as described in §C(3) of this regulation, and if the second physician disagrees with the prescribed course of treatment, the HMO may not refuse to provide services or benefits for that particular condition, subject to the HMO's coverage documents and its utilization review protocols and policies.

D. Required Notice of Termination.

(1) Except as provided in §D(3) of this regulation, if a member's coverage in an HMO is terminated or nonrenewed for a reason set forth in §B(2)—(9) of this regulation, the HMO shall provide notice of the termination or nonrenewal not less than 30 days before the date of cancellation or nonrenewal.

(2) The notice required by §D(1) of this regulation shall be delivered to the member in person or by first class mail addressed to the member's address last known to the HMO.

(3) An HMO is not required to provide the notice described in §D(1) of this regulation if the cause of termination is nonpayment of premium.

E. If the member is entitled to have issued a health care contract, the notice required by §D(1) of this regulation shall be accompanied by information as to how the member may apply for a contract.

F. If termination or nonrenewal is for nonpayment of copayments or deductibles, the notice required by §D(1) of this regulation shall state:

(1) The amount of charges due; and

(2) That if the member pays the amount of charges due, plus any administrative cost incurred in preparing and delivering the notice before the date of cancellation, membership will remain in full force and effect.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.11 Conversion of Coverage. — Repealed

Cross References

31.11.06.09D

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.12 General Operation of Health Maintenance Organizations.

A. The HMO shall provide, without limitations as to frequency or cost, except as established in the health care contract and provided for in these regulations, basic and supplemental health services to its members in the following manner:

(1) Reasonable deductibles and copayments may be required for the provision of specific services within the basic health services, unless the payments or the manner of payment unduly serves as a barrier to the delivery of basic health services;

(2) All services of health care providers provided for in the health care contract shall be provided through health care providers that are under contract to, or have agreements with, the HMO, except that this subsection does not apply to:

(a) Health care providers' services which the HMO and the Commissioner determine are unusual or infrequently used;

(b) Emergency services;

(d) Services received from health care providers that do not contract with the HMO, if the member has a benefit under the HMO contract for services received from non-HMO health care providers; or

(e) Services received from a health care provider that does not contract with the HMO, if the member was referred to the health care provider by the HMO or by a provider under contract with the HMO;

(3) All services provided for in the health care contract shall, within the area serviced by the HMO, be available and accessible to each of its members:

(a) Promptly as appropriate;

(b) In a manner which assures continuity; and

(4) Emergency services as follows:

(a) The HMO shall be liable for emergency expenses incurred by the member in securing any service customarily provided in the contract for emergency services incurred by the member which cannot reasonably be provided through the facilities of the HMO and which are considered medically necessary and justified; and

(b) The method used to establish the necessity of these services and the method the HMO shall use in fulfilling its financial responsibility for its health care services shall be set forth in the health care contract.

B. Health Care Contracts.

(1) The HMO shall bind itself to provide to the members basic health services and other supplemental services as specified in the health care contract.

(2) A copy of coverages and costs shall be given to each member or member family unit.

(3) All services included in the benefits, as well as any limitations or exclusions, shall be clearly stated in written form.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

COMAR 31.12.02.13 Provider Contracts.

A. All signed written agreements, including those defining physicians' services, shall be on file and available for review by the Commissioner at all times in the HMO's central office.

B. If agreements with consultants or other institutions are established by any HMO, the responsibilities, functions, objectives, and the terms of the agreements including financial arrangements and charges, of each outside resource shall be described in writing and signed by an authorized representative of the facility and the person or the agency providing the services.

C. Filing Requirements.

(1) The HMO may not use a provider contract unless the form of the contract has been filed in duplicate with the Commissioner.

(2) The HMO shall file a provider contract at least 30 days before its intended use.

(3) Form Numbers.

(a) The provider contract shall be identified by a unique form number that appears in the lower left corner of the first page of the provider contract.

(b) Each amendment rider to a provider contract shall be identified by a unique form number that appears in the lower left corner of the first page of the amendment rider.

(4) If the HMO intends to amend any of the following provisions of a previously filed provider contract, the HMO shall file the amendment with the Commissioner at least 30 days before its intended use:

(a) The hold-harmless clause;

(b) Any provision dealing with the administration of a coordination of benefits clause;

(c) Any provision dealing with termination of the provider contract, as described in Insurance Article, §15-112, Annotated Code of Maryland;

(d) Any provision dealing with the process of filing or payment of claims, as described in Insurance Article, §§15-1004 and 15-1005, Annotated Code of Maryland;

(e) Any provision dealing with when capitation payments are due for newly assigned HMO members, as described in Insurance Article, §15-113, Annotated Code of Maryland;

(f) Any provision dealing with retroactive denials of reimbursement or denials of reimbursement for preauthorized care, as described in Insurance Article, §§15-1008 and 15-1009, Annotated Code of Maryland;

(g) Any provision dealing with the payment of bonuses or other incentive-based compensation, as described in Insurance Article, §15-113, Annotated Code of Maryland, but actual payment amounts or percentages are not required to be filed;

(h) Any provision requiring the health care provider to provide services to other than HMO members or giving the health care provider an option to provide services to other than HMO members, as described in Insurance Article, §15-112, Annotated Code of Maryland;

(i) Any provision that gives the HMO the right to assign, transfer or subcontract a health care provider's contract to an insurer that offers personal injury protection coverage, as described in Insurance Article, §15-125, Annotated Code of Maryland;

(j) Any provision dealing with a provider's responsibility for the acts or decisions of the HMO, as described in Health-General Article, §19-710, Annotated Code of Maryland;

(k) Any provision dealing with the applicability of Maryland law; or

(l) Any provision of the contract that is revised to comply with Maryland law.

D. The Commissioner shall consider any provider contract filed with the Commissioner to be proprietary commercial information and not a public record.

E. All provider contracts, including agreements with hospitals, nonphysician providers, clinics, physicians' offices, and other related providers are subject to disapproval by the Commissioner for any of the following reasons:

(1) The provider contract does not meet reasonable requirements of providing quality medical care;

(2) The provider contract does not contain a hold-harmless clause in compliance with Health-General Article, §19-710(i), Annotated Code of Maryland;

(3) The provider contract does not provide for the rendition of services called for in the contracts with members in a reasonable manner; or

(4) The provider contract contains a provision that does not comply with Maryland law.

History

Administrative History: Effective date: October 1, 1977 (4:18 Md. R. 1426)
Administrative History: Regulation .01 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .02 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: Regulation .04 amended effective April 1, 1991 (18:6 Md. R. 684)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.55 to COMAR 31.12.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04H amended effective January 9, 2000 (26:27 Md. R. 2018)
Administrative History: ——————
Administrative History: Chapter revised effective October 10, 2005 (32:10 Md. R. 1657)
Administrative History: Regulation .07B amended effective May 17, 2010 (37:10 Md. R. 724)
Authority: Health-General Article, Title 19, Subtitle 7; Insurance Article, §§2-109 and 15-122; Annotated Code of Maryland

31.12.03 Health Maintenance Organizations — Mandatory Point-of-Service Option

COMAR 31.12.03.01 Scope.

This chapter applies to all health maintenance organizations operating in this State.

History

Administrative History: Effective date: July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .02C amended as an emergency provision effective July 1, 1996 (23:15 Md. R. 1079); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.07 to COMAR 31.12.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02C amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Health-General Article, §§19-705(a)(2) and 19-710.2, Annotated Code of Maryland

COMAR 31.12.03.02 Required Notice.

When a health maintenance organization is the sole carrier offered to group members by a group policyholder, the health maintenance organization:

A. Shall offer the group policyholder a point-of-service option for the individual group member to accept or reject;

B. May not impose a minimum participation level on the mandatory point-of-service option; and

C. As part of the application, shall provide to each group policyholder the following disclosure statement, for each point-of-service option offered:

“Under Maryland law, if you choose a point-of-service option for your group members, your group member may select a point-of-service option as an additional benefit. A point-of-service option allows your group members to obtain health care services from physicians and other providers outside the HMO network under certain circumstances that are described in attachment A. You have the choice to either pay for this point-of-service option, pay a percentage of the cost of this option, or require your group members to pay for the entire cost of this option. The cost of the point-ofservice option described in attachment A is identified in your proposal.

I have read and understand this disclosure statement and the attachments and, if I have chosen the point-of-service option, I will provide notice of the availability of this additional benefit to my eligible group members. Group Policyholder Signature”

History

Administrative History: Effective date: July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .02C amended as an emergency provision effective July 1, 1996 (23:15 Md. R. 1079); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.07 to COMAR 31.12.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02C amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Health-General Article, §§19-705(a)(2) and 19-710.2, Annotated Code of Maryland

COMAR 31.12.03.03 Record Retention.

Each health maintenance organization shall maintain copies of the notice and the group policyholder response for a period of 3 years or until its next market conduct examination, whichever occurs first.

History

Administrative History: Effective date: July 1, 1996 (23:13 Md. R. 943)
Administrative History: Regulation .02C amended as an emergency provision effective July 1, 1996 (23:15 Md. R. 1079); amended permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.07 to COMAR 31.12.03 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02C amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Health-General Article, §§19-705(a)(2) and 19-710.2, Annotated Code of Maryland

31.12.04 Dental Plans — General Provisions

COMAR 31.12.04.01 Purpose.

The purpose of this chapter is to provide appropriate standards and requirements for dental plan contracts.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Closed panel dental benefit contract” means a dental benefit contract that does not provide benefits for services provided by a dentist who is not a plan dentist, with the exception of:

(a) Emergency services; and

(b) Out-of-network services required by Insurance Article, §15-830, Annotated Code of Maryland.

(2) “Contract holder” means for:

(a) Group contracts, the organization or entity to which the contract is issued;

(b) Individual contracts, the person who applies for a contract covering:

(i) One individual, or

(ii) One individual and that individual's dependents.

(3) “Copayment” means the amount:

(a) Payable for a particular service by an enrollee in accordance with the patient charge schedule; or

(b) For which the enrollee is responsible as a condition for receiving benefits under a dental benefit contract.

(4) “Dental benefit contract” means a contract which provides benefits for dental services entered into between the dental plan organization and:

(a) An individual contract holder covering the:

(i) Subscriber;

(ii) Subscriber and the subscriber’s dependents;

(iii) Subscriber and the subscriber’s family members;

(iv) Subscriber’s dependent or dependents; or

(v) Subscriber and the subscriber’s dependents and family members; or

(b) The group contract holder covering the:

(i) Enrolled members of the group;

(ii) Enrolled members of the group and their dependents;

(iii) Enrolled members of the group and their family members; or

(iv) Enrolled members of the group and their dependents and family members.

(5) “Dental plan” means any contractual arrangement for dental services.

(6) “Dental plan organization” means a:

(a) Person that provides directly, arranges for, or administers a dental plan on a prepaid or postpaid individual or group capitation basis; or

(b) Nonprofit health service plan which limits its operation to providing directly, or arranging for or administering a plan providing, dental services.

(7) “Dental service” has the meaning stated in Insurance Article, §14-401, Annotated Code of Maryland.

(8) “Dependent” means an individual who is the spouse or child of a subscriber.

(9) “Enrollee” means a subscriber, or any dependent of the subscriber, who is enrolled in the dental plan organization.

(10) “Evidence of coverage” means any certificate, agreement, or contract issued to a subscriber of a group that sets out the dental services to which the enrollees are entitled.

(11) “Patient charge schedule” means a list of amounts which the enrollee is required to pay the plan dentist or the dental plan organization for particular services rendered under the dental benefit contract.

(12) “Plan dentist” means any dentist who has contracted with the dental plan organization or with an entity acting on behalf of the dental plan organization to provide dental services to the enrollees.

(13) “Provider contract” means a contract between the dental plan organization or an entity acting on behalf of the dental plan organization and a plan dentist.

(14) “Subscriber” means, for:

(a) Group dental benefit contracts, the person who is eligible to be covered under the contract, other than as a dependent, by reason of satisfying the eligibility requirements of the group;

(b) Individual dental benefit contracts, the individual who applies to the dental plan organization for coverage for:

(i) That individual only;

(ii) The individual and the individual’s dependents; or

(iii) The individual’s dependent or dependents.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.03 Applicability.

This chapter applies to:

A. Dental plan organizations authorized under Insurance Article, Title 14, Subtitles 1 and 4, Annotated Code of Maryland; and

B. Contracts issued or renewed by the dental plan organizations listed in §A of this regulation on or after the effective date of this chapter.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.04 Dental Benefit Contract.

Each dental benefit contract shall contain the following provisions:

A. The effective date of contract provision;

B. A provision describing the payment of required subscription fees or premiums;

C. A grace period provision, pursuant to Regulation .05 of this chapter;

D. For group dental benefit contracts, the eligibility requirements and effective date of coverage for members of the group and their dependents;

E. A provision describing the benefits available under the contract;

F. A provision describing the copayments for which the enrollee is responsible;

G. A provision describing the service area, if applicable;

H. If a dental plan organization generally provides benefits only within a stated service area, a provision providing for emergency dental services outside the service area, with the term “emergency” including care to alleviate acute pain;

I. For closed panel dental benefit contracts:

(1) A provision indicating that if a plan dentist refers the enrollee to a specialist who is not a plan dentist for dental services which are covered under the dental benefit contract, the dental plan organization shall be responsible for payment of the specialist’s charges to the extent the charges exceed the copayment specified in the dental benefit contract; and

(2) A provision which reads substantially as follows: “If during the term of this contract none of the plan dentists can render necessary care and treatment to the enrollee due to circumstances not reasonably within the control of the dental plan organization, such as complete or partial destruction of facilities, war, riot, civil insurrection, labor disputes, or the disability of a significant number of the plan dentists, then the enrollee may seek treatment from an independent licensed dentist of the enrollee’s own choosing. The dental plan organization will pay the enrollee for the expenses incurred for the dental services with the following limitations: The dental plan organization will pay the enrollee for services which are listed in the patient charge schedule as No Charge, to the extent that such fees are reasonable and customary for dentists in the same geographic area; the dental plan organization will also pay the enrollee for those services listed in the contract for which there is a copayment, to the extent that the reasonable and customary fees for such services exceed the copayment for such services as set forth in the contract. The enrollee may be required to give written proof of loss. The dental plan organization agrees to be subject to the jurisdiction of the Maryland Insurance Commissioner in any determination of the impossibility of providing services by plan dentists.”;

J. A provision setting out the terms under which coverage will terminate;

K. A provision setting out a grievance procedure provision that complies with the requirements of Insurance Article, Title 15, Subtitle 10D, and as applicable, Subtitle 10A, Annotated Code of Maryland; and

L. A provision setting out an extension of benefits in accordance with Insurance Article, §15-833, Annotated Code of Maryland.

Cross References

31.12.04.06A

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.05 Grace Period Requirements.

A. Individual Dental Benefit Contracts.

(1) If the individual dental benefit contract is guaranteed renewable for the life of the individual dental benefit contract, the dental benefit contract shall contain in substance the following provision: “Grace Period: A grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.”

(2) If the individual dental benefit contract gives the dental plan organization the right to refuse renewal, the individual dental benefit contract shall contain in substance the following provision: “Grace Period: Unless at least 30 days before the premium due date the dental plan organization has delivered to the subscriber, or has mailed to the subscriber's last address as shown by the records of the dental plan organization, written notice of its intention not to renew this contract beyond the period for which the premium has been accepted, a grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.”

B. Group Dental Benefit Contracts.

(1) Each group dental benefit contract shall contain in substance the following provision: “Grace Period: A grace period of 30 days will be granted for payment of each premium due after the first premium, unless the dental plan organization does not intend to renew the contract beyond the period for which premium has been accepted and notice of the intention not to renew is delivered to the contract holder at least 45 days before the premium is due. During the grace period the contract shall continue in force”.

(2) Any additional provisions related to the grace period shall be expressly stated in the group dental benefit contract, subject to the following limitations:

(a) Unless a dental plan organization receives a notice of the contract holder's intention to terminate the policy before the end of the grace period, the dental plan organization may collect premium for the 30-day grace period;

(b) If a dental plan organization receives a notice of intention to terminate the group dental benefit contract during the grace period, the dental plan organization may collect premium for the period beginning on the first day of the grace period until the date on which notice is received or the date of termination stated in the notice, whichever is later; and

(c) If premium for the 30-day grace period is paid after the grace period ends, a dental plan organization may charge interest for the premium for the group dental benefit contract, but:

(i) Interest may not begin to accrue during the 30-day grace period; and

(ii) The interest rate charged may not exceed an effective rate of 6 percent per year.

Cross References

14.35.01.02B(23)(e)

31.12.04.04C

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.06 Evidence of Coverage.

A. Except for Regulation .04A—C of this chapter, the evidence of coverage under any group contract shall contain all of the provisions required in Regulation .04 of this chapter.

B. The name of the group shall be specified in the evidence of coverage.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.07 Optional Provisions.

A. Dental benefit contracts may contain the provisions in §§B—D of this regulation, and if any of the provisions are included in a group dental benefit contract, the same provision shall be contained in the corresponding evidence of coverage.

B. General Provisions.

(1) A provision may be included specifying the dental plan organization's intention to charge a specified missed appointment fee. The fee shall be reasonable in relation to the nature of the procedure for which the missed appointment had been made. Neither the plan dentist nor the dental plan organization may charge a missed appointment fee unless this provision appears in the dental benefit contract.

(2) A provision may be included specifying the dental plan organization's ability to increase premiums or subscription fees, with this provision indicating that these fees may not be increased unless:

(a) The contract holder has been given written notice at least 45 days before the effective date of the increase; and

(b) In the case of:

(i) An individual contract, present rates have not been changed for at least 12 months,

(ii) A group contract, present rates under the contract have been in effect for at least 12 months.

(3) A provision may be included specifying the dental plan organization's intention to impose a financial penalty on an enrollee for voluntarily withdrawing from the dental plan during the first year of coverage, which penalty may not:

(a) Be charged if the enrollee withdraws from the dental plan after being covered for at least 12 months; or

(b) Exceed the usual, customary, and reasonable charge for services received reduced by the sum of the subscription fees paid by or for the enrollee and any copayments paid by or for the enrollee.

(4) A provision may be included specifying the dental plan organization's ability to increase the patient charge schedule, with the provision indicating that the increase may not be effective unless the:

(a) Present schedule has been in effect for at least 12 months; and

(b) Contract holder has been given written notice of the increase at least 30 days before the effective date of the increase.

(5) A provision may be included specifying the dental plan organization's rights if an enrollee refuses to follow a particular course of treatment. The dental plan organization may not terminate the membership of an enrollee for refusal to follow an appropriate course of treatment for a particular condition. The provision may indicate that the dental plan organization may refuse to provide any further benefits for the particular condition if the enrollee refuses to accept the recommended course of treatment.

(6) A provision may be included specifying the dental plan organization's rights if an enrollee fraudulently uses his membership card or knowingly permits his membership card to be used by others. The dental plan organization may terminate an enrollee's coverage if the enrollee fraudulently uses his membership card or knowingly permits his membership card to be used by others. The dental plan organization may not terminate coverage for an entire family because a dependent fraudulently uses the membership card. In this instance, only the dependent's coverage may terminate.

C. Termination Provision. A provision may be included which specifies that the dental plan organization may terminate an enrollee's coverage if the enrollee is unable to maintain a satisfactory dentist-patient relationship with a plan dentist, with this provision:

(1) Indicating that before terminating the enrollee's coverage, the dental plan organization shall permit the enrollee to change primary dentists at least once;

(2) Specifying that the enrollee shall be given written notice of the termination at least 30 days before the termination of the enrollee's membership.

D. Dependent Children Provision. If the contract provides coverage for dependent children, the contract shall also contain the following provision: “Notwithstanding any limiting age stated in the contract, any unmarried child covered under the contract as a dependent of an enrollee who is chiefly dependent for support upon the enrollee, and who, at the time of reaching the limiting age, is incapable of self-support because of mental or physical incapacity that commenced prior to the child's attaining the limiting age, shall continue to be covered under the contract while remaining so dependent, unmarried, and mentally or physically incapacitated, until the coverage on the enrollee upon whom the child is dependent terminates.”

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.08 Provider Contracts.

A. Each provider contract shall contain the provisions in §§B—G of this regulation.

B. A provision shall be included to require the provider to make an initial commitment to the plan of at least 12 months. The provider may not terminate the contract during this 12-month period unless the provider becomes unavailable during that initial time for reasons beyond the control of the dental plan organization or the provider.

C. Hold-Harmless Clause. A hold-harmless clause, which shall read substantially as follows is required: “The provider agrees that under no circumstances, including nonpayment by the dental plan organization, insolvency of the dental plan organization, or breach of this contract, shall provider seek payment from an enrollee for services rendered under this contract for other than a copayment listed in the dental benefit contract. Provider further agrees that this provision shall survive the termination of this provider contract regardless of the cause of the termination.”

D. A provision specifying when the contract becomes effective is required.

E. A provision specifying the date the contract terminates is required.

F. A renewal provision is required.

G. A provision specifying the benefits the provider shall supply the enrollees is required, specifying that:

(1) The provider shall supply services to enrollees in exchange for the copayments specified in the dental benefit contract while the provider's provider contract is in force; and

(2) After the provider contract terminates, the provider shall continue to provide services to enrollees in accordance with Insurance Article, §15-112, Annotated Code of Maryland.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.09 Contract Forms.

A. The dental plan organization:

(1) Shall provide a written dental benefit contract to each group contract holder;

(2) Shall provide a written evidence of coverage to each individual covered under a group dental benefit contract;

(3) Shall provide a written dental benefit contract to each individual who applies for individual dental coverage;

(4) Shall execute a written provider contract with each of the dental plan organization's plan dentists;

(5) May not deliver or issue for delivery in this State any of the following forms unless the form has been filed with and approved by the Insurance Commissioner:

(a) Dental benefit contract,

(b) Evidence of coverage,

(d) Application form, and

(e) Riders or endorsement forms.

B. The Commissioner shall disapprove any form filed, or withdraw any previous approval, if the form:

(1) Contains or incorporates by reference, when the incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract;

(2) Has any title, heading, or other indication of its provisions which is likely to mislead the contract holder or individual;

(3) Contains an inequitable provision or a provision without substantial benefit to the contract holder;

(4) Is printed or otherwise reproduced in a manner as to render any provision of the form substantially illegible;

(5) Includes benefit provisions which are unreasonable in relation to the premium or subscription fee charged; or

(6) Is a provider contract which does not provide for the rendering of covered services in a reasonable manner.

Cross References

31.12.04.10A

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

COMAR 31.12.04.10 Filing Requirements for Premium Rates and Subscription Fees.

A. The filing of any dental plan contract or rider or endorsement by a dental plan organization in accordance with Regulation .09A(5) of this chapter shall be accompanied by the filing of premium rates or subscription fees.

B. A subsequent change in premium rates or subscription fees shall be filed with supporting data at least 30 days before the change is proposed to become effective.

History

Administrative History: Effective date: September 16, 1991 (18:18 Md. R. 2004)
Administrative History: Chapter recodified from COMAR 09.30.82 to COMAR 31.12.04 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04 amended effective August 2, 2004 (31:15 Md. R. 1187); August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05 repealed and new Regulation .05 adopted effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .06A amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .07B amended effective August 2, 2004 (31:15 Md. R. 1187)
Administrative History: Regulation .08G amended effective August 2, 2004 (31:15 Md. R. 1187)
Authority: Insurance Article, §§2-109, 14-124(b), 14-410, 14-412, 15-112(b)(1)(i), 15-122(b), 15-833(j),and Title 15, Subtitles 10A and 10D, Annotated Code of Maryland

31.12.05 Dental Benefit Plan Coverage — Mandatory Point-of-Service Option

COMAR 31.12.05.01 Scope.

This chapter applies to health maintenance organizations and dental plan organizations operating in this State.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 1996 (23:14 Md. R. 1005); adopted permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.21 to COMAR 31.12.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Insurance Article, §§2-109 and 15-114, Annotated Code of Maryland

COMAR 31.12.05.02 Required Notice.

A. When a health maintenance organization or dental plan organization dental provider panel is the sole dental provider panel offered to group members by a group policyholder, the dental plan organization or the health maintenance organization:

(1) Shall offer the group policyholder a dental point-of-service option for the individual group member to accept or reject;

(2) May not impose a minimum participation level on the mandatory dental point-of-service option; and

(3) As part of the application, shall provide to each group policyholder the disclosure statement described in §B of this regulation, for each dental point-of-service option offered.

B. The notice shall read as follows:

Under Maryland law, if you choose a point-of-service option for your group members, your group member may select a dental point-of-service option as an additional benefit. A dental point-of-service option allows your group members to obtain dental care services from dentists and other providers outside the dental provider panel under certain circumstances that are described in Attachment A.

You have the choice to either pay for this point-of-service option, pay a percentage of the cost of this option, or require your group members to pay for the entire cost of this option. The cost of the dental point-of-service option described in Attachment A is identified in your proposal.

I HAVE READ AND UNDERSTAND THIS DISCLOSURE STATEMENT AND, IF I HAVE CHOSEN THE POINT-OF-SERVICE OPTION, I WILL PROVIDE NOTICE OF THE AVAILABILITY OF THIS ADDITIONAL BENEFIT TO MY ELIGIBLE GROUP MEMBERS.

| ________________ | ___________________________ | | --- | --- | | Date | Group Policyholder |

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 1996 (23:14 Md. R. 1005); adopted permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.21 to COMAR 31.12.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Insurance Article, §§2-109 and 15-114, Annotated Code of Maryland

COMAR 31.12.05.03 Record Retention.

Each health maintenance organization or dental plan organization shall maintain copies of the notice and the group policyholder response for a period of 3 years or until its next market conduct examination, whichever occurs first.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.03 adopted as an emergency provision effective July 1, 1996 (23:14 Md. R. 1005); adopted permanently effective November 4, 1996 (23:22 Md. R. 1496)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.21 to COMAR 31.12.05 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective August 3, 2015 (42:15 Md. R. 1019)
Authority: Insurance Article, §§2-109 and 15-114, Annotated Code of Maryland

31.12.06 Managed Care Organizations — Financial Compliance Requirements

COMAR 31.12.06.01 Definitions.

A. All terms defined in Health-General Article, Title 15, Subtitle 1, Annotated Code of Maryland, which are used in this chapter have the same meaning as in that statute unless the terms are defined differently in this chapter. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Administration” means the Maryland Insurance Administration.

(2) “Applicant” means an organization applying to become a managed care organization.

(3) “Commissioner” means the Maryland Insurance Commissioner.

(4) “Contract” means the contractual agreement for the provision of health care services on a prepaid, capitated basis entered into between a managed care organization and the Maryland Department of Health to provide health care benefits only to medical assistance program recipients.

(5) “Department” means the Maryland Department of Health.

(6) “Leasehold estate improvements” means capital improvements made to properties leased for 20 or more years and depreciated over the remaining life of the lease.

(7) “Managed care organization (MCO)” means a managed care organization as defined in Health-General Article, §15-101(e)(2), Annotated Code of Maryland.

(8) “NAIC” means the National Association of Insurance Commissioners.

(9) “Secretary” means the Secretary of Health.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.02 Financial Requirements.

A. An applicant or MCO may not engage in business as an MCO unless determined by the Insurance Commissioner to be in compliance with the financial requirements of Health-General Article, §15-102.4, Annotated Code of Maryland.

B. Upon request, the MCO shall submit to the Administration the following documents:

(1) A copy of the articles of incorporation of the applicant or MCO and any amendments to it, certified by the Maryland Department of Assessments and Taxation;

(2) A copy of the applicant's or MCO's current bylaws, if any, certified by the appropriate officer of the applicant or MCO;

(3) A list of the names, addresses, and official capacity with the applicant or MCO of the individuals who are to be responsible for the conduct of the applicant's or MCO's affairs, including the members of the governing body, the officers, and directors;

(4) A resume of the qualifications of the administrator, the medical director, officers, and other individuals associated with the applicant or MCO as requested by the Commissioner and the Department;

(5) A statement generally describing the:

(a) Applicant or MCO and its corporate structure;

(b) Applicant's or MCO's operations;

(d) Number of physicians and personnel engaged or contracted with to provide health care services;

(6) A statement describing with reasonable certainty the geographic area or areas to be served by the applicant or MCO;

(7) A financial statement audited by an independent certified public accountant of the financial condition of the applicant or MCO, including:

(a) Assets, liabilities, and minimum tangible net equity;

(b) A prospective budget and expected cash flow analysis of the applicant or MCO for the first 24 months of its anticipated operation demonstrating its financial viability based on reasonable assumptions; and

(8) A power of attorney duly executed by the applicant or MCO appointing the Commissioner and the Commissioner's authorized deputies as the true and lawful attorney of the MCO in and for the State upon whom may be served all lawful process in any action, proceeding, or cause of action arising in this State against the MCO regarding the solvency and financial condition of the MCO; and

(9) A certificate of compliance evidencing employee coverage under Labor and Employment Article, §9-105, Annotated Code of Maryland.

C. The list under §B(3) of this regulation shall include a full disclosure to the Commissioner of the extent and nature of any contracts or arrangements between any person listed in §B(3) of this regulation and the applicant or MCO, including any possible conflicts of interest. The applicant or MCO shall continually update the information required under §B(3)(a) of this regulation and make it available to the Commissioner at the Commissioner's request.

D. Insurance—General Liability and Medical Malpractice.

(1) With the application, an applicant or MCO shall submit evidence of insurance for general liability and medical malpractice insurance.

(2) The minimum limits of coverage shall be $1 million for any one loss and $3 million in the aggregate.

(3) Evidence of renewal of coverage for the current year shall be submitted with the annual report.

E. Financial Requirements. In order to qualify for a determination of financial compliance, the applicant or MCO shall, at the time of making its initial application, demonstrate to the satisfaction of the Commissioner that the applicant or MCO has on hand sufficient liquid funds or a reasonably adequate cash flow to meet all organizational and administrative expenses incurred or expected to be incurred before commencing operations.

F. Determination of Financial Condition.

(1) In a determination of the financial condition of an applicant or MCO, only the following shall be considered as admitted assets for both applicants and, on an ongoing basis, for MCOs:

(a) Cash, in the possession of the applicant or MCO or in transit under its control, and the balance of any deposit of the applicant or MCO in a solvent Maryland bank or trust company;

(b) Amounts due and payable to the applicant or MCO under contracts with the Department, net of any Department withholds, on the date the amounts become due and payable, but not more than 90 days past due;

(c) Medical, surgical, and dental equipment, net of depreciation, and net of any liens, encumbrances, pledges, or judgments, that is used directly to provide health care benefits to medical assistance beneficiaries;

(d) Prepaid charges on health care contracts with hospitals, or other health care institutions when approved by the Commissioner, including premiums prepaid for malpractice or general liability insurance;

(e) Pharmaceutical and medical supply inventories;

(f) Cost of land and depreciated cost of buildings owned and occupied by the applicant or MCO and used by it to directly provide health care, in excess of any encumbrances on it in an amount not greater than 20 percent of total admitted assets as reported by the applicant or MCO for:

(i) An existing MCO as reported in its annual statement as of December 31 preceding the date of acquisition, or

(ii) An applicant MCO as reported in the certified audited financial statement submitted as part of the application;

(g) Leasehold estate improvements not exceeding 20 percent of total admitted assets as reported by the applicant or MCO for:

(i) An existing MCO as reported in its annual statement as of December 31 preceding the date of acquisition to the extent that the initial cost is amortized over the useful life of the improvements but not beyond the termination of the lease, or

(ii) An applicant MCO as reported in the certified audited financial statement submitted as part of the application;

(h) Electronic, mechanical, and computer hardware, and any operating system software, used for data processing and accounting purposes, which is free and clear of any liens, encumbrances, pledges, or judgments, the cost of which shall be depreciated in full over a period not to exceed 5 calendar years;

(i) Other assets, not inconsistent with the provisions of §§H and I of this regulation, deemed by the Commissioner available for the provision of health care, at values to be determined by the Commissioner.

(2) Investments and securities owned and held by the applicant or MCO, must be held free and clear of any liens, encumbrances, pledges or judgments, and the income due or accrued thereon. No investment shall be made or engaged in by any domestic applicant or MCO unless the same have been authorized or ratified by the board of directors or by a committee thereof charged with the duty of supervising investments. All investments of the applicant or MCO may be held in a custodial account pursuant to the requirements of COMAR 31.04.09, Annotated Code of Maryland.

G. Assets Not Admitted.

(1) The following may not be considered as admitted assets in the determination of the financial condition of an applicant or MCO:

(a) Good will, trade names, and other like intangible assets;

(b) Advances to officers, whether secured or not, and advances to employees, agents, and other persons on personal security only;

(c) The amount, if any, by which the aggregate book value of the investments as carried in the ledger assets of the applicant or MCO exceeds the aggregate value as reported in the applicant or MCO's annual statement;

(d) Office or administrative furniture and fixtures, leasehold improvements other than leasehold estate improvements which qualify under §F(1)(g) of this regulation, vehicles, and maintenance equipment;

(e) Amount estimated as receivable under coordination of benefits and subrogation provisions; and

(f) Any other amounts receivable in excess of 90 days past due.

(2) All assets not allowed and all other assets of doubtful value or character included in any statement by an applicant or MCO to the Commissioner, or in any examiner's report to the Commissioner, shall also be reported to the extent of the value disallowed, as deductions from the gross assets of the applicant or MCO.

H. Liabilities Chargeable Against Assets. In any determination of the financial condition of an applicant or MCO, liabilities to be charged against its assets shall include but not be limited to:

(1) The estimated amount necessary to pay for all accrued benefits to enrollees and all claims, both reported or unreported, incurred on or before the date of the statement, together with estimated costs of adjusting or settling disputed claims;

(2) The pro rata amount of premium charges paid by or on behalf of enrollees for any period of coverage beyond the date of the statement; and

(3) Any other liabilities, including but not limited to federal income taxes, payroll taxes, expenses, and other obligations due or accrued at the date of the statement.

I. Deposit of Securities. Every MCO to be considered in compliance with financial requirements shall deposit and maintain in trust with the State Treasurer, for the protection of its enrollees or its enrollees and creditors, cash or government securities of the type described in Insurance Article, §5-701(b), Annotated Code of Maryland, in the market value amount of $100,000.

J. Valuation of Investments.

(1) All obligations having a fixed term and rate shall be:

(a) If purchased at par, at the par value;

(b) If purchased above or below par, on the basis of the purchased price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made.

(2) Common, preferred, or guaranteed stocks shall be valued at market value. Market value may be from the original broker-dealer transaction advice and one of the following:

(a) A nationally recognized rating agency such as Moody's Investor Service, Standard and Poor's Corporation, or any other similar organization approved by the Maryland Insurance Administration at the request of the MCO;

(b) A nationally recognized publication such as the Wall Street Journal or Barron's; or

(3) The written documentation substantiating the values reported by the MCO in the annual and/or quarterly statements shall be maintained by the MCO and readily available for review by the Insurance Administration at financial examinations.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.02-1 Risk-Based Capital Requirements.

A. Health Insurer. In this regulation, the term “health insurer” has the meaning stated in Insurance Article, §4-301(g), Annotated Code of Maryland.

B. Requirements Applicable to MCOs. Unless exempted by the Insurance Commissioner, beginning with the Annual Statement filed for the year ending December 31, 2001, an MCO shall comply with the risk-based capital requirements of Insurance Article, Title 4, Subtitle 3, Annotated Code of Maryland, in the same manner as a health insurer.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.03 Application of Maryland Insurance Acquisitions Disclosure and Control Act.

A. Exemption. If the Commissioner determines that this regulation or a part of this regulation is not intended to apply to a managed care organization or affiliate, the Commissioner may exempt the managed care organization or affiliate from this regulation or the part of this regulation.

B. In this regulation, the following terms have the meanings indicated:

(1) “Holding company” means a person that directly or indirectly controls a managed care organization, or controls a person that controls a managed care organization.

(2) “Holding company system” means two or more affiliates, at least one of which is a managed care organization.

C. Subject to this regulation, the provisions of Insurance Article, Title 7, Annotated Code of Maryland apply to managed care organizations.

D. Change of Ownership.

(1) An MCO shall notify the Commissioner within 10 days of any transfer of ownership or of more than an aggregate of 10 percent of the stock or ownership interest in the MCO to a purchaser occurring during any 12-month period.

(2) An MCO shall comply with the procedures required by Insurance Article, Title 7, Annotated Code of Maryland, before the purchaser may:

(a) Make a tender for, or a request or invitation for tenders of, or enter into an agreement to exchange securities for, or acquire in the open market or otherwise, any voting security of a domestic MCO or enter into any other such agreement if, after the consummation thereof, that purchaser would, directly or indirectly, or by conversion, or by exercise of any right to acquire, be in control of the domestic MCO; or

(b) Enter into an agreement to merge or consolidate with, or otherwise to acquire control of, a domestic MCO.

(3) Before approval of any transfer of ownership, stock, or ownership interest in an MCO, the Commissioner shall consult with the Secretary.

E. Registration Statements.

(1) Each managed care organization that is a member of a holding company system shall file a registration statement with the Commissioner on or before:

(a) July 31, 2004; and

(b) May 1 of each year after 2004.

(2) The registration statement shall be in a form similar to that required under Insurance Article, §7-603, Annotated Code of Maryland, containing the following current information:

(a) The corporate and capital structure, general financial condition, ownership, and management of the managed care organization and of any person controlling the managed care organization;

(b) The identity and relationship of each member of the holding company system;

(c) Any pledge of the managed care organization's stock, including stock of a subsidiary or controlling affiliate, for a loan made to any member of the holding company system;

(d) The following agreements in force, and transactions currently outstanding or that have occurred during the previous calendar year between the managed care organization and the managed care organization's affiliates:

(i) Loans, other investments, purchases, sales, and exchanges of securities of the affiliates by the managed care organization or of the managed care organization by its affiliates;

(ii) Purchases, sales, and exchanges of assets;

(iii) Transactions not in the ordinary course of business;

(iv) Except for managed care contracts entered into in the ordinary course of the managed care organization's business, guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure to liability of the managed care organization's assets;

(v) Management agreements, service contracts, and cost-sharing arrangements;

(vi) Reinsurance agreements;

(vii) Dividends and other distributions to shareholders; and

(viii) Consolidated tax allocation agreements;

(e) Any other matters about transactions between the managed care organization and its affiliates that the registration statement form requires; and

(f) A summary outlining all items in the current registration statement that represent changes from the prior registration statement.

(3) Each affiliate in a holding company system shall give a managed care organization subject to registration under this section that is in the same holding company system complete and accurate information if that information is reasonably necessary to enable the managed care organization to comply with this regulation.

(4) The Commissioner may allow or require affiliated managed care organizations subject to registration under this section to file a consolidated registration statement.

F. Agreements in Force.

(1) As part of its initial registration statement, each managed care organization shall report each agreement in force as of December 31, 2002, pertaining to the transactions specified in §E(2)(d) of this regulation, between the managed care organization and any other member of its holding company system.

(2) Each agreement in force reported under §E(2)(d) of this regulation and otherwise subject to prior approval of the Commissioner, shall be deemed approved as of the date the initial registration is filed with the Commissioner.

(3) Notwithstanding §F(2) of this regulation, the Commissioner retains the right to request the managed care organization to submit any of the reported agreements in force to the Commissioner for review.

G. A transaction specified in Insurance Article, §7-703(e), Annotated Code of Maryland, between a managed care organization and another member of the same insurance holding company system is subject to the requirements of Insurance Article, §7-703(b)—(d), Annotated Code of Maryland, if the projected annual amount of the transaction equals or exceeds the lesser of 3 percent of the managed care organization's admitted assets, or 25 percent of its surplus as regards policyholders as of the December 31 immediately preceding the transaction.

H. Agreements Between MCOs and Health Care Providers.

(1) Except as provided in §H(2) of this regulation, the provisions of Insurance Article, §7-703, Annotated Code of Maryland, do not apply to agreements entered into between a managed care organization and a provider of health care services that is a member of the same holding company system, if the rates paid to the provider are regulated by the Health Services Cost Review Commission.

(2) The Commissioner may require the managed care organization to submit an agreement under this section to the Commissioner for review.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.04 Annual and Interim Financial Reports.

A. On or before March 1 of each year, each MCO operating under a contract with the Department shall file, in duplicate, a report that includes a consolidated financial statement.

B. The Commissioner may require interim statements of the MCOs, on such points as the Commissioner deems necessary and proper at any time during the period between the filing of annual statements.

C. The report shall:

(1) Cover the MCO and all of its affiliates and subsidiaries;

(2) Consist of the financial statements of the MCO, and all of its affiliates and subsidiaries, prepared in accordance with statutory accounting principles on a form approved by the Commissioner and certified by an independent certified public accountant as to the financial condition, transactions, and affairs of the MCO and its affiliates and subsidiaries for the immediately preceding calendar year;

(3) Provide a list of the total compensation from the MCO, including all cash and deferred compensation stock, and stock options in addition to salary, of each member of the board of directors of the MCO, and each senior officer of the MCO, or any subsidiary of the MCO, as designated by the Commissioner;

(4) Contain loss ratios for medical assistance business as required under Insurance Article, §15-605, Annotated Code of Maryland;

(5) Be on the form adopted by the Commissioner;

(6) Be supplemented with a description of any changes in the information submitted with the last previous annual report or with the MCO's original application for financial compliance; and

(7) Provide any other information or documents necessary to assure compliance with Health-General Article, Title 15, Subtitle 1, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.05 Financial Examination.

A. The Commissioner may make an examination of the operation of a managed care organization as often as the Commissioner deems necessary for the protection of the interest of the people of Maryland, but the examinations may not be less frequent than once every 5 years.

B. The expense of examinations shall be assessed against the MCO being examined in accordance with Health-General Article, §19-718, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

COMAR 31.12.06.06 Rehabilitation or Liquidation of an MCO.

Any rehabilitation or liquidation of an MCO shall be:

A. Deemed to be the rehabilitation or liquidation of a health maintenance organization; and

B. Subject to the requirements of Health-General Article, §19-706.1, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective February 10, 1997 (24:3 Md. R. 186)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.31.24 to COMAR 31.12.06 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02-1 adopted effective August 20, 2001 (28:16 Md. R. 1484)
Administrative History: Regulation .03 amended effective May 24, 2004 (31:10 Md. R. 796)
Authority: Health-General Article, §§15-102.3, 15-102.4(d), and 15-102.6; Insurance Article, §§2-109 and 4-311(b)(2);Annotated Code of Maryland Ch. 331, §3, Acts of 2000

31.12.07 Required Standard Provisions

COMAR 31.12.07.01 Scope.

This chapter applies to all health maintenance organizations operating in this State.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Coverage period” means the interval of time the individual contract or group contract provides protection, in exchange for the payment of a particular premium.

(1-1) Group Contract.

(a) “Group contract” means a contractual agreement entered into between an HMO and an employer, union, trustee, association, or other organization for the provision of health care services on a prepaid basis to:

(i) Subscribers of the group contract holder; or

(ii) Subscribers of the group contract holder and the subscriber's dependents.

(b) “Group contract” includes a small employer health benefit plan as defined in Insurance Article, §15-1201, Annotated Code of Maryland.

(2) “Group contract holder” means the entity to whom the group contract is issued.

(3) “HMO” means a health maintenance organization.

(4) “Individual contract” means a contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber covering:

(a) The subscriber;

(b) The subscriber and the subscriber's dependents; or

(5) “Member” means an individual entitled to receive health care benefits from the HMO under an individual or group contract.

(6) “Subscriber” means for:

(a) Group contracts, the individual who is eligible to be covered under the contract, other than as a dependent, by reason of satisfying the eligibility requirements of the group contract; and

(b) Individual contracts, the individual to whom the HMO contract is issued.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.03 Required Standard Provisions.

A. A group contract may not be delivered in Maryland unless it contains in substance the provisions:

(1) Listed in Regulation .04 of this chapter; or

(2) Which in the opinion of the Commissioner, as compared to the provisions in Regulation .04 of this chapter, are:

(a) More favorable to the members, or

(b) At least as favorable to the members and more favorable to the group contract holder.

B. An individual contract may not be delivered in Maryland unless it contains in substance the provisions:

(1) Listed in Regulation .05 of this chapter; or

(2) Which in the opinion of the Commissioner, as compared to the provisions in Regulation .05 of this chapter, are at least as favorable to the subscriber and members.

(1) Omit from the contract the inapplicable provision or part of the provision; or

(2) Modify the inconsistent provision or part of the provision to make it consistent with the coverage provided by the contract.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.04 Group Contract Standard Provisions.

A. Entire Contract; Changes. Each group contract shall contain a provision that specifies:

(1) Which documents constitute the entire contract; and

(2) That a change in the contract may not be valid:

(a) Until approved by an executive officer of the HMO, and

(b) Unless the approval is endorsed on the contract or attached to the contract.

B. Contestability of the Contract.

(1) Each group contract shall contain a provision that:

(a) The contract may not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue;

(b) A statement made by a member covered under the contract relating to insurability may not be used in contesting the validity of the coverage with respect to which the statement was made after the coverage has been in force before the contest for a period of 2 years during the member's lifetime;

(c) Absent fraud, each statement made by an applicant, group contract holder, or member is considered to be a representation and not a warranty; and

(d) A statement made to effectuate coverage may not be used to avoid the coverage or reduce benefits under the contract unless:

(i) The statement is contained in a written instrument signed by the group contract holder or member, and

(ii) A copy of the statement is given to the group contract holder or member.

C. Notice of Claim.

(1) Each group contract shall contain a provision describing how and when a claim form can be requested from the HMO.

(2) If the HMO requires written notice of claim for the HMO to send a claim form to the claimant, the provision shall indicate that:

(a) The written notice of claim is not required before 20 days after the occurrence or commencement of the loss covered by the contract; and

(b) The HMO may not invalidate or reduce a claim if it is shown that:

(i) It was not reasonably possible to give notice within 20 days, and

(ii) Notice was given as soon as was reasonably possible.

D. Claim Forms. Each group contract shall contain a provision that:

(1) The HMO shall provide claim forms for filing proof of loss to each claimant or to the group contract holder for delivery to the claimant; and

(2) If the HMO does not provide the claim forms within 15 days after notice of claim is given, the claimant is considered to have complied with the requirements of the contract as to proof of loss if the claimant submits, within the time fixed in the contract for filing proof of loss, written proof of the occurrence, character, and extent of the loss for which the claim is made.

E. Proofs of Loss. Each group contract shall contain a provision that:

(1) Written proof of loss shall be furnished to the HMO at its office within 90 days after the date of the loss; and

(2) Failure to furnish the proof within the time required does not invalidate or reduce any claim if it was not reasonably possible to give proof within the required time, if the proof is furnished as soon as reasonably possible and, except in the absence of legal capacity, not later than 1 year from the time proof is otherwise required.

F. Time of Payment of Claims. Each group contract shall contain a provision that benefits payable under the contract for any loss will be paid not more than 30 days after receipt of written proof of loss.

G. Payment of Claims.

(1) Each group contract shall contain a provision that all benefits, other than those described in §G(2) of this regulation, will be paid to the health care provider who rendered the services.

(2) The provision may indicate that, if the member has paid the health care provider for services rendered, benefits will be payable to the member.

H. Legal Action. Each group contract shall contain a provision that an action at law or in equity may not be brought:

(1) To recover on the contract before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the contract; or

(2) After the expiration of 3 years after the written proof of loss is required to be furnished.

I. Grace Period.

(1) Each group contract shall contain in substance the following provision: “Grace Period: A grace period of 30 days will be granted for payment of each premium due after the first premium, unless the HMO does not intend to renew the contract beyond the period for which premiums have been accepted and notice of the intention not to renew is delivered to the group contract holder at least 45 days before the premium is due. During the grace period the contract shall continue in force.”

(2) Any additional provisions related to the grace period shall be expressly stated in the contract subject to the following limitations:

(a) Unless the HMO receives a notice of the group contract holder's intention to terminate the contract before the end of the grace period, the HMO may collect premiums for the 30-day grace period;

(b) If the HMO receives a notice of intention to terminate the contract during the grace period, the HMO may collect premiums for the period beginning on the first day of the grace period until the date on which notice is received or the date of termination stated in the notice, whichever is later; and

(c) If premiums for the 30-day grace period are paid after the grace period ends, the HMO may charge interest for the premium, but:

(i) Interest may not begin to accrue during the 30-day grace period, and

(ii) The interest rate charged may not exceed an effective rate of 6 percent per year.

J. Certificates. Each group contract shall contain a provision that:

(1) Unless the HMO makes delivery directly to the employee or member, the HMO will provide to the group contract holder, for delivery to each employee or member of the group, a statement that summarizes the benefits and rights which pertain to the members covered under the group contract; and

(2) If dependents are included in the coverage, only one statement need be issued for each family unit.

K. Addition of Employees/Members. Each group contract shall contain a provision that eligible new employees, members, or dependents may be added periodically to the group originally covered in accordance with the terms of the contract.

L. Misstatement of Age. If the premiums or benefits vary by age, each group contract shall contain a provision specifying an equitable adjustment of premiums or benefits to be made in the event the age of a member has been misstated.

M. Premium Due Date.

(1) Each group contract shall specify the premium due date.

(2) The premium due date shall be the date the coverage period begins.

(3) An HMO may offer each group contract holder the option to pay the premium through an electronic payment.

(4) If the group contract holder elects an electronic payment, the HMO may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the group contract holder.

Cross References

14.35.01.02B(23)(g)

31.12.07.03A(1)

31.12.07.03A(2)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.05 Individual Contract Standard Provisions.

A. Each individual contract shall contain in substance the provisions set forth in Regulation .04C, E, F, G, H, and L of this chapter.

B. Entire Contract; Changes. Each individual contract shall contain in substance the following provision: “Entire contract; changes: This agreement, including the endorsements and the attached papers, if any, constitutes the entire contract. No change in this agreement shall be valid until approved by an executive officer of the HMO and unless such approval is endorsed on the agreement or attached to the agreement. No agent has authority to change this agreement or to waive any of its provisions.”

C. Contestability of the Contract.

(1) Each individual contract shall contain in substance a provision that:

(a) The contract may not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue;

(b) Absent fraud, each statement made by an applicant or member is considered to be a representation and not a warranty; and

(c) A statement made to effectuate coverage may not be used to avoid the coverage or reduce benefits under the contract unless:

(i) The statement is contained in a written instrument signed by the subscriber or member, and

(ii) a copy of the statement is given to the subscriber or member.

(2) The provision required by §C(1) of this regulation does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the contract or upon other provisions in the contract.

D. Grace Period.

(2) If the contract gives the HMO the right to refuse renewal, the contract shall contain in substance the following provision: “Grace period: Unless not less than thirty days prior to the premium due date the HMO has delivered to the subscriber or has mailed to the subscriber's last address as shown by the records of the HMO written notice of its intention not to renew this contract beyond the period for which the premium has been accepted, a grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.”

(3) If an individual contract lapses due to nonpayment of premium, an HMO may not charge a premium for the time coverage continues in force under the grace period, except as permitted in the unpaid premiums provision in Regulation .08C of this chapter.

(4) An HMO must not apply the unpaid premiums provision to recover a premium due for the grace period as described in §D(3) of this regulation, unless the HMO includes the unpaid premiums provision in the individual's contract.

(5) An individual contract may not require the subscriber to notify the HMO in advance of the subscriber's intention to terminate the individual contract.

E. Reinstatement. Each individual contract shall contain in substance the following provision: “Reinstatement: If any renewal premium is not paid in full within the time granted the subscriber for payment, a later acceptance of premium in full by the HMO or by any agent authorized by the HMO to accept the premium, without requiring a reinstatement application in connection with the acceptance of the premium in full, shall reinstate the contract. However, if the HMO or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the contract will be reinstated upon approval of the application by the HMO or, lacking approval, upon the forty-fifth day following the date of the conditional receipt unless the HMO has previously notified the subscriber in writing of its disapproval of the reinstatement application. The subscriber and HMO shall have the same rights under the reinstated contract as they had under the contract immediately before the due date of the defaulted premium, subject to any provisions endorsed on the contract or attached to the contract in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty days prior to the date of reinstatement.”

F. Claims Forms. Each individual contract shall contain in substance the following provision: “Claim forms: The HMO, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If claim forms are not furnished within fifteen days after the giving of notice, the claimant shall be deemed to have complied with the requirements of this contract as to proof of loss upon submitting, within the time fixed in the contract for filing proof of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made.”

G. Age Limit; Misstatement of Age.

(1) Each individual contract shall state that the contract will continue in effect until the end of the period for which the HMO has accepted the premium if an individual contract establishes, as an age limit or otherwise, a date after which the coverage provided by the contract will not be effective and:

(a) The date falls within a period for which the HMO accepts a premium for the contract; or

(b) The HMO accepts a premium for the contract after the date specified in this section.

(2) Each individual contract shall state that the liability of the HMO is limited to the refund, on request, of the premiums paid for the period not covered by the contract if the age of the member is misstated and according to the correct age of the member, the coverage provided by the contract would:

(a) Not have become effective; or

(b) Have ceased before the acceptance of the premium for the contract.

H. Premium Due Date.

(1) Each individual contract shall specify the premium due date.

(2) The premium due date shall be no earlier than the date the coverage period begins.

(3) An HMO may offer each subscriber the option to pay the premium through an electronic payment.

(4) If the subscriber elects an electronic payment, the HMO may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the subscriber.

Cross References

14.35.01.02B(23)(d)

14.35.07.11G(5)(a)(ii)

14.35.15.06F(2)(b)

31.12.07.03B(1)

31.12.07.03B(2)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.06 Limitations and Exclusions.

A. Crime.

(1) An individual or group contract may not include a limitation or exclusion for loss to which a contributing cause was the member's commission of or attempt to commit a crime.

(2) An individual or group contract may not include a limitation or exclusion for loss for which a contributing cause was the commission of or the attempt to commit a crime by an individual other than the member.

B. Illegal Occupation. An individual or group contract may not include a limitation or exclusion for loss to which a contributing cause was the member being engaged in an illegal occupation.

C. Intoxicants and Narcotics or Use of Intoxicants or Narcotics.

(1) An individual or group contract may not include a limitation or exclusion for loss sustained or contracted in consequence of the member being intoxicated or under the influence of any drug.

(2) An individual or group contract may not include a limitation or exclusion for loss due to:

(a) The use of alcohol;

(b) The use of drugs or narcotics; or

D. Preexisting Conditions. An individual or group contract may not include a limitation or exclusion for a preexisting condition.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.07 Group Contract Optional Provisions.

A. An HMO may include in group contracts any of the optional provisions described in §§C and D of this regulation.

B. An HMO may not include in a group contract an optional provision dealing with the same subjects set forth in §§C and D of this regulation if the provision is drafted in a manner that is less favorable to the group contract holder, subscriber, or member than the corresponding optional provision set forth in §§C and D of this regulation.

C. Physical Examination.

(1) An HMO may include a provision in a group contract giving the HMO the right to examine the person of the member when and as often as it may reasonably require during the pendency of a claim under the contract.

(2) If the HMO includes the provision described in §C(1) of this regulation, the provision shall indicate that any physical examination required by the HMO will be performed at the expense of the HMO.

D. Arbitration.

(1) An HMO may include a provision in a group contract giving the group contract holder or the member the option of entering binding arbitration to settle a dispute with the HMO.

(2) If the HMO includes the provision described in §D(1) of this regulation, the provision may not require the group contract holder or the member to enter binding arbitration.

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

COMAR 31.12.07.08 Individual Contract Optional Provisions.

A. An HMO may include in an individual contract any of the optional provisions described in Regulation .07C and D of this chapter and §C of this regulation.

B. An HMO may not include in an individual contract an optional provision dealing with the same subjects set forth in Regulation .07C and D of this chapter and §C of this regulation if the provision is drafted in a manner that is less favorable to the subscriber or member than the corresponding optional provision set forth in Regulation .07C and D of this chapter and §C of this regulation.

C. Unpaid Premiums. An individual contract may contain the following provision: “Unpaid premiums: Upon the payment of a claim under this contract, any premium then due and unpaid or covered by any note or written order may be deducted from the claim payment.”

Cross References

31.12.07.05D(3)

History

Administrative History: Effective date: October 30, 2000 (27:21 Md. R. 1979)
Administrative History: Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760)
Administrative History: Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019)
Administrative History: Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439)
Administrative History: Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402)
Administrative History: Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)
Authority: Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland

31.12.08 Payments to Nonparticipating Providers

COMAR 31.12.08.01 Applicability.

This chapter applies to covered services paid by health maintenance organizations to nonparticipating providers for services provided on or after January 1, 2010.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

COMAR 31.12.08.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Berenson-Eggers Type of Service Code” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

(2) “CPT code” means the Current Procedural Terminology Code maintained and distributed by the American Medical Association, including its codes and modifiers, and codes for anesthesia services.

(3) “Enrollee” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

(4) “Evaluation and management services” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

(5) “Geographic area” means each geographic area as published by the Centers for Medicare and Medicaid Services.

(6) “HCPCS” means the Healthcare Common Procedure Coding System, a set of health care procedure codes based on the American Medical Association's Current Procedural Terminology and other services such as ambulance services, prosthetic devices, other supplies, and non-physician services that are not covered by CPT codes but are recognized and maintained by the Centers for Medicare and Medicaid Services.

(7) “Health maintenance organization” has the meaning stated in Health-General Article, §19-701, Annotated Code of Maryland.

(8) “Medicare Economic Index” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

(9) “Nonparticipating provider” means a provider other than a hospital or trauma physician who is not included on the provider panel of a health maintenance organization.

(10) “Participating provider” means a provider other than a hospital or trauma physician who is included on the provider panel of a health maintenance organization.

(11) “Provider” means a health care practitioner licensed, certified, or otherwise authorized by law to provide health care services.

(12) “Provider panel” has the meaning stated in Insurance Article, §15-112, Annotated Code of Maryland.

(13) “Reference year” means, for services provided in a particular calendar year, the period beginning with July 1 of the second previous calendar year through June 30 of the previous calendar year.

(14) “Similarly licensed provider” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

(15) “Trauma physician” has the meaning stated in Health-General Article, §19-710.1, Annotated Code of Maryland.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

COMAR 31.12.08.03 Payment to Nonparticipating Providers.

A. A health maintenance organization shall calculate the amount owed to a nonparticipating provider for covered evaluation and management services provided to an enrollee in accordance with Regulation .05 of this chapter.

B. A health maintenance organization shall calculate the amount owed to a nonparticipating provider for covered services other than evaluation and management services provided to an enrollee in accordance with Regulation .06 of this chapter.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

COMAR 31.12.08.04 Annual Rate Schedule.

A. Each year, beginning with January 1, 2010, each health maintenance organization shall develop an annual rate schedule for each geographic area.

B. The annual rate schedule required by §A of this regulation shall include a rate for each occurrence of a CPT code or HCPCS code that describes covered services for each type of similarly licensed provider in the same geographic area derived in accordance with the formula specified in §C of this regulation.

C. The rate in the annual rate schedule for each CPT code or HCPCS code shall be developed as follows:

(1) For each type of similarly licensed provider, the rate paid for the CPT code or HCPCS code shall be equal to the total amount allowed for the occurrences of the CPT code or HCPCS code to participating providers who are similarly licensed providers in the same geographic area during the reference year divided by the total number of occurrences paid for the same CPT code or HCPCS code to participating providers who are similarly licensed providers in the same geographic area during the reference year.

(2) For any new CPT code or HCPCS code, the rate paid for the CPT code or HCPCS code shall be equal to 125 percent of the rate paid to a similarly licensed provider in the same geographic area.

D. By not later than December 31 of each year, each health maintenance organization shall provide written certification to the Insurance Commissioner, signed by an individual with the authority to bind the health maintenance organization that the:

(1) Annual rating schedule applicable to the year in which the certification is made is, to the best of that individual's knowledge, information, and belief, compliant with this regulation; and

(2) Individual making the certification has undertaken an adequate inquiry to make the required certification.

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

COMAR 31.12.08.05 Evaluation and Management Services.

A. If a nonparticipating provider submits a claim to a health maintenance organization for a covered evaluation and management service, the health maintenance organization shall pay the nonparticipating provider, less any applicable copayment, coinsurance or deductible amount, an amount not less than the greater of:

(1) 125 percent of the fee for the covered evaluation and management service in the annual fee schedule applicable to similarly licensed providers in the same geographic area; or

(2) 140 percent of the fee for the covered evaluation and management service paid by Medicare as published by the Centers for Medicare and Medicaid Services as of August 1, 2008, inflated by the four quarter moving average percent change in the Medicare Economic Index from 2008 to the current year.

B. The Maryland Health Care Commission may publish on its website each year by October 15:

(1) A list of covered services that qualify as Berenson-Eggers Type of Service Code evaluation and management services; and

(2) The inflation factor applicable for inflating 2008 fees to the current year using four quarter moving average percent change for the previous calendar year second quarter.

Cross References

31.12.08.03A

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

COMAR 31.12.08.06 Other Covered Services.

If a nonparticipating provider submits a claim to a health maintenance organization for a covered service other than a covered evaluation and management service, the health maintenance organization shall pay the nonparticipating provider, less any applicable copayment, coinsurance or deductible amount, an amount not less than 125 percent of the rate for the covered service in the annual rate schedule applicable to similarly licensed providers in the same geographic area.

Cross References

31.12.08.03B

History

Administrative History: Effective date:
Administrative History: Regulations .01—.06 adopted as an emergency provision effective January 1, 2010 (37:4 Md. R. 337); adopted permanently effective March 8, 2010 (37:5 Md. R. 433)
Authority: Health General Article, §19-710.1, Annotated Code of Maryland

31.13.01 Standards for Credit Life and Credit Health Insurance

COMAR 31.13.01.01 Purpose.

The purpose of this chapter is to:

A. Establish standards for premium rates for credit life and credit health insurance which are neither excessive nor inadequate in relation to benefits, giving due consideration to past and expected loss experience within and outside of this State, to underwriting practice and judgement, to past and prospective expense factors, to a reasonable margin for profit and contingencies, and to other relevant factors; and

B. Regulate certain other aspects of the credit life and credit health insurance business in order to assure that the credit life and credit health insurance operations of an insurer do not endanger the solvency of the insurer so as to render its transaction of business hazardous to its policyholders or the public, and do not adversely affect other classes of business of the insurer.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.02 Regulation of Commissions.

To assure that credit life and credit health insurance operations of insurers do not result in rates which are excessive in relation to benefits, do not endanger the solvency of insurers rendering their transaction of business hazardous to policyholders or the public, and do not adversely affect other classes of business of insurers, the Commissioner has found it necessary to establish maximum rates of commission which may be paid to agents or brokers and maximum benefits payable to creditor group policyholders in the form of dividends, retrospective rate credits, or in any other form.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.03 Applicability.

This chapter applies to all authorized life insurers and all authorized health insurers delivering or issuing for delivery or proposing to deliver or issue for delivery credit life insurance or credit health insurance in Maryland under individual policies, group policies, or group certificates which are required to be filed in accordance with the provisions of Insurance Article, §13-110, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.04 Definitions.

A. In this chapter the following terms have the meanings indicated.

B. Terms Defined.

(1) “Account” means the coverage for a single plan of benefits for either credit life insurance or credit health insurance under one premium payment method offered to a single class of business in Maryland by one creditor whether written on a group or individual basis, or both.

(2) “Advance loan payment” means the payment of a scheduled loan installment before the installment's scheduled due date on a loan repayable in substantially equal installments.

(3) “Agent” means a person who sells a group or individual policy of credit life or credit health insurance, or who receives any form of commission compensation, remuneration, or other benefit based on his enrolling individuals or issuing certificates under group credit life or credit health insurance.

(3-1) “Balloon loan” means an indebtedness, the initial amount of which includes both:

(a) An amount that decreases by substantially equal periodic payments; and

(b) A final installment amount that is larger than any one of the periodic payments.

(4) “Case” means an account, or, at the option of the insurer, a combination of some or all of the insurer's accounts written under an identical plan of benefits where the gross premiums before refunds and at prima facie rates, whether consisting of one or more accounts, exceed or may reasonably be expected to exceed $50,000 in a policy year.

(5) “Class of business” means every one of the following:

(a) Cash loans not secured by real estate made by banks;

(b) Cash loans made by credit unions;

(d) Cash loans secured by real estate made by banks;

(e) Cash loans secured by real estate made by creditors other than banks and credit unions;

(f) Production credit association and other agricultural loans;

(g) Installment sales finance contracts; or

(h) Revolving charge agreements, credit card accounts, and open-end credit other than credit union accounts.

(6) “Commission” means all forms of compensation or remuneration including dividends, retrospective rating credits, or any other form of benefit, including but not limited to:

(a) Commissions as a percentage of, or otherwise based on, premiums or amounts of insurance sold.

(b) Retrospective or refund rate credits, except credits on creditor paid insurance.

(d) Commissions or any other form of compensation or remuneration for reinsurance ceded or assumed.

(e) Service fees or administrative fees.

(f) Consulting fees.

(g) Expense allowances.

(h) Gifts.

(i) Expense for vacations or travel other than travel for training purposes or attendance at conventions.

(j) Value of electronic data-processing equipment or services furnished.

(k) Allowances or subsidies for rent, payroll, advertising, telephone, or other purposes.

(l) Advertising provided by the insurer.

(m) Supplies, excluding application, reporting and claim forms, envelopes for transmitting the forms, and brochures, rate books, and rate charts related to the insurer's credit life or credit health insurance.

(n) Dividends, profits, capital gains, commissions, or other benefits which may be reasonably anticipated under reinsurance agreements with any unauthorized reinsurer affiliated with or controlled by a licensed agent or broker, a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor or the licensed insurance agent. An unauthorized reinsurer does not include any insurer authorized to do business in this State or any insurer qualified under Insurance Article, §13-116, Annotated Code of Maryland, or any insurer meeting the qualifications of a nonadmitted accredited reinsurer.

(o) Services, including an amount paid to an employee of the insurer specifically for services provided to a creditor or affiliate of the creditor if the services are normally performed outside the home office of the insurer, but not including services performed by account executives or liaison personnel of the insurer who visit the offices of the creditor at occasional intervals and who are regular salaried officers or employees of the insurer and who receive no commission or other compensation directly dependent upon the amount of business obtained.

(p) Value of training programs for employees of the creditor or agent, excluding training of employees provided solely in connection with a program of credit life or credit health insurance for the purpose of acquainting the creditor's employees with administrative procedures of the insurer when the salary of the employees during the training period is paid by the creditor.

(q) Rental by the insurer of space or equipment from the agent or creditor, excluding rentals not related to any insurance transaction on terms approved by the Commissioner;

(r) Commission or some other form of compensation or remuneration in excess of what otherwise would be payable in connection with the sale of allied lines of insurance or other business, such as credit property insurance and maintenance warranties.

(s) Profit sharing plans.

(t) Bonuses.

(u) Finders fees.

(v) Offers of share ownership in an agency or corporation at less than the fair market value.

(7) “Commissioner” means the Maryland Insurance Commissioner.

(8) “Consumer loans” means loans issued by lenders licensed under the provisions of Financial Institutions Article, Title 11, Subtitle 2, Annotated Code of Maryland, and made pursuant to Commercial Law Article, Title 12, Subtitle 3, Annotated Code of Maryland.

(9) “Creditor-paid insurance” means insurance in which the creditor pays the insurance premium without separate charge to the debtor. A transaction will not be regarded as creditor-paid insurance if the debtor is required to pay an identifiable charge or premium for credit life or credit health insurance or if there is a differential in finance, interest, carrying, service, or other similar charge made to debtors who are in similar circumstances except for their insured or non-insured status.

(9-1) “Critical period disability insurance” means insurance on a debtor that provides indemnity for payments that are due on a specific loan or other credit transactions:

(a) For a period less than the entire term of the loan; and

(b) If the debtor is disabled as defined by the policy.

(10) “Decreasing term insurance” means insurance sold in connection with loans repayable in substantially equal installments and for which a single premium is paid in advance.

(10-1) “Earned premiums at prima facie” means the premiums that would have been earned if all earned premiums had been written at prima facie rates.

(11) “Enroller” means a person who enrolls individuals or issues certificates under group credit life or credit health insurance and who does not receive any form of commission, compensation, remuneration, or other benefit based on this activity and whose salary scale is not dependent on the volume of insurance.

(12) “Experience period” means 2 consecutive calendar years or, at the option of the insurer, 2 consecutive policy years under a group policy issued to one creditor, or under one case.

(12-1) “Joint health insurance” means health insurance issued to two co-debtors when both are jointly and severally liable for the debt.

(13) “Joint life insurance” means insurance issued to two co-debtors with an insurable interest, as defined in Insurance Article, §12-201(b), Annotated Code of Maryland, when both are jointly and severally liable for the debt.

(14) “Level term insurance” means insurance sold in connection with loans repayable in a single sum. Insurance covering a balloon loan is considered a combination of level term insurance and decreasing term insurance.

(15) “Loss ratio” means the ratio of incurred claims to premiums earned during a specified period.

(15-1) “Lump sum disability insurance” means insurance on a debtor that pays the insured outstanding debt that is due on a specific loan or other credit transaction after the debtor has been disabled as defined in the policy for a period specified in the policy.

(16) “Net payoff balance method” means decreasing term insurance sold to cover the unpaid insured principal amount of a loan plus current interest and charges as they fall due.

(16-1) “New case” means an account where the gross premiums before refunds and at prima facie premium rates exceed or may reasonably be expected to exceed $50,000 in the most recent policy year, but did not exceed $50,000 in the prior policy year.

(17) “Outstanding balance insurance” means insurance for which a separate identifiable insurance premium is paid each month based on the insured indebtedness then outstanding.

(18) Policy Year.

(a) “Policy year”, in the case of a group policy, means the period between a policy anniversary and the next succeeding policy anniversary.

(b) “Policy year”, in the case of individual policies, means a calendar year, or a period of 12 consecutive months beginning from an anniversary of the opening of an account, as the insurer may elect.

(18-1) “Prima facie loss ratio” means the ratio of incurred claims to earned premiums at prima facie during a specified period.

(18-2) “Prima facie premium rates” means maximum applicable premium rates as authorized and promulgated by the Commissioner from time to time in accordance with and listed in Regulations .10—.12 and .14—.16 of this chapter.

(19) “Single premium insurance” means insurance in which the debtor pays or finances the entire required premium in advance. If the creditor adds identifiable insurance charges or premiums for credit insurance to the indebtedness and a direct or indirect finance, carrying, credit, or service charge is made to the debtor on the insurance charges or premiums, the insurance shall be considered single premium.

(20) “Total-of-payments method” means decreasing term insurance sold to cover the entire schedule of payments under a loan, subject to policy limitations.

Cross References

31.13.01.20A(1)

31.13.01.21A

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.05 Loss Ratio.

Benefits for policies issued under these regulations shall be deemed reasonable in relation to premiums if claims incurred under the policies result in, or may reasonably be expected to result in, a loss ratio of not less than 55 percent when premiums do not exceed prima facie premium rates. When the prima facie loss ratio exceeds 55 percent, the premiums shall be determined in accordance with the methods of Regulation .18 of this chapter.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.06 Statistics and Reporting Forms.

A. Filing with Commissioner.

(1) To permit the Commissioner to review the basis of prima facie premium rates and the basis of premium rates being charged on the case method, each insurer writing credit life or credit health insurance shall:

(a) Maintain statistics relating to the insurer's Maryland business; and

(b) File the statistics with the Commissioner in the form required by the Commissioner.

(2) An insurer shall file the statistics for each:

(a) Account that has qualified as a case for the 2 most recent policy years, not later than 120 days after the end of the second calendar year to which the statistics relate; and

(b) New case and for all other business, not later than June 30 following the close of the calendar year to which the statistics relate.

(3) Each insurer writing credit life or credit health insurance also shall file with the Commissioner:

(a) Notice of each account that is a new case;

(b) The identity of the creditor for each new case, including:

(i) The corporate name of the creditor,

(ii) Any “trading as” name used by the creditor,

(iii) The address and phone number of the creditor, and

(iv) The name of a contact person for insurance matters at the creditor; and

(c) The statistics for the most recent calendar year, certified by a responsible officer of the insurer, that would have been required under this regulation if the new case had been a case for each of the 2 most recent policy years.

(4) An insurer shall file the information on a new case with the Commissioner not later than the June 30 following the close of the calendar year in which the account became a new case.

(5) Use of Code Numbers.

(a) In filing the information required by this section, an insurar may use a code number instead of the name and address of a creditor.

(b) If an insurer uses a code number instead of the name and address of a creditor, the insurer shall submit a separate list that identifies the name and address of each creditor with the creditor's code number.

(c) The list that identifies the name and address of each creditor with the creditor's code number is confidential commercial information under State Government Article, §10-617(d), Annotated Code of Maryland.

B. Reports for business other than on a case method shall be submitted under these regulations on a calendar year basis for the calendar year 1980 and every year after that. Reports for business for the calendar year 1979 shall be submitted in accordance with the corresponding regulations in effect on December 31, 1979.

C. All reports, both those on a calendar year basis and those on the case method, shall be submitted separately for each class of business of credit life insurance and for each class of business of credit health insurance written, and shall be submitted separately for each premium payment method (single premium decreasing total-of-payments, single premium decreasing net payoff balance, single premium level, monthly outstanding balance), and shall be submitted separately for each pattern of benefits (for example, 7-day retro, 14-day retro), and shall be submitted separately for single life and joint life credit life insurance, and shall be submitted separately for single health and for joint health credit health insurance.

D. Every report filed with the Commissioner shall contain the following information:

(1) Gross premiums written;

(2) Refunds of premiums on terminated insurance;

(3) Net premiums written;

(4) Unearned premium reserve at beginning of period;

(5) Unearned premium reserve at end of period;

(6) Earned premiums (1-2) minus (5-4);

(7) Earned premiums at prima facie;

(8) Claims paid;

(9) Claim reserve at beginning of period;

(10) Claim reserve at end of period;

(11) Claims incurred (7) plus (9-8);

(12) Loss ratio (10) divided by (6);

(13) Prima facie loss ratio (rounded to two decimal places);

(14) Dividends and experience rating refunds;

(15) All other commissions, compensation, and remuneration to creditors or agents;

(16) Total of items (12) and (13);

(17) Ratio (14) divided by (3);

(18) Combined ratio, sum of (11) and (15);

(19) Year-end amount of insurance in force;

(20) Year-end number of individual policies and certificates in force; and

(21) Minimum and maximum rates charged.

E. Every statistical report shall be certified by a responsible officer of the insurer and shall be accompanied by a statement certified by the president or other responsible officer of the insurer that the insurer has not paid or credited or provided commission as defined in these regulations in excess of the applicable maximum amounts specified in Regulation .20 of this chapter.

Cross References

31.13.01.29B(1)(a)

31.13.01.29B(5)(b)(ii)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.07 Rate Changes and Creditor-Paid Insurance.

A. Premium rates under a group policy of credit life or credit health insurance may not be increased more than once during the first policy year, and a subsequent increased rate may not be charged within 12 months of any prior change in rates.

B. In a policy of outstanding balance insurance, a change in rates may not be made effective until 31 days after all existing debtors in the group have been notified of any increased charge that they will be required to pay as a result of the change in rates. If the insurer is unable to identify the existing debtors, notice required by this section shall be deemed to be satisfied if the insurer notifies the creditor and provides necessary forms to be mailed by the creditor to the debtors advising them of the increased charge.

C. An insurer may file for approval of policy forms and premium rates for creditor-paid insurance on a basis other than that established by these regulations upon a showing satisfactory to the Commissioner that the forms and rates meet the requirements of Insurance Article, Title 13, Subtitle 1, Annotated Code of Maryland, and that the rates are actuarially consistent with rates prescribed by these regulations for other forms of credit life and credit health insurance.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.08 Premium Rates by Case Method.

A. Vacant.

B. Vacant.

C. Case Comprised of Two or More Accounts.

(1) If an insurer has combined two or more accounts to establish a case, it may not add additional accounts or remove accounts from that case except with the permission of the Commissioner and under conditions which the Commissioner may specify.

(2) When submitting an experience report for a case comprised of two or more accounts, the insurer shall include a list of the names of each account included in the case.

D. Premium rates for each case shall be established by the insurer to afford a loss ratio of at least 55 percent if the resulting rates do not exceed prima facie premium rates, and may be established in accordance with the methods of Regulation .18 of this chapter if the substitution of prima facie premium rates would result in a loss ratio in excess of 55 percent.

E. If an insurer acquires an existing account for which rates were established by another insurer by the case method, the new insurer shall use the same rates or rates not greater than those which were approved for use by the former insurer until the end of the existing experience period established by the former insurer. In reporting this account at the end of the experience period, the new insurer shall combine the experience of the former insurer with its own experience for the term of the experience period in order to determine subsequent rates for the account.

F. Reports for each case shall be submitted by the insurer at the end of each experience period, together with a statement of the then applicable premium rates proposed by the insurer. If the premium rates proposed by the insurer for the case do not meet the loss ratio standards of §D of this regulation, the insurer shall make an appropriate premium reduction, to be effective on or before 45 days after the date of filing of the experience report, unless, for good cause shown, the Commissioner approves a higher premium rate. If the insurer does not propose to reduce premium rates in accordance with these regulations, the Commissioner shall notify the insurer and afford it a hearing. The Commissioner shall notify the insurer in writing within 60 days of the filing of the experience report of the Commissioner's findings in regard to the premium rate which the Commissioner determines should be charged. The insurer shall implement the rates determined by the Commissioner not later than 45 days after receipt of the Commissioner's notice of the rates which the Commissioner authorizes for the case.

G. Credit Health Insurance — Case Experience and Application of Rate Adjustment Factor.

(1) If a plan of benefits for credit health insurance qualifies as a case, whether consisting of accounts of one or more creditors, the case experience submitted by the insurer at the end of the experience period shall include the experience of all plans of benefits for credit health insurance written by creditors comprising the case.

(2) If the experience of the case results in a downward rate adjustment, the insurer shall apply the rate adjustment factor to all plans of benefits for credit health insurance written by the creditors comprising the case.

(3) If the experience of the case results in an upward rate adjustment, the insurer may apply the rate adjustment factor to all plans of benefits for credit health insurance written by the creditors comprising the case.

Cross References

31.13.01.10D

31.13.01.29B(4)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.09 General Premium Rate Standards and Increased Rates.

A. With respect to all premium rates not eligible for filing in accordance with the case method, the Commissioner will accept as meeting the standards of Insurance Article, §13-110(b)(1) and (2), Annotated Code of Maryland, those premium rate filings which do not exceed prima facie premium rates stated in Regulations .10—.11 and .14—.15 of this chapter for the several categories of insurance described in those regulations. The prima facie premium rates in those regulations are based on the assumption that a policy fee, policy issue fee, certificate fee, or other additional charge will not be made.

B. Premium rates for use with forms which have more restrictive provisions than those described in Regulation .13 or .17 of this chapter, whichever is applicable, shall reflect those restrictions in a reduction in rates commensurate with the differences in claim costs which can reasonably be anticipated by reason of the restrictions. Filings in connection with a policy containing those restrictions shall be accompanied by credible statistics applicable to the policy form and shall require an application for specific approval as in the case of a filing made for increased rates.

C. Unless specific reference is made in these regulations to joint life insurance, all prima facie premium rates and standards and formulas for increased rates refer to individual policies and group certificates insuring single lives.

D. With respect to premium rates not eligible for filing in accordance with the case method, an insurer may file with the Commissioner an application for approval of rates higher than the prima facie premium rates for a single creditor or for one or more classes of business. The application shall specify the basis for the increased rate requested and shall be accompanied by credible statistics applicable to the business under consideration and by a demonstration that the requested rates are in conformity with, or less than, rates which would meet the guidelines for increased rates set forth in Regulation .18 of this chapter.

E. The Commissioner may grant approval of an increased rate for a stated period, or for an indefinite period until revoked by him on 90 days' notice. If a period is not specified in the Commissioner's notice of approval, an approval by the Commissioner of an increased rate shall be effective for a period of 1 year.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.10 Prima Facie Premium Rates for Credit Life Insurance.

A. Except as specified in Regulation .11 of this chapter, the premiums charged for credit life insurance policies having all policy provisions not less favorable to the insured debtor than those permitted by Regulation .13 of this chapter, may not exceed the following:

(1) For single premium decreasing term policies insuring one life, issued on the total-of-payments method, $0.43 per annum per $100 of initial amount of insured indebtedness;

(2) For outstanding balance term policies insuring one life, $0.66 per month per $1,000 of the amount of insured outstanding indebtedness; or

(3) For single premium level term policies insuring one life, $0.71 per annum per $100 of the amount of insured indebtedness.

B. For a credit life insurance policy or certificate of insurance issued to cover a husband and wife jointly, the face amount of the policy or certificate form being payable upon the death of the first to die during the term of the coverage, the premium for the life insurance benefits may not exceed 1.80 times the premium which would be charged if one debtor was insured under a comparable single life policy or certificate of insurance. To determine a unit rate for joint lives, the insurer may use the unit rates specified in these regulations for single lives, with the product of the single life unit rate times 1.80 being rounded to the nearest cent.

C. For all other types of credit life insurance policies and premium rating methods, the premium shall be subject to approval by the Commissioner and may not exceed rates which are actuarially consistent with those specified in this chapter.

D. Rounding Rate Calculations. Single premium credit life insurance rates that are determined by interpolation of the rates stated in this regulation or required to be reduced in accordance with Regulation .08 of this chapter shall be rounded to two decimal places.

E. The prima facie premium rates for credit life insurance in this regulation apply to all premiums charged on or after March 1, 2001, for every class of business.

Cross References

31.13.01.04B(18-2)

31.13.01.09A

31.13.01.11A(2)

31.13.01.13B

31.13.01.13C

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.11 Prima Facie Premium Rates — Credit Life Insurance — Net Payoff Balance Method.

A. The premium charged for credit life insurance policies issued under the net payoff balance method and having all policy provisions not less favorable to the insured debtor than those permitted by Regulation .13 of this chapter, may not exceed the following:

(1) For single premium decreasing term policies insuring one life, a premium based on $0.66 per $1,000 of the sum of the scheduled insured outstanding principal indebtedness each month over the term of insurance coverage; or

(2) For joint life policies, the premium determined in accordance with Regulation .10D of this chapter.

B. The prima facie premium rates for credit life insurance in this regulation apply to all premiums charged on or after March 1, 2001 for every class of business.

Cross References

31.13.01.09A

31.13.01.10A

31.13.01.13B

31.13.01.13C

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.12 Repealed.

Cross References

31.13.01.04B(18-2)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.13 Underwriting Requirements for Credit Life Prima Facie Premium Rates.

A. The prima facie premium rates used in Regulations 10—.11 of this chapter assume that contracts providing credit life insurance do not require evidence of individual insurability from any eligible debtor electing to purchase coverage within 30 days of the date the debtor becomes eligible.

B. If an insurer requires evidence of insurability from debtors electing to purchase coverage within 30 days of the date they become eligible and the initial amount of credit life insurance or the insurable maximum revolving credit account limit of an insured debtor does not exceed $15,000, the insurer shall reduce the premium rates stated in Regulations .10—.11 of this chapter by 10 percent on all:

(1) Individual policies of credit life insurance issued through the same creditor, regardless of whether the initial amount of credit life insurance or the insurable maximum revolving credit account limit exceeds $15,000; or

(2) Certificates of credit life insurance issued under the group policy through the same credit or creditor, regardless of whether the initial amount of credit life insurance or the insurable maximum revolving credit account limit exceeds $15,000.

C. Subject to the conditions and requirements of Regulations .08, .09, and .18 of this chapter, the maximum premium rates shall be the rates stated in Regulations .10—.11 of this chapter if the:

(1) Insurer requires evidence of insurability only from debtors whose initial amount of insurance or insurable maximum revolving credit account limit exceeds $15,000; or

(2) Debtor elects to purchase coverage more than 30 days after the date the debtor became eligible.

D. For individual policies or for certificates of insurance issued under group policies insuring open lines of credit, the insurer may require evidences of insurability for:

(1) Advances which increase the outstanding indebtedness over $15,000; or

(2) Increases in the insured debtor's insurable maximum revolving credit account limit that increase the limit over $15,000.

E. Underwriting Limitations.

(1) Regardless of policy or certificate amounts, the underwriting limitations specified in this section apply.

(2) The policy contains no provision which excludes or restricts liability for death caused in a certain specific manner or occurring while the insured has a specified status, except that the policy may exclude death resulting from suicide within 6 months after the effective date of coverage.

(3) There are no age restrictions, or the only age restrictions are those which comply with this regulation and the insured acknowledges on the application that he is aware of the age restriction.

(4) The insurer, at its option, may adopt any one of the following provisions with regard to age limitations:

(a) The policy may provide that the insurer may terminate the insurance within 60 days after the effective date and refund all premiums paid by the debtor if the debtor's true age is greater than the limiting age stated in the policy. The notice of termination shall state that the premium paid by the debtor shall be refunded to the person entitled to it. Under this provision, an insurer using this method shall pay the claim in full if the insurer does not terminate the coverage within 60 days or if the debtor dies within the 60-day period but before notification by the insurer of termination.

(b) The policy may provide that debtors who have reached age 65 on the effective date of the insurance are not eligible for insurance. However, if an individual policy or a certificate of insurance issued under a group policy is issued beyond the age limits established in the policy due to misstatement of age of the debtor, §E(4)(d) of this regulation shall apply. On policies issued on the outstanding balance insurance basis, the policy may exclude from the classes eligible for insurance, debtors who have reached age 65, and provide for the termination of insurance or reduction in the amount of insurance upon the debtor's attaining a stated age not less than 65. If premium charges continue to be made beyond the stated age due to misstatement of age of the debtor, §E(4)(d) of this regulation applies. If premium charges continue to be made beyond the stated age even though the correct age of the debtor is known to the insurer or to the creditor, the insurer shall pay in full any claim for loss occurring during any period for which a premium has been charged.

(c) The policy may provide that debtors who will have reached age 69 on the scheduled maturity date of the indebtedness or, at the option of the insurer, on the expiration date of the insurance, are not eligible for insurance. However if an individual policy or a certificate of insurance issued under a group policy is issued beyond the age limits established in the policy due to misstatement of age of the debtor, §E(4)(d) of this regulation applies.

(d) In the case of a single premium policy issued in accordance with §E(4)(b) or (c) of this regulation and in the case of an outstanding balance policy issued in accordance with §E(4)(b) of this regulation, the policy shall contain a provision that if the debtor misstates the debtor's age, the benefit shall be such as the premium paid would have purchased at the correct age. For purposes of administering this requirement, the reduction in benefits for persons over the limiting age stated in the policy where the limiting age is age 65 on the effective date of the insurance shall be not less favorable to the insured debtor than a benefit provided in accordance with the following table:

| If age has been misstated and correct age on effective date was | Coverage to be afforded is | | --- | --- | | 65 or under | 100 percent | | 66—70 | 80 percent | | 71—75 | 60 percent | | 76—80 | 40 percent | | 81—85 | 30 percent | | 86 and over | 20 percent |

When the limiting age stated in the policy is other than age 65 the effective date of the insurance or when the limiting age is stated on a basis of the insured attaining a particular age on the scheduled maturity date of the indebtedness, or, at the option of the insurer, on the expiration date of the insurance, the insurer shall file with the Commissioner an appropriate table similar to the one above for reduction in benefits in the event of misstatement of age.

(5) In the case of a policy providing joint life coverage:

(a) If the first death to occur during the term of insurance is that of an insured debtor whose age has been correctly stated, there may not be a reduction in the amount otherwise payable under the policy;

(b) If the first death to occur during the term of insurance is that of an insured debtor whose age has been incorrectly stated, adjustment may be made in accordance with the procedure stated in this regulation.

(6) When the age of the debtor has been misstated and the debtor's true age on the effective date of the insurance is beyond the limiting age or if premium charges continue to be made beyond the termination age in the case of outstanding balance insurance due to misstatement of age of the debtor, instead of the adjustments for payment of benefits provided in §E(4) of this regulation, the insurer, at its option, may void the insurance within 2 years from the effective date (or at any time after that date if the debtor dies within the 2-year period) and refund the premium paid if at the time of the debtor's application the insurer has obtained a separate statement signed by the debtor that the debtor is aware that no insurance will be provided beyond the stated limiting age. This separate statement shall be printed in 18-point boldface capital letters. A copy of the statement shall be given to the applicant at the time of the application and the original shall be kept on file by the insurer until at least 1 year beyond the date the indebtedness is satisfied in the case of single premium insurance, or until at least 1 year beyond the date that the debtor's insurance is cancelled in the case of outstanding balance insurance.

Cross References

31.13.01.10A

31.13.01.11A

31.13.01.14A

31.13.01.14B

31.13.01.28B(1)(b)(i)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.14 Disability Benefit Provisions.

A. If a credit life insurance policy, otherwise meeting the requirements of Regulation .13 of this chapter provides for payment of the policy proceeds in the event of the loss of two limbs or in the event of the complete loss of eyesight, the insurer may charge a rate not to exceed 1 percent more than the rates in Regulation .10 or .11 of this chapter, whichever is applicable. If the policy provides for payment of the policy proceeds in event of loss of a single limb or in event of the loss of the sight of one eye, the insurer may charge a rate not to exceed 3 percent more than the rates in Regulation .10 or .11 of this chapter, whichever is applicable.

B. If a credit life insurance policy otherwise meeting the requirements of Regulation .13 of this chapter provides for payment of the policy proceeds in event of total and permanent disability, other than the benefit described in §A of this regulation, the Commissioner shall determine an appropriate increase in the premium rates on application of the insurer.

Cross References

31.13.01.22G(1)

31.13.01.25B

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.15 Prima Facie Premium Rates for Credit Health Insurance.

A. The premiums charged for credit health insurance policies having all policy provisions not less favorable to the insured debtor than those required by Regulation .17 of this chapter may not exceed, on policies of credit health insurance for which a single premium is charged in advance for the entire duration of the insurance and the indebtedness is repayable in equal installments, the amount shown in the table below for each $100 of the initial amount of insured indebtedness:

| Number of Months in Which the Indeptedness Is Insured | Prima Facie Single Premium Rate Per $100 of Initial Amount of Insured Indebtedness | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | Benefits Not Retroactive Elimination Period | Retroactive Benefits Waiting Period | | | | | | | 7 days | 14 days | 30 days | 7 days | 14 days | 30 days | | 2 | $0.50 | — | — | $0.92 | — | — | | 3 | 0.71 | $0.43 | $0.21 | 1.28 | $0.92 | $0.64 | | 6 | 1.06 | 0.71 | 0.28 | 1.77 | 1.28 | 0.92 | | 12 | 1.42 | 0.99 | 0.57 | 2.13 | 1.56 | 1.21 | | 18 | 1.77 | 1.28 | 0.85 | 2.48 | 1.84 | 1.49 | | 24 | 2.13 | 1.56 | 1.13 | 2.84 | 2.13 | 1.77 | | 30 | 2.48 | 1.84 | 1.42 | 3.19 | 2.41 | 2.06 | | 36 | 2.84 | 2.13 | 1.70 | 3.55 | 2.69 | 2.34 | | 42 | 3.12 | 2.34 | 1.91 | 3.83 | 2.91 | 2.55 | | 48 | 3.33 | 2.48 | 2.06 | 4.04 | 3.05 | 2.69 | | 54 | 3.55 | 2.62 | 2.20 | 4.25 | 3.19 | 2.84 | | 60 | 3.76 | 2.77 | 2.34 | 4.47 | 3.33 | 2.98 | | 66 | 3.97 | 2.91 | 2.48 | 4.68 | 3.47 | 3.12 | | 72 | 4.11 | 2.98 | 2.55 | 4.82 | 3.55 | 3.19 | | 78 | 4.25 | 3.05 | 2.62 | 4.96 | 3.62 | 3.26 | | 84 | 4.40 | 3.12 | 2.69 | 5.11 | 3.69 | 3.33 | | 90 | 4.54 | 3.19 | 2.77 | 5.25 | 3.76 | 3.40 | | 96 | 4.68 | 3.24 | 2.84 | 5.39 | 3.83 | 3.47 | | 102 | 4.82 | 3.33 | 2.91 | 5.53 | 3.90 | 3.54 | | 108 | 4.96 | 3.40 | 2.98 | 5.67 | 3.97 | 3.61 | | 114 | 5.10 | 3.47 | 3.06 | 5.81 | 4.04 | 3.68 | | 120 | 5.24 | 3.54 | 3.13 | 5.95 | 4.11 | 3.75 |

Prima facie premium rates for policies of credit health insurance under which the indebtedness is insured for periods other than those shown above but not in excess of 120 months, shall be determined by straight-line interpolation of the above rates with the results rounded to the nearest cent per $100 of initial amount of insured indebtedness. For purposes of this regulation, the term “initial amount of insured indebtedness” means the originally scheduled total of payments under the loan contract if the loan payments are covered in total, or means the proportionate amount of the originally scheduled total of payments if a pro rata portion of the indebtedness is covered.

B. On policies of credit health insurance with elimination or waiting periods of 7, 14, or 30 days, and with modes of premium payment other than single premium, the prima facie premium rates may not exceed rates which are actuarially consistent with those in §A of this regulation.

C. Other Types of Credit Health Insurance.

(1) With respect to critical period disability insurance and lump sum disability insurance, the premium rate charged by an insurer may not exceed a rate that is determined by adjusting the applicable prima facie premium rate set by §A of this regulation to an actuarially equivalent rate approved by the Commissioner.

(2) For all other types of credit health insurance, the prima facie premium rates shall be subject to approval by the Commissioner and may not exceed rates which are actuarially consistent with those specified in §§A and B of this regulation.

D. Credit health insurance premiums for elimination or waiting periods of 7, 14, or 30 days may not be approved for policy terms less than the shortest term for which a premium rate is shown under the respective columns in §A of this regulation.

E. On policies of group credit health insurance issued on the outstanding balance, a composite monthly outstanding balance premium rate shall be used instead of the rates referred to in §C of this regulation. The rates under this plan may not exceed those shown in the schedule immediately below, with the rates being based on the amount of insured indebtedness currently being repaid. The composite rate shall be applied to all outstanding balances under the plan each month irrespective of the duration of the loans. Application for a higher rate under this type of plan may be made upon a showing of need for an increased rate on a basis actuarially consistent with Regulation .18D of this regulation.

14 Day Nonretroactive --- $0.08

30 Day Nonretroactive ---- 0.07

14 Day Retroactive ------- 0.11

30 Day Retroactive ------- 0.09

F. Joint Credit Health Insurance.

(1) For credit health insurance issued to cover two debtors jointly, the monthly benefit payable upon the total disability of the first to be totally disabled during the term of the coverage, the premium for the health insurance benefits may not exceed 1.80 times the premium that would be charged if one debtor alone were insured.

(2) To determine a unit rate for joint health coverage, the insurer may use the unit rates specified in this chapter for single health coverage, with the product of the single unit rate times 1.80 being rounded to the nearest cent.

G. The prima facie premium rates for credit health insurance in this regulation apply to all premiums charged on or after March 1, 2001, for every class of business.

Cross References

31.13.01.17A

31.13.01.17B

31.13.01.17C

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.16 Repealed.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.17 Underwriting Requirements for Credit Health Prima Facie Premium Rates.

A. The prima facie premium rates in Regulation .15 of this chapter assume that contracts providing credit health insurance do not require evidence of individual insurability from any eligible debtor electing to purchase coverage within 30 days of the date the debtor becomes eligible.

B. If an insurer requires evidence of insurability from debtors electing to purchase coverage within 30 days of the date they become eligible and the total amount of insured periodic indemnity payable in event of disability of the debtor or the insurable maximum revolving credit account limit of an insured debtor does not exceed $15,000, the insurer shall reduce the premium rates stated in Regulation .15 of this chapter by 10 percent on all:

(1) Individual policies of credit health insurance issued through the same creditor; or

(2) Certificates of credit health insurance issued under the group policy through the same creditor.

C. Subject to the conditions and requirements of Regulations .08, .09, and .18 of this chapter, the maximum premium rates shall be the rates stated in Regulation .15 of this chapter if:

(1) The insurer requires evidence of insurability only from debtors whose total amount of insured periodic indemnity payable in the event of disability or insurable maximum revolving credit account limit exceeds $15,000; or

(2) The debtor elects to purchase coverage more than 30 days after the date the debtor became eligible:

D. For policies insuring open lines of credit, the insurer may require evidence of insurability for advances or for increases in the insured debtor's maximum revolving credit account limit which increase the insurable outstanding indebtedness or the debtor's insurable maximum revolving credit account limit over $15,000.

E. Regardless of individual policy or certificate amounts, the following underwriting assumptions apply:

(1) The policy contains no exclusions for preexisting conditions except conditions which, within 6 months before the effective date of the coverage, manifested themselves to the insured debtor by requiring medical consultation, diagnosis, or treatment, provided the preexisting conditions cause loss commencing within 6 months following the effective date of the coverage, and provided further that the preexisting conditions would ordinarily be expected to affect materially the health of the debtor during that period. Loss due to total disability shall include loss of time from work, and, in the case of persons not employed, the inability of the insured to engage in the insured's usual and customary activities. In the case of disability by reason of loss of time from work, total disability for which benefits may become due and payable shall be defined as “inability by reason of injury or sickness to substantially perform the duties pertaining to the insured's occupation” for at least the first 12 months for which a claim may be made, and after that may be defined as “inability to substantially perform the duties of any business or occupation for which the insured is reasonably fitted by education, training, and experience.” Disability commencing 6 months or more after the effective date of the coverage may not be excluded regardless of whether the disability results from any preexisting condition. The policy shall provide that if the indebtedness covered by the policy results from the refinancing in whole or in part of a prior debt with the same creditor, the period of exclusion for preexisting conditions shall be reduced by the period that creditor-debtor disability coverage was in force in connection with the prior indebtedness. However, if the resulting period of exclusion for preexisting conditions is less than the period that would normally be applicable, and if, as a result, a claim for disability benefits which would not otherwise be allowed is payable, the benefits for the claim need not be greater than those which would have been paid under the prior coverage if it had not terminated.

(2) The policy contains no other exclusions except for disability resulting from pregnancy.

(3) There are no age restrictions, or, at the option of the insurer, the only age restrictions are those which make ineligible for coverage debtors who have reached age 65 at the time the indebtedness is incurred, or, alternately, debtors who will have reached age 69 on the scheduled maturity date of the indebtedness. On policies issued on the outstanding balance insurance basis in connection with open-end or revolving credit transactions, the policy may exclude from the classes eligible for insurance, debtors who have reached age 65, and provide for the termination of insurance or reduction in the amount of insurance upon the debtor's attaining a stated age not less than 65.

(4) Except as provided in this chapter, the policy contains no provision which excludes or restricts liability for disability caused in a certain specific manner or occurring while the insured debtor has a specified status.

(5) If an insurer acquires an existing account providing disability benefits on an outstanding balance basis or on another basis for which the debtor is charged monthly, the new insurer shall honor all claims for periods of disability commencing on or after the date of takeover and all claims after that which would have been paid under the former policy. The original insurer shall honor all claims for periods of disability commencing before the date of takeover.

Cross References

31.13.01.15A

31.13.01.28B(1)(b)(ii)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.18 Guidelines for Increased Rates.

A. Applications to the Commissioner for higher than prima facie premium rates shall be accompanied by credible statistics. Approval of applications for increased rates will depend on whether the requested rates are not greater than rates based on the standards in this regulation.

B. Decreasing Term Credit Life Insurance. On policies of decreasing term credit life insurance for which a single premium is charged in advance providing coverage for the outstanding amount of insured indebtedness in connection with a loan repayable in 12 equal monthly installments, when the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - .55) × 1.41 + 1) × Prima Facie Rate. For terms other than 12 months under single premium decreasing term credit life policies, and for other modes of premium payment under decreasing term credit life insurance, this formula shall be the basis of determining actuarially consistent rates.

C. Level Term Credit Life Insurance. On policies of level term credit life insurance for which a single premium is charged in advance providing a level amount of life insurance coverage for 12 months, when the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate. For terms other than 12 months under single premium level term credit life policies and for other modes of premium payment under level term credit life insurance, this formula shall be the basis of determining actuarially consistent rates.

D. Outstanding Balance Credit Life Insurance. On policies of outstanding balance credit life insurance for which an insurance premium is charged each month based on the insured loan amount then outstanding, where the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate.

E. Credit Health Insurance. On policies of credit health insurance for which the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula: ((Prima Facie Loss Ratio - 0.55) × 1.41 + 1) × Prima Facie Rate.

F. Rounding Rate Calculations. Premium rates for credit life insurance or credit health insurance determined under this regulation shall be rounded to:

(1) Two decimal places per hundred dollars of initial amount of single premium insurance; and

(2) Three decimal places per thousand dollars of monthly outstanding balance insurance.

Cross References

31.13.01.05

31.13.01.08D

31.13.01.09D

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.19 Refunds.

A. In event of termination of the insurance before the scheduled maturity date of the indebtedness, other than by performance of the insurance contract, the insurer shall promptly refund or credit to the person entitled to it the appropriate portion of any premiums paid for the insurance.

B. In the case of decreasing term credit life insurance or of credit health insurance on which premiums are charged to the debtor other than as a single premium payable in advance, or in the case of level term credit life insurance, the amount of the refund or credit shall be not less than the pro rata gross unearned premium.

C. In the case of decreasing credit life insurance on which premiums are charged to the debtor in a single sum payable in advance, the amount of the refund or credit shall be not less than the amount computed by the “sum of the digits” method commonly known as the Rule of 78.

D. In the case of credit health insurance on which premiums are charged to the debtor in a single sum payable in advance, the amount of the refund or credit shall be not less than the amount computed by the “sum of the digits” method, commonly known as the Rule of 78.

E. At the option of the insurer, refunds under §§C and D of this regulation may be calculated on a daily or on a monthly basis, as may be elected in the filing made by the insurer. Refunds may be calculated on an approximate daily basis by interpolating pro rata between the values at the beginning and at the end of the month. For this purpose, the insurer shall assume that every month has 30 days. If refunds are calculated on a monthly basis, a charge may not be made for a period less than 15 days elapsing since the last monthly installment due date, but if the period is 15 days or more, a charge may be made for the full month.

F. A premium refund need not be made under §A of this regulation if the sum of the refunds on all insurance issued to the debtor by an insurer in connection with the loan would be less than $1.

G. If a refund or credit is due the debtor in accordance with Insurance Article, §13-107(b), Annotated Code of Maryland, or in accordance with Insurance Article, §13-112(b), Annotated Code of Maryland, the amount of refund or credit shall be not less than the amount paid by the debtor less the amount payable under any substituted or delayed coverage issued to the debtor.

H. In the event of the death of a debtor who is covered for both credit life and credit health insurance, the credit health insurance may not be deemed to have terminated by the performance of the insurance contract by reason of the debtor's death. In this case, the insurer shall make the appropriate refund for the health insurance coverage which terminated at the date of death.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.20 Commission to Agents and Creditors.

A. Maximum Commission.

(1) On all loans originating in Maryland, an insurer may not directly or indirectly pay, allow, or offer to pay any form of commission, as defined in Regulation .04B(6) of this chapter, in excess of the limits stated in these regulations on a form of credit life or credit health insurance regardless of whether the payment is made to a licensed agent, a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor or the licensed insurance agent.

(2) The maximum commission payable to all payees on each policy of credit life or credit health insurance may not exceed a total of 36 percent of prima facie premium rates.

(3) Commission paid to a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor, regardless of whether the payee is a licensed agent, may not exceed 32 percent of prima facie premium rates.

(4) Payment as described in §A(3) of this regulation will not preclude payment of commission to a licensed agent not listed in §A(3) of this regulation, provided the total commission paid under §A(3) of this regulation and under this subsection does not exceed the maximum rate stated in §A(2) of this regulation.

(5) A licensed agent proposing to pay commission to any payee listed in §A(3) of this regulation shall first inquire of the insurer whether any commission is being paid by the insurer to that payee on the same business. The agent may not pay that payee an amount which, when added to the amount paid by the insurer for the same business, would cause the payment to exceed the maximum rate stated in §A(3) of this regulation. The insurer shall cooperate with the agent in providing the information called for by this subsection.

B. Excluded from Commission. The following will not be deemed commission to an agent or creditor:

(1) The cost to the insurer of conducting a review performed in accordance with Regulation .26 of this chapter.

(2) Services performed by account executives or liaison personnel of the insurer who visit the offices of the creditor at occasional intervals and who are regular salaried officers or employees of the insurer and who receive no commission or other compensation directly dependent upon the amount of business obtained.

Cross References

31.13.01.06E

31.13.01.21A

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.21 Reinsurance Treaties.

A. To permit the Commissioner to enforce the provisions of Regulation .20 of this chapter with respect to that portion of commission defined by Regulation .04B(6)(n) of this chapter and to permit the Commissioner to ascertain that there are no violations of Insurance Article, Title 27, Annotated Code of Maryland, and other applicable sections of Insurance Article, Annotated Code of Maryland, a contract of reinsurance of credit life or credit health insurance on loans originating in Maryland may not be entered into, or continued, after the effective date of these regulations unless approved by the Commissioner and unless the reinsurer is licensed in Maryland, or qualifies under Insurance Article, §13-116, Annotated Code of Maryland, or is an accredited reinsurer.

B. A person proposing to enter into a reinsurance treaty as described in this regulation or a person proposing to continue a treaty entered into before the effective date of this chapter shall submit the treaty to the Commissioner for his approval.

Agency Note: The Commissioner will accept submission of existing of proposed reinsurance treaties for review before the effective date of these regulations.

C. If the Commissioner does not approve or disapprove the proposed or existing reinsurance treaty within 90 days after the date it is filed with him, the treaty shall be deemed to be approved.

D. The Commissioner may withdraw approval of a reinsurance treaty after a hearing held not less than 20 days after written notice to the insurer and the reinsurer.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.22 Prohibited Transactions.

A. A person may not solicit or sell a group or individual policy of credit life or credit health insurance unless the person is then licensed as an agent in accordance with Insurance Article, Title 10, Subtitle 1, Annotated Code of Maryland. A person possessing a restricted license in accordance with Insurance Article, §10-105(e)(2)(i), Annotated Code of Maryland, shall be deemed appropriately licensed for this purpose.

B. Enroller.

(1) An enroller may not receive any form of commission, compensation, remuneration, or other benefit based on the enrollee's activity in enrolling persons in group policies of credit life or credit health insurance.

(2) An enroller who is not also licensed as an agent may not engage in solicitation or selling or assist in solicitation or selling of an individual policy of credit life or credit health insurance.

C. Joint life credit insurance may not be issued on a consumer loan for an amount of less than $700.

D. Repealed.

E. Level term credit life insurance may not be written for a term exceeding 18 months unless written in combination with decreasing term credit life insurance in connection with a balloon loan.

F. Level term credit life insurance may not be written under group policies on loans repayable in installments unless:

(1) Written in combination with decreasing term credit life insurance in connection with balloon loans; and

(2) Limited to the balloon payment portion of balloon loans.

G. Disability Benefits.

(1) If credit health insurance is provided, disability benefits of the types stated in Regulation .14 of this chapter may not be issued to insure the same loan.

(2) This section does not prohibit the disability benefits coverage from being included in a policy or certificate of insurance covering a loan that is insured for credit health coverage as long as both coverages are not in force at the same time.

H. An insurer or agent may not engage in any of the following practices in connection with the solicitation or sale of credit life or credit health insurance as an inducement to the sale of the insurance, and each of these practices shall be considered an unfair trade practice in accordance with Insurance Article, Title 27, Annotated Code of Maryland:

(1) The offer or grant by an insurer or by any insurance agent to a creditor or to any person connected or affiliated with the creditor of any special advantage or any service not specified in the insurance contract.

(2) Agreement by an insurer or by an insurance agent to deposit with a bank or financial institution money or securities of the insurer or the agent with the design or intent that the deposit shall reduce or take the place of a deposit of money or securities which otherwise would be required of the creditor or an affiliate of the creditor by the bank or financial institution as a compensating balance or offsetting deposit for a loan or other advance.

(3) Allowing the creditor to retain premiums on credit life and credit health insurance on policies issued to the creditor or on policies sold or collected by the creditor for more than 60 days beyond the due date of the premiums. Premiums shall be remitted to the insurer within 60 days of their due dates and for purposes of these regulations, the deposit of premiums to any demand deposit account with the creditor or affiliate and the continued retention of the premiums in the deposit account for more than 60 days may not be deemed remittance to the insurer.

(4) Deposit with the creditor or an affiliate of the creditor by an insurer or by an insurance agent of money or securities without interest or at a lesser rate of interest than is generally being paid by the creditor bank or financial institution to other depositors of like amounts. This subsection may not be construed to prohibit the maintenance by an insurer or agent of demand deposits or premium deposit accounts which are reasonably necessary for use in the ordinary course of the insurer's or the agent's business.

I. If the beneficiary or the estate of a debtor or any other person makes payments on the loan after the death of the debtor, the insurer may not reduce the amount of credit life insurance payable which would otherwise have been payable on the date of the debtor's death.

J. If advance loan payments are made before the date of total disability of the debtor on a loan covered by single premium credit health insurance, or if the debtor or the beneficiary or any other person makes payments on a loan after the date the debtor is first entitled to receive a benefit for disability, the insurer may not reduce the amount of payments which were scheduled to be paid under the provisions of the credit health insurance policy because of these loan payments.

K. Accidental Death Benefit Coverage.

(1) If credit life insurance is provided, accidental death benefit coverage may not be issued to insure the same loan.

(2) This section does not prohibit accidental death benefit coverage from being included in a policy or certificate of insurance covering a loan that is insured for credit life coverage as long as both coverages as not in force at the same time.

L. Credit life insurance sold on the net payoff basis may not be written for an amount in excess of the scheduled principal indebtedness.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.23 Combinations of Coverages.

A. In General.

(1) If an individual policy of credit life insurance or a certificate of group credit life insurance is used to provide more than one type of coverage, the policy or certificate shall include, for each type of coverage, a box that is:

(a) Prominently placed in the schedule of benefits; and

(b) Clearly and prominently labeled with the name of the type of coverage.

(2) Before an insurer issues an individual policy of credit life insurance or a certificate of group credit life insurance that is used to provide more than one type of coverage, the insurer shall check the appropriate box to indicate the type of coverage that is being provided.

B. Individual Credit Life and Credit Health. Credit life insurance and credit health insurance may not be combined in a single individual policy.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.24 Notice to Debtors.

A. If a debtor is covered by a group credit life or credit health insurance policy providing for payment of premiums to the insurer on a monthly outstanding balance basis, the policy shall provide that in the event of termination of the policy for any reason the insured debtor shall be given written notice of termination, and that coverage will continue for at least 31 days from the date of notice, except when replacement of the coverage by the same or another insurer in the same or greater amount takes place without interruption of coverage and a new certificate reflecting the replacement coverage is delivered to the insured debtor. The notice of termination required by this section shall be given by the insurer unless the insurer is unable to identify the debtors, in which case it shall be given by the creditor. There shall be a prominent notice printed or stamped close to the schedule of benefits in the certificate form that the insurance coverage will terminate if the group policy terminates. An insurer also may include notice of additional events that would lead to termination of insurance coverage.

B. If a credit life insurance policy is issued under which the benefit upon death may not completely extinguish the total principal indebtedness even if the loan account and the insurance premiums are paid on a current basis, or if a credit health insurance policy is so written that in event of disability the monthly benefit may not cover payment of the entire scheduled monthly loan installment or the total benefit may not cover payment of all of the unpaid scheduled installments under the loan, even if the loan account and the insurance premiums are paid on a current basis, then there shall be a notice to this effect in the individual policy or in certificates of insurance issued under a group policy. This notice shall be prominently printed or stamped close to the schedule of benefits in the policy and in the certificate form.

C. If a policy or certificate of credit life or credit health insurance contains any age limitations, there must be printed in, or close to, the schedule of benefits, language clearly calling attention to the limitation.

D. If a policy or certificate of credit life or credit health insurance insuring open lines of credit requires evidence of insurability for advances of credit, there shall be printed in, or close to, the schedule of benefits, language clearly calling attention to the evidence of insurability requirement.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.25 Benefits.

A. When a debtor has filed in accordance with the policy provisions a claim for benefits for which the insurer is liable under a credit health insurance policy, the insurer shall pay any late charges accruing on the amount payable under the claim after the date the claim has been filed.

B. The amount of the claim payable under a credit life insurance policy shall be determined as of the date of death of the debtor or in the case of benefits described in Regulation .14 of this chapter, as of the date of the loss.

C. For purposes of these regulations a claim shall be deemed to be filed if it is transmitted to the creditor, to the insurer, or to an agent of the insurer.

D. The benefit at death under a policy of net payoff credit life insurance shall include earned but unpaid interest to date of death and any past-due installments of principal and late charges.

E. An amount due under a credit life or credit health insurance policy in excess of the amount due to the creditor shall be paid by the insurer directly to the debtor, the designated second beneficiary, or the estate of the debtor, whichever is entitled to the payment. If the insurer does not have the address of the person entitled to the excess amount, the insurer shall send a check payable to that person to the creditor for transmittal.

F. Claims shall be paid either by a check of the insurer or by a draft drawn upon the insurer. The creditor may not be authorized to settle or adjust claims or to act as a claim representative for the insurer.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.26 Review of Credit Operations.

A. Every insurer transacting credit life or credit health insurance in Maryland shall conduct a review of each of its creditor accounts with respect to the credit life and credit health insurance business of the creditor to assure compliance with the insurance laws and regulations of Maryland. Unless a satisfactory review has been made within 2 years before the effective date of these regulations, the first review shall be made not later than 15 months after the effective date of these regulations or of the date of the initial credit life or credit health insurance transaction between the creditor and the insurer, whichever is later. After that, a review shall be made not later than 36 months following the last preceding review.

B. The review shall include but need not be limited to a determination that:

(1) The proper premium charges to debtors are made by the creditor and remitted in a timely manner to the insurer;

(2) The proper refunds are being accurately calculated and promptly made by the creditor;

(3) All claims are being filed promptly and properly handled;

(4) Amounts of insurance payable on death in excess of the amounts necessary to extinguish the indebtedness are properly calculated and reported to the insurer in proofs of loss;

(5) The creditor is promptly and fairly processing complaints concerning its credit insurance operations and is maintaining proper procedures for and records of the complaints processed.

C. Insurers shall retain copies of the reviews in their home offices for a period of at least 5 years.

Cross References

31.13.01.20B(1)

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.27 Effective Date.

This chapter shall take effect September 1, 1980. An individual policy or group policy or group certificate of credit life or credit health insurance not in conformity with this chapter may not be issued or continued to be used in connection with any loan made on or after the effective date of this chapter. A premium in excess of that permitted by these regulations may not be charged for credit life or credit health insurance, and a commission or other form of benefit may not be paid to agents or creditors, in excess of the premium and commission rates permitted under this chapter for credit life or credit health insurance which is issued in connection with any loan made on or after the effective date of this chapter.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.28 Clerical Errors.

A. Excess Insurance.

(1) If a policy of credit life or credit health insurance limits the life or health insurance benefits to stated policy maximums, the policy and certificates of insurance issued under a group policy shall provide that if the insured has been charged premiums for insurance in excess of the stated maximums the insurer may terminate the excess insurance and refund all premiums paid by the debtor for the excess insurance.

(2) The notice of termination of the excess insurance shall state that the premium paid by the debtor for the excess coverage shall be refunded to the person entitled to it.

(3) A single premium credit life or credit health insurance policy and certificate shall further provide that excess insurance shall remain in force if the insurer does not terminate the excess insurance within 60 days after the effective date of coverage or if the debtor suffers a covered loss within the 60-day period but before notification by the insurer of termination of the excess coverage.

(4) An outstanding balance credit life or credit health insurance policy and certificate shall further provide that the excess insurance shall be in force for the period for which a premium was charged unless the excess insurance is cancelled before the occurrence of a loss.

B. Ineligible Debtor.

(1) Misstatement of Age.

(a) The policy or certificate provisions required by this section do not apply to an ineligible debtor who has misstated the debtor's age.

(b) An ineligible debtor who has misstated the debtor's age is subject to:

(i) For credit life insurance, the policy or certificate provisions required by Regulation .13 of this chapter; or

(ii) For credit health insurance, the policy or certificate provisions required by Regulation .17 of this chapter.

(2) If a debtor's eligibility for credit life or credit health insurance is subject to restrictions based on health, employment, age, or other factors, the policy and certificates of insurance issued under a group policy shall provide that if insurance is issued to an ineligible debtor, including a debtor who has correctly stated the debtor's age as exceeding the stated maximum eligibility age, the insurer may terminate the insurance and refund all premiums paid by the debtor.

(3) The notice of termination of the insurance shall state that the premium paid by the debtor shall be refunded to the person entitled to it.

(4) A single premium credit life or credit health insurance policy and certificate shall further provide that the insurance shall remain in force if the insurer does not terminate the coverage within 60 days after the effective date of coverage or if the debtor suffers a covered loss within the 60-day period but before notification by the insurer of termination of the insurance.

(5) An outstanding balance credit life or credit health insurance policy and certificate shall provide that the insurance shall be in force for the period for which a premium was charged unless the insurance is cancelled with no less than 31 days notice before the occurrence of a loss.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

COMAR 31.13.01.29 Change of Insurers — Reporting Requirements — Coverage and Rates.

A. Insurers That Cease to Offer Credit Insurance. Within 90 days after an insurer ceases to offer credit insurance through a case, the insurer shall notify the Commissioner of:

(1) The name of the creditor;

(2) Each coverage no longer offered;

(3) he date on which the coverage ceased to be offered; and

(4) The current approved premium rate applicable to each coverage no longer offered.

B. Insurers That Begin to Offer Credit Insurance.

(1) At the end of a calendar year in which an insurer has begun to offer credit insurance for which premium rates have not yet been established by the case method but for which a prior insurer submitted notification of a new case required by Regulation .06A(3) and (4) of this chapter, the insurer shall:

(a) File the report for the case required by Regulation .06A(2) of this chapter; and

(b) Submit the insurer's experience and the experience of the prior insurer for the experience period even if the account did not qualify as a case for the most recent policy year.

(2) An insurer that is required to submit its experience and the experience of a prior insurer under §B(1) of this regulation shall submit the experience of each insurer:

(a) Separately by year; and

(b) As a total for a 2-year period.

(3) The Commissioner shall notify an insurer if a report for a case is required to be filed under §B(2) of this regulation.

(4) If an insurer begins to offer credit insurance through a case during an experience period for which premium rates were established for a prior insurer by the case method, the insurer shall certify to the Commissioner that the insurer will not charge premium rates that exceed the rates permitted under Regulation .08E of this chapter.

(5) If an insurer begins to offer credit insurance for a case after the end of a previously established experience period but before the effective date of new premium rates approved by the Commissioner based on that experience period, the:

(a) Commissioner shall, when new premium rates are established, send written notice of the new premium rates to the insurer, stating an effective date that provides the insurer at least 30 days notice; and

(b) Insurer shall:

(i) Beginning not later than the effective date established by the Commissioner, use premium rates not greater than the new premium rates approved by the Commissioner; and

(ii) At the end of the experience period stated by the Commissioner, file the report for the case required by Regulation .06A(2) of this chapter, submitting the experience of the former insurer and the insurer's own experience for the term of the experience period in order to determine subsequent rates for the account.

(6) An insurer that is required to submit its experience and the experience of a former insurer under §B(5)(b)(ii) of this regulation shall submit the experience of each insurer:

(a) Separately by year; and

(b) As a total for a 2-year period.

(7) On the request of a succeeding insurer, a prior insurer shall provide the succeeding insurer with any experience information of the prior insurer that the succeeding insurer needs to meet the requirements of this section.

History

Administrative History: Effective date: January 1, 1978 (4:25 Md. R. 1940)
Administrative History: Chapter revised at 7:11 Md. R. 1035
Administrative History: Regulations .04 and .21 amended as an emergency provision effective September 1, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256)
Administrative History: Regulations .13 and .17 amended effective January 28, 1985 (12:2 Md. R. 139)
Administrative History: Regulation .13 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .15 amended effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .24D adopted effective August 8, 1988 (15:16 Md. R. 1914)
Administrative History: Regulation .27 amended as an emergency provision effective June 24, 1980 (7:14 Md. R. 1345); adopted permanently effective December 30, 1980 (7:24 Md. R. 2256) This amendment changed the effective date given in the Notice of Final Adoption (see 7:11 Md. R. 1035) from July 1, 1980 to September 1, 1980
Administrative History: ——————
Administrative History: Annotation: Regulations .04F(14), .20, and .21, concerning the regulation of maximum commissions, held valid and within the legislative grant of authority to the Insurance Commissioner. Agency quasi-legislative actions are not limited by a recorded administrative record. These regulations and their enabling statute do not violate the Contract Clause of the U.S. Constitution. Automobile Trade Association v. Insurance Commissioner, 292 Md. 15, 437 A. 2d 199 (1981).
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.51 to COMAR 31.13.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .04B amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .06A amended effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .08A, B repealed effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: Regulation .29 adopted effective May 15, 2000 (27:9 Md. R. 860)
Administrative History: ——————
Administrative History: Chapter revised effective March 1, 2001 (27:22 Md. R. 2062)
Administrative History: Regulation .04B amended effective October 12, 2015 (42:20 Md. R. 1266); November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .09A amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .13 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .15A, E amended effective June 1, 2016 (43:5 Md. R. 387)
Administrative History: Regulation .17 amended effective October 12, 2015 (42:20 Md. R. 1266)
Administrative History: Regulation .21A amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .22C amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Commercial Law Article, §12-312 and Title 12, Subtitle 3; Insurance Article, §§2-109, 13-110, 13-111, and 13-112; Annotated Code of Maryland

31.13.02 Credit Life and Credit Health Reinsurance

COMAR 31.13.02.01 Purpose.

In connection with credit life and credit health insurance written in Maryland by an authorized insurer, Insurance Article, §13-116, Annotated Code of Maryland, permits a fronting agreement between the authorized insurer writing the business and an otherwise unauthorized insurer if the unauthorized insurer maintains certain deposits with the Commissioner. The purpose of these regulations is to establish rules with regard to the deposits which are to be held by the Commissioner for the protection of affected authorized insurers, policyholders, certificate holders, and creditors in Maryland.

History

Administrative History: Effective date: December 12, 1980 (7:25 Md. R. 2334)
Administrative History: Regulation .03A amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .03E amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .05 adopted effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.52 to COMAR 31.13.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03I amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .04 Exhibit A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §§2-109, 4-105, 4-116, and 13-116, Annotated Code of Maryland

COMAR 31.13.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Acceptable securities” means any one of or a combination of the following, provided the securities are not in default as to payment of principal or interest at the time of deposit with the Commissioner:

(a) Cash;

(b) General obligations of, or obligations guaranteed by, the federal government;

(d) General obligations of the District of Columbia or of any state of the United States.

(2) “Commissioner” means the Insurance Commissioner of the State of Maryland.

(3) “Fronting agreement” means an agreement by reinsurance or otherwise under which an authorized insurer transfers to one or more unauthorized insurers substantially the entire risk of loss under substantially:

(a) All of the insurance written by the authorized insurer in this State;

(b) All of one or more kinds, lines, types, or classes of insurance;

(d) All of the business in a designated geographical area; or

(e) All of the business written on one or more policy forms.

(4) “Insurer”, unless the context indicates otherwise, means an insurer not licensed to do life and health insurance business in Maryland and not an accredited reinsurer but qualified or proposing to qualify as a fronting reinsurer under Insurance Article, §13-116, Annotated Code of Maryland.

History

Administrative History: Effective date: December 12, 1980 (7:25 Md. R. 2334)
Administrative History: Regulation .03A amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .03E amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .05 adopted effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.52 to COMAR 31.13.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03I amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .04 Exhibit A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §§2-109, 4-105, 4-116, and 13-116, Annotated Code of Maryland

COMAR 31.13.02.03 Deposit.

A. Securities on Deposit with the Commissioner.

(1) In order to qualify as an insurer in accordance with Insurance Article, §13-116, Annotated Code of Maryland, the insurer at all times shall keep on deposit with the Commissioner acceptable securities with a total value at least equal to the sum of §A(1)(a) and (b) of this regulation:

(a) $500,000 reduced by the amount of the insurer's actual capital; and

(b) $750,000 at the time of initial qualification and, after that, $500,000, in either case reduced by the amount of the insurer's actual surplus.

(2) If the insurer's actual capital exceeds $500,000, the excess may be used by the insurer to reduce the amount required by §A(1)(b) of this regulation.

(3) If the insurer's actual surplus exceeds the amount required under §A(1)(b) of this regulation, the excess may not be used to reduce the amount required by §A(1)(a), of this regulation, except as provided in §A(4) of this regulation.

(4) If, after deducting investments which qualify under Insurance Article, §5-510(a) and (b), Annotated Code of Maryland, in the amount of the insurer's actual capital, the insurer's remaining investments which qualify under Insurance Article, §5-511, Annotated Code of Maryland, exceed the amount of the insurer's liabilities as defined in Insurance Article, §5-103, that part of the excess assets which also qualifies under Insurance Article, §5-510(a) and (b), Annotated Code of Maryland, may be used, at the insurer's option, as a credit against either §A(1)(a) or A(1)(b) of this regulation, but not both.

B. In determining the amount of the insurer's actual capital, only the type of investments listed in Insurance Article, §5-510(a) and (b), Annotated Code of Maryland, shall be considered.

C. The requirements of Insurance Article, Title 5, Subtitle 5, shall be used to determine the amount of the insurer's actual surplus.

D. In determining the value of the deposit, securities shall be valued at market but not in excess of par value.

E. In order to ascertain that the value of the securities on deposit is sufficient to meet the requirements of Insurance Article, §13-116, Annotated Code of Maryland, and of this regulation, the insurer shall:

(1) File with the Commissioner not later than March 1 in each calendar year a certified copy of its NAIC Convention Blank form of Annual Statement as of the preceding December 31; and

(2) Require the custodian to supply the Commissioner not later than January 31 in each calendar year with a proper accounting of the securities on deposit as of the preceding December 31. This accounting shall include a listing of the securities on deposit showing the par value and the market value of each, together with a statement as to whether any are in default.

F. If an insurer which has previously qualified under Insurance Article, §13-116, Annotated Code of Maryland, no longer meets the requirements of that section, the Commissioner shall notify the insurer in writing of the additional amount of deposit required to restore the insurer's qualification. If the insurer does not satisfy the requirements by making the additional deposit within 30 days after the date of the Commissioner's notice, the insurer shall forthwith cease to accept any reinsurance under any fronting agreement to which Insurance Article, §13-116, Annotated Code of Maryland, applies.

G. Unless the Commissioner liquidates a deposit for the purpose of paying claims to Maryland policyholders, certificate holders, authorized insurers, or creditors and for providing for the expenses incurred in connection with the payment of these claims, a deposit made by an insurer for the purpose of qualifying under Insurance Article, §13-116, Annotated Code of Maryland, shall remain on deposit with the Commissioner until:

(1) The insurer notifies the Commissioner that it no longer wishes to qualify; and

(2) All policies issued in Maryland and reinsured by the insurer are terminated.

H. If the insurer is adjudged insolvent, or, if for any reason the Commissioner, after a hearing, determines that the rights of authorized insurers, policyholders, certificate holders, or creditors may be in jeopardy, the Commissioner may direct the custodian to immediately deliver to him the securities then held on deposit, or at the Commissioner's option, he may direct the custodian to sell the securities and remit the proceeds of the sale to the Commissioner.

I. An authorized insurer desiring to make a fronting agreement shall first ascertain that the reinsurer is appropriately licensed in Maryland, or is an accredited reinsurer, or is qualified as a fronting reinsurer under Insurance Article, §13-116, Annotated Code of Maryland. An authorized insurer shall be subject to the penalties provided in Insurance Article, §4-113, Annotated Code of Maryland, as well as any other applicable penalties if:

(1) The authorized insurer makes a fronting agreement with a reinsurer which is not licensed, or is not an accredited reinsurer, or has not qualified in accordance with Insurance Article, §13-116, Annotated Code of Maryland; or

(2) The authorized insurer continues in a fronting agreement after having been notified by the Commissioner that the reinsurer has ceased to be qualified as a fronting reinsurer.

J. The deposit required by these regulations may be made either by the insurer, or by another person on behalf of the insurer. If the deposit is made by another person, the custodian agreement shall provide the Commissioner all the rights of access to the deposit which these regulations require. If any agreement with reference to the deposit is made between the insurer and the person making the deposit, the insurer shall submit the agreement to the Commissioner for his approval at the time the insurer requests the Commissioner to accept the custodian agreement under which the deposit is kept.

Cross References

31.13.02.04C

History

Administrative History: Effective date: December 12, 1980 (7:25 Md. R. 2334)
Administrative History: Regulation .03A amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .03E amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .05 adopted effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.52 to COMAR 31.13.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03I amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .04 Exhibit A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §§2-109, 4-105, 4-116, and 13-116, Annotated Code of Maryland

COMAR 31.13.02.04 Custodian Agreement.

A. The deposit of acceptable securities shall be maintained under a custodian agreement acceptable to the Commissioner. If the deposit is made by a person other than the insurer, the Commissioner will require that person to also become a party to the custodian agreement.

B. The custodian shall be a bank located in Maryland, which has deposits insured by the Federal Deposit Insurance Corporation, and which is not affiliated with the insurer.

C. Not later than January 31 in each calendar year, the custodian shall give the accounting referred to in Regulation .03E(2) of this chapter to the Commissioner and to the insurer. At the Commissioner's request at any other time, the custodian also shall give an accounting to the Commissioner and to the insurer within 15 days of the Commissioner's request.

D. The expense of maintaining the deposit under the custodian agreement and of making the reports required of the custodian shall be borne by the insurer.

E. The custodian agreement shall provide that the custodian shall promptly return the deposit to the Commissioner at the Commissioner's request, or at the Commissioner's option the custodian shall sell all or a portion of the deposit and remit the net proceeds of the sale to the Commissioner.

Agency Note: A specimen acceptable form of custodian agreement is attached to these regulations as Exhibit A. Appropriate changes in this form will be required if the deposit is made on behalf of the insurer by another person.

Exhibit A

This agreement is made and executed this ____ day of _____________ 20___, by and between the Insurance Commissioner of the State of Maryland (Commissioner), the XYZ Life Insurance Company, a Minnesota Corporation (Insurer), and the ABC Bank, a Maryland Corporation (Custodian).

In this agreement the term “securities” means only any one of, or a combination of:

(a) Cash,

(b) General obligations of, or obligations guaranteed by, the federal government,

(d) General obligations of the District of Columbia or of any state of the United States, provided in any case that the obligations are not in default as to payment of principal or interest at the time of deposit with the Commissioner.

WHEREAS the reinsurance of credit life and credit health insurance written in Maryland is prohibited unless the reinsurer is an authorized insurer or is an accredited reinsurer, or unless the reinsurer makes a deposit of securities with the Commissioner in accordance with Insurance Article, §13-116, Annotated Code of Maryland,

NOW, THEREFORE, in consideration of these covenants, the parties agree as follows:

The Insurer agrees to pledge securities and deliver them to the custodian as directed by the Commissioner in accordance with the provisions of Insurance Article, Annotated Code of Maryland.

The total value of the securities shall be not less than required by Insurance Article, §13-116, Annotated Code of Maryland, and by regulations under COMAR 31.13.02.

The insurer has assigned, transferred, and delivered to the Commissioner, and the Commissioner has received securities which have been accepted and approved by the Commissioner to the aggregate amount in value prescribed by the Commissioner, which are to be held by the custodian for the Commissioner in accordance with Insurance Article, Annotated Code of Maryland, the securities being as follows:

The custodian agrees, at the expense of the insurer, to hold all of the securities received by it from the insurer in accordance with the terms of this agreement. The custodian also agrees not later than January 31 in each calendar year to give a proper accounting of the securities as of the preceding December 31 to the Commissioner and to the insurer, and to give an

accounting to the Commissioner and to the insurer at other times at the Commissioner's request within 15 days of the request. The accounting shall include a listing of the securities on deposit, showing the par value and the market value of each, together with a statement as to whether any are in default.

The custodian assumes no responsibility for the character of the securities held by it under this agreement nor for the sufficiency of the value of the securities.
The insurer shall have the right, from time to time, to deliver to the custodian additional securities as prescribed by Insurance Article, §13-116, Annotated Code of Maryland, and by regulations under COMAR 31.13.02 to be held by the custodian, subject to the terms of this agreement and to substitute other securities in the place and stead of the securities then held by the custodian, provided that every addition, substitution, or withdrawal shall first be approved in writing by the Commissioner.
The insurer shall be entitled to all interest which may become due and payable on the securities, and the custodian shall permit the insurer to remove and withdraw the interest unless otherwise directed by the Commissioner.
If the insurer becomes insolvent, or, if for any reason the Commissioner determines that the rights of policyholders, certificate holders, authorized insurers, or creditors may be in jeopardy, the Commissioner may issue a written order briefly stating his determination and directing the custodian immediately to deliver to the Commissioner the securities then held by the custodian under the terms of this agreement. This order shall be effective upon delivery to the custodian. A copy of the order shall also be delivered to the insurer. Upon receipt of the order, the custodian shall promptly deliver to the Commissioner the securities then held by the custodian under the terms of this agreement.
Instead of requesting that the securities be delivered to him, the Commissioner may direct the custodian to sell, assign and deliver all or any portion of the securities at any public or private sale within or without the State of Maryland. If the custodian is directed by the Commissioner to sell securities, the custodian is authorized to deduct from the proceeds of the sale the amount necessary for the payment of costs and expenses incident to the sale. The custodian shall promptly pay the balance of the proceeds of the sale to the Commissioner.
This agreement may be terminated by either the insurer or the custodian 60 days following delivery of written notice of intention to terminate to each of the other parties, including the Commissioner, provided, however, that the custodian may not release or return to the insurer any of the securities held by it under this agreement without first having received written authority from the Commissioner to do so.
The Commissioner may at any time terminate this agreement by written notice to each of the other parties. Upon receipt of the notice, the custodian shall immediately deliver all securities held under this agreement to the Commissioner.

IN WITNESS WHEREOF, the Insurance Commissioner of the State of Maryland has affixed his hand and seal, and XYZ Life Insurance Company and ABC Bank have caused this agreement to be executed on their behalf by their president or vice president and have caused their corporate seals to be affixed, and duly attested, all as of the day and year first above written.

ATTEST:

Secretary Insurer

Corporate Seal By:___________________________________________________

President-Vice President

Secretary Custodian

Corporate Seal By:___________________________________________________

President-Vice President

(SEAL) ______________________________________________________

Insurance Commissioner

State of Maryland

History

Administrative History: Effective date: December 12, 1980 (7:25 Md. R. 2334)
Administrative History: Regulation .03A amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .03E amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .05 adopted effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.52 to COMAR 31.13.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03I amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .04 Exhibit A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §§2-109, 4-105, 4-116, and 13-116, Annotated Code of Maryland

COMAR 31.13.02.05 Letter of Credit.

A. To the extent that the securities on deposit with the Commissioner and the other assets of the fronting reinsurer are insufficient to qualify in accordance with Insurance Article, §13-116, Annotated Code of Maryland, and these regulations, the insurer may provide the Commissioner with an irrevocable letter of credit in an amount at least equal to the shortfall.

B. In order to be acceptable for the purpose of this regulation, the letter of credit shall be issued by a bank located in Maryland, which has deposits insured by the Federal Deposit Insurance Corporation, and which is not affiliated with the insurer.

C. The letter of credit shall be automatically renewable from time to time, and may only be terminated by the issuing bank upon 30 days' written notice sent to the Commissioner by certified or registered mail.

History

Administrative History: Effective date: December 12, 1980 (7:25 Md. R. 2334)
Administrative History: Regulation .03A amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .03E amended effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: Regulation .05 adopted effective October 29, 1990 (17:21 Md. R. 2527)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.52 to COMAR 31.13.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Regulation .02B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .03I amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .04 Exhibit A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §§2-109, 4-105, 4-116, and 13-116, Annotated Code of Maryland

31.13.03 Standards for Credit Involuntary Unemployment Benefit Insurance

COMAR 31.13.03.01 Purpose.

The purpose of this chapter is to promote the public welfare by regulating credit involuntary unemployment benefit insurance and to establish standards for premium rates.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.02 Regulation of Commissions.

The Commissioner finds it necessary to establish maximum rates of commission that may be paid to insurance producers and maximum benefits payable to creditor group policyholders in the form of dividends, retrospective rate credits, or any other form, to ensure that credit involuntary unemployment benefit insurance operations of insurers do not:

A. Result in rates that are excessive in relation to benefits;

B. Endanger the solvency of insurers rendering their transaction of business hazardous to policyholders or the public; and

C. Adversely affect other classes of business of insurers.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.03 Applicability.

This chapter applies to all authorized insurers delivering, issuing for delivery, or proposing to deliver or issue for delivery, credit involuntary unemployment benefit insurance in Maryland under individual policies, group policies, or group certificates that are required to be filed under Insurance Article, §13-110, Annotated Code of Maryland.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.04 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Account” means the coverage for a single plan of benefits for credit involuntary unemployment benefit insurance under one premium payment method offered to a single class of business in Maryland by one creditor, whether written on a group or individual basis, or both.

(2) “Advance loan payment” means the payment of a scheduled loan installment before the installment's scheduled due date on a loan repayable in substantially equal installments.

(3) “Balloon loan” means an indebtedness, the initial amount of which includes both:

(a) An amount that decreases by substantially equal periodic payments; and

(b) A final installment amount that is larger than any one of the periodic payments.

(4) “Case” means an account or, at the option of the insurer, a combination of some or all of the insurer's accounts written under an identical plan of benefits in which the gross premiums before refunds and at prima facie rates, whether consisting of one or more accounts, exceed or may reasonably be expected to exceed $50,000 in a policy year.

(5) “Case method” means the filing and rate requirements stated in this chapter for business that meets the definition of a case.

(6) “Class of business” includes:

(a) Cash loans not secured by real estate and made by banks;

(b) Cash loans made by credit unions;

(d) Cash loans secured by real estate and made by banks;

(e) Cash loans secured by real estate and made by creditors other than banks and credit unions;

(f) Production credit association and other agricultural loans;

(g) Installment sales finance contracts; and

(h) Revolving charge agreements, credit card accounts, and open-end credit other than credit union accounts.

(7) Commission.

(a) “Commission” means all forms of compensation or remuneration including dividends, retrospective rating credits, or any other form of benefit.

(b) “Commission” includes, but is not limited to:

(i) Commissions as a percentage of, or otherwise based on, premiums or amounts of insurance sold;

(ii) Retrospective or refund rate credits, except credits on creditor paid insurance;

(iii) Dividends, except dividends on creditor paid insurance;

(iv) Commissions or any other form of compensation or remuneration for reinsurance ceded or assumed;

(v) Service fees or administrative fees;

(vi) Consulting fees;

(vii) Expense allowances;

(viii) Gifts;

(ix) Expense for vacations or travel other than travel for training purposes or attendance at conventions;

(x) Value of electronic data-processing equipment or services furnished;

(xi) Allowances or subsidies for rent, payroll, advertising, telephone, or other purposes;

(xii) Advertising provided by the insurer;

(xiii) Supplies, excluding application, reporting and claim forms, envelopes for transmitting the forms, and brochures, rate books, and rate charts related to the insurer's credit involuntary unemployment benefit insurance;

(xiv) Dividends, profits, capital gains, commissions, or other benefits that may be reasonably anticipated under reinsurance agreements with any unauthorized reinsurer affiliated with or controlled by a licensed insurance producer, a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor or the licensed insurance producer;

(xv) Services, including an amount paid to an employee of the insurer specifically for services provided to a creditor or affiliate of the creditor if the services are normally performed outside the home office of the insurer, but not including services performed by account executives or liaison personnel of the insurer who visit the offices of the creditor at occasional intervals, are regular salaried officers or employees of the insurer, and receive no commission or other compensation directly dependent upon the amount of business obtained;

(xvi) Value of training programs for employees of the creditor or insurance producer, excluding training of employees provided solely in connection with a program of credit involuntary unemployment benefit insurance for the purpose of acquainting the creditor's employees with administrative procedures of the insurer when the salary of the employees during the training period is paid by the creditor;

(xvii) Rental by the insurer of space or equipment from the insurance producer or creditor, excluding rentals not related to any insurance transaction on terms approved by the Commissioner;

(xviii) Commission or some other form of compensation or remuneration in excess of what otherwise would be payable in connection with the sale of allied lines of insurance or other business, such as credit property insurance and maintenance warranties;

(xix) Profit sharing plans;

(xx) Bonuses;

(xxi) Finders' fees; and

(xxii) Offers of share ownership in an agency or corporation at less than the fair market value.

(i) The cost to the insurer of conducting a review performed under Regulation .21 of this chapter; or

(ii) Services performed by account executives or liaison personnel of the insurer who visit the offices of the creditor at occasional intervals, are regular salaried officers or employees of the insurer, and receive no commission or other compensation directly dependent upon the amount of business obtained.

(8) “Commissioner” means the Maryland Insurance Commissioner.

(9) “Consumer loans” means loans issued by lenders licensed under Financial Institutions Article, Title 11, Subtitle 2, Annotated Code of Maryland, and made under Commercial Law Article, Title 12, Subtitle 3, Annotated Code of Maryland.

(10) “Credit involuntary unemployment benefit insurance” means insurance on a debtor that provides indemnity for payments that are due on a specific loan or other credit transaction while the debtor is involuntarily unemployed.

(11) Creditor-Paid Insurance.

(a) “Creditor-paid insurance” means insurance in which the creditor pays the insurance premium without separate charge to the debtor.

(b) “Creditor-paid insurance” does not include a transaction if:

(i) The debtor is required to pay an identifiable charge or premium for credit involuntary unemployment benefit insurance; or

(ii) There is a differential in finance, interest, carrying, service, or other similar charge made to debtors who are in similar circumstances except for their insured or noninsured status.

(12) “Earned premiums at prima facie” means the premiums that would have been earned if all earned premiums had been written at prima facie rates.

(13) “Enroller” means a person:

(a) Who enrolls individuals or issues certificates under group credit involuntary unemployment benefit insurance;

(b) Who does not receive any form of commission, compensation, remuneration, or other benefit based on this activity; and

(14) “Experience period” means 2 consecutive calendar years or, at the option of the insurer, 2 consecutive policy years under a group policy issued to one creditor or under one case.

(15) “Family leave” means an employer-approved temporary leave of absence due to one of the following:

(a) The birth of a child;

(b) The placement of a child for adoption or foster care;

(d) Any other event as may be defined in the policy and approved by the Commissioner.

(16) “Full time” means working for wages or salary for at least 30 hours per week.

(17) Insurance Producer.

(a) “Insurance producer” has the meaning stated in Insurance Article, §1-101(u), Annotated Code of Maryland.

(b) “Insurance producer” includes a person who:

(i) Sells a group or individual policy of credit involuntary unemployment benefit insurance; or

(ii) Receives any form of commission, compensation, remuneration, or other benefit based on enrolling individuals or issuing certificates under group credit involuntary unemployment benefit insurance.

(18) Involuntary Unemployment.

(a) “Involuntary unemployment” means involuntary loss of employment.

(b) “Involuntary unemployment” includes a loss of employment as a result of individual or mass layoff, termination by employer, organized labor dispute including general strike and lockout, or any other event defined by the policy.

(19) “Joint involuntary unemployment insurance” means credit involuntary unemployment benefit insurance issued to two codebtors if both are jointly and severally liable for the debt which pays a full benefit as defined in the policy if either or both of the codebtors becomes eligible for benefits under the policy.

(20) “Loss ratio” means the ratio of incurred claims to premiums earned during a specified period.

(21) “New case” means an account in which the gross premiums before refunds and at prima facie premium rates exceed or may reasonably be expected to exceed $50,000 in the most recent policy year, but did not exceed $50,000 in the prior policy year.

(22) “Monthly premium insurance” means insurance for which a separately identifiable insurance premium is paid each month.

(23) Plan of Benefits.

(a) “Plan of benefits” means credit involuntary unemployment benefit insurance that provides benefits after either a 30-day elimination period or a 30-day retroactive waiting period, on either a single premium or monthly premium basis, and provides a maximum number of 6, 9, 12, 18, or 24 monthly benefits.

(b) “Plan of benefits” includes:

(i) Each possible combination of waiting period, premium method, and maximum number of benefits; and

(ii) Any other plan of benefits approved by the Commissioner.

(24) Policy Year.

(a) “Policy year” means, in the case of a group policy, the period between a policy anniversary and the next succeeding policy anniversary.

(b) “Policy year” means, in the case of an individual policy, a calendar year or a period of 12 consecutive months beginning from an anniversary of the opening of an account, as the insurer may elect.

(25) “Prima facie loss ratio” means the ratio of incurred claims to earned premiums at prima facie during a specified period.

(26) “Prima facie premium rates” means maximum applicable premium rates as authorized and promulgated by the Commissioner from time to time under Regulation .10 of this chapter.

(27) Single Premium Insurance.

(a) “Single premium insurance” means insurance for which the debtor pays or finances the entire required premium in advance.

(b) “Single premium insurance” includes insurance if:

(i) The creditor adds identifiable insurance charges or premiums for credit insurance to the indebtedness; and

(ii) A direct or indirect finance, carrying, credit, or service charge is made to the debtor on the insurance charges or premiums.

(28) Unauthorized Reinsurer.

(a) “Unauthorized reinsurer” means any insurer meeting the qualifications of a nonadmitted accredited reinsurer.

(b) “Unauthorized reinsurer” does not include any insurer authorized to do business in this State or any insurer qualified under Insurance Article, §13-116, Annotated Code of Maryland.

Cross References

31.13.03.10C

31.13.03.15A

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.05 Loss Ratio.

A. Benefits for policies issued under these regulations shall be deemed reasonable in relation to premiums if claims incurred under the policies result in, or may reasonably be expected to result in, a loss ratio of not less than 55 percent when premiums do not exceed prima facie premium rates.

B. When the prima facie loss ratio exceeds 58 percent, the premiums shall be determined in accordance with the methods of Regulation .12 of this chapter.

C. Rate Reduction.

(1) When the prima facie loss ratio is less than 52 percent:

(a) A reduced premium rate shall be used that is calculated by dividing the prima facie loss ratio by 0.55 and multiplying the result by the prima facie premium rate; but

(b) Except as provided in §C(2) of this regulation, the reduced premium rate may not be less than 40 percent of the prima facie premium rate.

(2) At the option of the insurer, a premium rate less than 40 percent of the prima facie premium rate may be used.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.06 Statistics and Reporting Forms.

A. General Requirements. To permit the Commissioner to review the basis of prima facie premium rates and the basis of premium rates being charged on the case method, each insurer writing credit involuntary unemployment benefit insurance shall:

(1) Maintain statistics relating to the insurer's Maryland business; and

(2) File the statistics with the Commissioner in the form required by the Commissioner.

B. Case Filing Requirements.

(1) An insurer shall file with the Commissioner the statistics:

(a) For each account that has qualified as a case for the 2 most recent policy years, not later than 120 days after the end of the second calendar year to which the statistics relate; and

(b) For all other business, including new cases, not later than June 30 following the close of the calendar year to which the statistics relate.

(2) Each insurer writing credit involuntary unemployment benefit insurance also shall file with the Commissioner:

(a) Notice of each account that is a new case;

(b) The identity of the creditor for each new case, including:

(i) The corporate name of the creditor;

(ii) Any “trading as” name used by the creditor;

(iii) The address and phone number of the creditor; and

(iv) The name of a contact person for insurance matters at the creditor; and

(3) An insurer shall file the information on a new case with the Commissioner not later than the June 30 following the close of the calendar year in which the account became a new case.

(4) Use of Code Numbers.

(a) In filing the information required by this section, an insurer may use a code number instead of the name and address of a creditor.

C. Reports required under §B(1)(b) of this regulation shall be submitted on a calendar year basis.

D. All reports, both those on a calendar year basis and those on the case method, shall be submitted separately for:

(1) Each class of business;

(2) Each premium payment method, single premium or monthly premium;

(3) Each plan of benefits;

(4) Single credit involuntary unemployment benefit insurance and joint credit involuntary unemployment benefit insurance; and

(5) Family leave.

E. Every report filed with the Commissioner shall contain the following information:

(1) Gross premiums written;

(2) Refunds of premiums on terminated insurance;

(3) Net premiums written;

(4) Unearned premium reserve at beginning of period;

(5) Unearned premium reserve at end of period;

(6) Earned premiums, which equal §E(1) of this regulation minus §E(2) of this regulation, minus the result of §E(5) of this regulation minus §E(4) of this regulation;

(7) Earned premiums at prima facie;

(8) Claims paid;

(9) Claim reserve at beginning of period;

(10) Claim reserve at end of period;

(11) Claims incurred, which equal §E(8) of this regulation plus the result of §E(10) of this regulation minus §E(9) of this regulation;

(12) Loss ratio, which equals §E(11) of this regulation divided by §E(6) of this regulation;

(13) Prima facie loss ratio, which equals §E(11) of this regulation divided by §E(7) of this regulation, rounded to two decimal places;

(14) Dividends and experience rating refunds;

(15) All other commissions, compensation, and remuneration to creditors or insurance producers;

(16) Total of §E(14) and (15) of this regulation;

(17) Ratio of §E(16) of this regulation divided by §E(3) of this regulation; and

(18) Combined ratio, which equals the sum of §E(12) of this regulation and §E(17) of this regulation.

F. Every statistical report shall be certified by a responsible officer of the insurer and shall be accompanied by a statement certified by the president or other responsible officer of the insurer that the insurer has not paid or credited or provided commission as defined in this chapter in excess of the applicable maximum amounts specified in Regulation .15 of this chapter.

Cross References

31.13.03.24B(1)(a)

31.13.03.24B(5)(b)(ii)

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.07 Rate Changes and Creditor-Paid Insurance.

A. Premium rates under a group policy of credit involuntary unemployment benefit insurance may not be increased more than once during the first policy year, and a subsequent increased rate may not be charged within 12 months of any prior change in rates.

B. Monthly Premium Insurance.

(1) In a policy of monthly premium insurance, a change in rates may not be made effective until 31 days after all existing debtors in the group have been notified of any increased charge that they will be required to pay as a result of the change in rates.

(2) The notice required by §B(1) of this regulation shall be deemed to be satisfied if the insurer:

(a) Notifies the creditor of the increased charge;

(b) Provides the creditor with the necessary forms to be mailed by the creditor to the debtors advising them of the increased charge; and

(1) Forms and rates meet the requirements of Insurance Article, Title 13, Subtitle 1, Annotated Code of Maryland; and

(2) Rates are actuarially consistent with rates prescribed by this chapter for other forms of credit involuntary unemployment benefit insurance.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.08 Premium Rates by Case Method.

A. Case Comprising Two or More Accounts.

(2) When submitting an experience report for a case comprising two or more accounts, the insurer shall include a list of the names of each account included in the case.

B. Premium rates for each case shall be established by the insurer to afford a loss ratio of at least 55 percent if the resulting rates do not exceed prima facie premium rates, and may be established in accordance with the methods of Regulation .12 of this chapter if the substitution of prima facie premium rates would result in a loss ratio in excess of 55 percent.

C. Existing Account with Rate Established by Case Method.

(1) If an insurer acquires an existing account for which rates were established by another insurer by the case method, the new insurer shall use the same rates or rates not greater than those which were approved for use by the former insurer until the end of the existing experience period established by the former insurer.

(2) In reporting this account at the end of the experience period, the new insurer shall combine the experience of the former insurer with its own experience for the term of the experience period in order to determine subsequent rates for the account.

D. Reports.

(1) Reports for each case shall be submitted by the insurer at the end of each experience period, together with a statement of the then-applicable premium rates proposed by the insurer.

(2) If the premium rates proposed by the insurer for the case do not meet the loss ratio standards of §B of this regulation, the insurer shall make an appropriate premium reduction, to be effective on or before the 45th day after the date of filing of the experience report, unless, for good cause shown, the Commissioner approves a higher premium rate.

(3) If the insurer does not propose to reduce premium rates in accordance with these regulations, the Commissioner shall notify the insurer and afford it a hearing to show cause to the Commissioner why the premium rate should not be reduced.

(4) The Commissioner shall notify the insurer in writing within 60 days after the filing of the experience report of the Commissioner's findings in regard to the premium rate which the Commissioner determines should be charged.

(5) The insurer shall implement the rates determined by the Commissioner not later than 45 days after receipt of the Commissioner's notice of the rates that the Commissioner authorizes for the case.

E. Credit Involuntary Unemployment Benefit Insurance Case Experience and Application of Rate Adjustment Factor.

(1) If a plan of benefits for credit involuntary unemployment benefit insurance qualifies as a case, whether consisting of accounts of one or more creditors, the case experience submitted by the insurer at the end of the experience period shall include the experience of all plans of benefits for credit involuntary unemployment benefit insurance written by creditors comprising the case.

(2) If the experience of the case results in a downward rate adjustment, the insurer shall apply the rate adjustment factor to all plans of benefits for credit involuntary unemployment benefit insurance written by the creditors comprising the case.

(3) If the experience of the case results in an upward rate adjustment, the insurer may apply the rate adjustment factor to all plans of benefits for credit involuntary unemployment benefit insurance written by the creditors comprising the case.

F. Rounding Rate Calculations. Premium rates for credit involuntary unemployment benefit insurance determined under this regulation shall be rounded to three decimal places per $10 of monthly benefit payable.

Cross References

31.13.03.24B(4)

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.09 General Premium Rate Standards and Increased Rates.

A. General.

(1) With respect to all premium rates not eligible for filing in accordance with the case method, the Commissioner shall accept as meeting the standards of Insurance Article, §13-110(b)(1), Annotated Code of Maryland, those premium rate filings that do not exceed prima facie premium rates stated in Regulation .10 of this chapter for the several categories of insurance described in Regulation .10 of this chapter.

(2) The prima facie premium rates in Regulation .10 of this chapter are based on the assumption that a policy fee, policy issue fee, certificate fee, or other additional charge will not be made.

B. Premium rates for use with forms that have less restrictive provisions than those described in this chapter may not exceed the prima facie rates specified in Regulation .10 of this chapter.

C. All prima facie premium rates and standards and formulas for increased rates refer to individual policies and group certificates insuring single lives.

D. Joint Credit Involuntary Unemployment Benefit Insurance. For credit involuntary unemployment benefit insurance issued to cover two debtors jointly, the premium for the involuntary unemployment insurance benefits may not exceed 1.80 times the premium that would be charged if one debtor alone were insured.

E. Application for Approval of Higher Rates.

(1) With respect to premium rates not eligible for filing in accordance with the case method, an insurer may file with the Commissioner an application for approval of rates higher than the prima facie premium rates for a single creditor or for one or more classes of business.

(2) The application shall specify the basis for the increased rate requested and shall be accompanied and supported by:

(a) Credible statistics applicable to the business under consideration; and

(b) A demonstration that the requested rates are in conformity with, or less than, rates that would meet the guidelines for increased rates set forth in Regulation .12 of this chapter.

F. Notice of Increased Rate.

(1) The Commissioner may grant approval of an increased rate for a stated period.

(2) If a period is not specified in the Commissioner's notice of approval, an approval by the Commissioner of an increased rate shall be effective for a period of 1 year.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.10 Prima Facie Premium Rates for Credit Involuntary Unemployment Insurance.

A. Prima Facie Single Premium Rates. The premiums charged for credit involuntary unemployment insurance policies having all policy provisions not less favorable to the insured debtor than those required by Regulation .l1 of this chapter may not exceed, on policies of credit involuntary unemployment insurance for which a single premium is charged in advance for the entire duration of the insurance and the indebtedness is repayable in equal installments, the amount shown in the table below for each $10 of the monthly benefit insured:

(1) Prima Facie Single Premium Rates per $10 of Monthly Benefit Payable

| Number of Months in Which Indebtedness is Repayable | Benefits Retroactive 30 Day Waiting Period Maximum Number of Benefits Per Occurrence | | | | | | --- | --- | --- | --- | --- | --- | | | 6 | 9 | 12 | 18 | 24 | | 9 | $ 1.276 | $ | $ | $ | $ | | 12 | 1.816 | 2.185 | | | | | 24 | 3.926 | 4.862 | 5.466 | 6.216 | | | 36 | 5.964 | 7.447 | 8.443 | 9.687 | 10.584 | | 48 | 7.933 | 9.943 | 11.318 | 13.039 | 14.307 | | 60 | 9.833 | 12.353 | 14.095 | 16.276 | 17.902 | | 72 | 11.668 | 14.680 | 16.776 | 19.401 | 21.373 | | 84 | 13.441 | 16.928 | 19.364 | 22.420 | 24.725 | | 96 | 15.152 | 19.098 | 21.864 | 25.334 | 27.962 | | 108 | 16.805 | 21.194 | 24.279 | 28.149 | 31.088 | | 120 | 18.401 | 23.218 | 26.610 | 30.864 | 34.107 |

(2) Prima Facie Single Premium Rates per $10 of Monthly Benefit Payable

| Number of Months in Which Indebtedness Is Repayable | Benefits not Retroactive 30 Day Elimination Period Maximum Number of Benefits per Occurrence | | | | | | --- | --- | --- | --- | --- | --- | | | 6 | 9 | 12 | 18 | 24 | | 9 | $ 0.950 | $ | $ | $ | $ | | 12 | 1.352 | 1.566 | | | | | 24 | 2.923 | 3.485 | 3.834 | 4.303 | | | 36 | 4.441 | 5.337 | 5.923 | 6.706 | 7.311 | | 48 | 5.906 | 7.126 | 7.940 | 9.027 | 9.882 | | 60 | 7.321 | 8.854 | 9.887 | 11.268 | 12.366 | | 72 | 8.688 | 10.522 | 11.768 | 13.432 | 14.763 | | 84 | 10.008 | 12.113 | 13.584 | 15.521 | 17.079 | | 96 | 11.282 | 13.688 | 15.338 | 17.539 | 19.315 | | 108 | 12.512 | 15.191 | 17.032 | 19.488 | 21.474 | | 120 | 13.700 | 16.641 | 18.667 | 21.369 | 23.559 |

B. Prima Facie Monthly Premium Rates.

(1) On policies of group credit involuntary unemployment insurance issued as monthly premium insurance, a monthly premium rate shall be used instead of the rates referred to in §A of this regulation.

(2) The rates under this plan may not exceed those shown in the schedule immediately below.

(3) The rate shall be applied to the amount of the monthly payment insured in that month regardless of the duration of the loan.

Prima Facie Monthly Premium Rates per $10 of Monthly Benefit Payable

| Maximum Number of Monthly Benefits per Occurrence | Benefits Retroactive 30 Day Waiting Period | Benefits not Retroactive 30 Day Elimination | | --- | --- | --- | | 6 | $0.184 | $0.137 | | 9 | 0.233 | 0.167 | | 12 | 0.268 | 0.188 | | 18 | 0.312 | 0.216 | | 24 | 0.346 | 0.239 |

C. If a credit involuntary unemployment policy, otherwise meeting the requirements of Regulation .11 of this chapter, provides for payment of benefits in the event of family leave as defined in Regulation .04B(15) of this chapter, the insurer may charge a rate not to exceed 4 percent more than the rates in Regulations .09E, .10A or B, or .12B of this chapter.

D. The prima facie premium rates for credit involuntary unemployment benefit insurance in this regulation apply to all premiums charged on or after the effective date of this chapter, for every class of business.

E. Rates Per $100 Outstanding Balance Per Month.

(1) Rates stated as $0.xx per $100 outstanding balance per month shall be consistent with the above rates.

(2) For example, if a credit card requires a minimum payment of 5 percent of the balance, a rate of $0.40 per $10 of monthly benefit may also be stated as $0.20 per $100 of outstanding balance because $10 is 5 percent of $200.

(3) As another example, if the minimum required payment is 3 percent of the outstanding balance, the $0.40 per $10 of monthly benefit rates translates to $0.12 per $100 of outstanding balance.

(4) For purposes of this section, the following formula may be used:

M = R × 10 × P

If: M = monthly rate per $100 of outstanding balance,

R = rate per $10 of payment of term,

P = the percent of the outstanding balance required by the creditor as the minimum monthly payment, but not less than 3 percent.

Cross References

31.13.03.04B(26)

31.13.03.09A(1)

31.13.03.09A(2)

31.13.03.09B

31.13.03.11A

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.11 Underwriting Requirements for Insurance Prima Facie Premium Rates.

A. The prima facie premium rates in Regulation .10 of this chapter assume that contracts providing credit involuntary unemployment benefit insurance do not require evidence of individual insurability from any eligible debtor electing to purchase coverage except:

(1) A requirement that the debtor has been employed full-time for not more than 30 days before the effective date of coverage;

(2) A requirement that the debtor has not received notice of impending termination or layoff within 60 days before the effective date of coverage; and

(3) That there are no age restrictions, except that coverage may be restricted based on age if:

(a) There is credit health insurance coverage or credit life insurance coverage on the same debt;

(b) The credit health insurance coverage or credit life insurance coverage is subject to an age restriction; and

(i) Subject to the same age restriction that applies to the credit health insurance coverage; or

(ii) If no age restriction applies to the credit health insurance, subject to the same age restriction that applies to the credit life insurance.

B. Regardless of individual policy or certificate amounts, for underwriting purposes it is assumed that the policy contains no exclusions except the following:

(1) Voluntary forfeiture of salary, wages, or employment income;

(2) Resignation;

(3) Retirement;

(4) Loss of employment as a result of willful or criminal misconduct;

(5) Loss of employment as a result of seasonal employment;

(6) Loss of employment as a result of disability;

(7) Discharge from military; or

(8) Loss of self-employment without a declaration of bankruptcy, either of the debtor or of the debtor's business.

C. Acquisition of Existing Account.

(1) If an insurer acquires an existing account providing involuntary unemployment benefits on a monthly premium basis or on another basis for which the debtor is charged monthly, the new insurer shall honor all claims for periods of involuntary unemployment commencing on or after the date of takeover and all claims after that which would have been paid under the former policy.

(2) The original insurer shall honor all claims for periods of involuntary unemployment commencing before the date of takeover.

Cross References

31.13.03.10C

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.12 Guidelines for Increased Rates.

A. Applications to the Commissioner for higher than prima facie premium rates shall be accompanied and supported by credible statistics.

B. Approval of applications for increased rates shall depend on whether the requested rates are not greater than rates based on the standards in this chapter.

C. On policies of credit involuntary unemployment benefit insurance for which the prima facie loss ratio exceeds 58 percent, the rate shall be determined by the formula:

((Prima Facie Loss Ratio - 0.55) (1.41) + 1)(Prima Facie Rate).

D. Premium rates for credit involuntary unemployment benefit insurance determined under this regulation shall be rounded to three decimal places per $10 of monthly benefit payable.

Cross References

31.13.03.05B

31.13.03.08B

31.13.03.09E(2)(b)

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.13 Remittance of Premiums to Insurer.

A. Premiums shall be remitted to the insurer within 60 days of their due dates.

B. For purposes of this chapter, the deposit of premiums to any demand deposit account with the creditor or affiliate and the continued retention of the premiums in the deposit account for more than 60 days may not be deemed remittance to the insurer.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.14 Refunds.

A. In event of termination of the insurance before the scheduled maturity date of the indebtedness, the insurer promptly shall refund or credit to the person entitled to it the appropriate portion of any premiums paid for the insurance.

B. In the case of monthly premium credit involuntary unemployment benefit insurance, the amount of the refund or credit may not be less than the pro rata gross unearned premium.

C. Single Premium Credit Insurance.

(1) In the case of single premium credit involuntary unemployment benefit insurance, the amount of the refund or credit may not be less than the refund computed by the sum of the digits method commonly known as the Rule of 78.

(2) The insurer may not reduce the amount of the refund based on the amounts of benefit paid.

D. Calculation.

(1) At the option of the insurer, refunds under §C of this regulation may be calculated on a daily or on a monthly basis, as may be elected in the filing made by the insurer.

(2) Refunds may be calculated on an approximate daily basis by interpolating pro rata between the values at the beginning and at the end of the month.

(3) For a calculation under §D(2) of this regulation, the insurer shall assume that every month has 30 days.

(4) If refunds are calculated on a monthly basis, a charge may not be made for a period less than 15 days elapsing since the last monthly installment due date. If the period elapsing since the last monthly installment due date is 15 days or more, a charge may be made for the full month.

E. A premium refund is not required under §A of this regulation if the sum of the refunds on all insurance issued to the debtor by an insurer in connection with the loan would be less than $1.

F. If a refund or credit is due to the debtor in accordance with Insurance Article, §13-107(c)(3) or 13-112(b), Annotated Code of Maryland, the amount of refund or credit may not be less than the amount paid by the debtor, less the amount payable under any substituted or delayed coverage issued to the debtor.

G. Death of Debtor. In the event of the death of a debtor who is covered for credit involuntary unemployment benefit insurance:

(1) The credit involuntary unemployment benefit insurance may not be deemed to have terminated by the performance of the insurance contract by reason of the debtor's death; and

(2) The insurer shall make the appropriate refund for the credit involuntary unemployment benefit insurance coverage that terminated at the date of death.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.15 Commission to Insurance Producers and Creditors.

A. On all loans originating in Maryland, an insurer may not directly or indirectly pay, allow, or offer to pay any form of commission, as defined in Regulation .04B(7) of this chapter, in excess of the limits stated in this chapter on a form of credit involuntary unemployment benefit insurance, regardless of whether the payment is made to a licensed insurance producer, a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor or the licensed insurance producer.

B. The maximum commission payable to all payees on each policy of credit involuntary unemployment benefit insurance may not exceed a total of 36 percent of prima facie premium rates.

C. A commission paid to a creditor, or an affiliate, corporate parent, subsidiary, associate, director, officer, active or retired employee, or other representative of the creditor, regardless of whether the payee is a licensed insurance producer, may not exceed 32 percent of prima facie premium rates.

D. Payment as described in §C of this regulation does not preclude payment of commission to a licensed insurance producer not listed in §C of this regulation, if the total commission paid under §C of this regulation and under this section does not exceed the maximum rate allowed in §B of this regulation.

E. Payment of Commission by Insurance Producer.

(1) A licensed insurance producer proposing to pay commission to any payee listed in §C of this regulation shall first inquire of the insurer whether any commission is being paid by the insurer to that payee on the same business.

(2) The insurance producer may not pay that payee an amount which, if added to the amount paid by the insurer for the same business, would cause the payment to exceed the maximum rate allowed in §C of this regulation.

(3) The insurer shall cooperate with the insurance producer in providing the information called for by this section.

Cross References

31.13.03.06F

31.13.03.16A

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.16 Reinsurance Treaties.

A. To permit the Commissioner to enforce the provisions of Regulation .15 of this chapter with respect to that portion of commission defined by Regulation .04B(7)(a)(xiv) of this chapter and to permit the Commissioner to ascertain that there are no violations of Insurance Article, Title 27, Annotated Code of Maryland, and other applicable sections of Insurance Article, Annotated Code of Maryland, a contract of reinsurance of credit involuntary unemployment benefit insurance on loans originating in Maryland may not be entered into, or continued, after the effective date of this chapter unless approved by the Commissioner and unless the reinsurer is licensed in Maryland, qualifies under Insurance Article, §13-116, Annotated Code of Maryland, or is an accredited reinsurer.

C. If the Commissioner does not approve or disapprove the proposed or existing reinsurance treaty within 90 days after the date it is filed with the Commissioner, the treaty shall be deemed to be approved.

D. The Commissioner may withdraw approval of a reinsurance treaty after a hearing held not less than 20 days after written notice to the insurer and the reinsurer.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.17 Prohibited Transactions.

A. A person may not solicit, sell, or negotiate a group or individual policy of credit involuntary unemployment benefit insurance unless the person is licensed as an insurance producer in accordance with Insurance Article, Title 10, Subtitle 1, Annotated Code of Maryland.

B. Enroller.

(1) An enroller may not receive any form of commission, compensation, remuneration, or other benefit based on the enroller's activity in enrolling persons in group policies of credit involuntary unemployment benefit insurance.

(2) An enroller who is not also licensed as an insurance producer may not engage in soliciting, selling, or negotiating, or assist in soliciting, selling, or negotiating, an individual policy of credit involuntary unemployment benefit insurance.

C. Unfair Trade Practices.

(1) An insurer or insurance producer may not engage in any of the following practices in connection with the solicitation, sale, or negotiation of credit involuntary unemployment benefit insurance as an inducement to the sale of the insurance, and each of these practices is an unfair trade practice under Insurance Article, Title 27, Annotated Code of Maryland:

(a) Offering or granting to a creditor or to a person connected or affiliated with the creditor any special advantage or service not specified in the insurance contract;

(b) Agreeing to deposit with a bank or financial institution money or securities of the insurer or the insurance producer with the design or intent that the deposit reduce or take the place of a deposit of money or securities that otherwise would be required of the creditor or an affiliate of the creditor by the bank or financial institution as a compensating balance or offsetting deposit for a loan or other advance;

(c) Allowing the creditor to retain premiums on credit involuntary unemployment benefit insurance on policies issued to the creditor or on policies sold or collected by the creditor for more than 60 days after the due date of the premiums; or

(d) Depositing with the creditor or an affiliate of the creditor money or securities without interest or at a lesser rate of interest than is generally being paid by the creditor bank or financial institution to other depositors of like amounts.

(2) Section C(1)(d) of this regulation may not be construed to prohibit the maintenance by an insurer or insurance producer of demand deposits or premium deposit accounts that are reasonably necessary for use in the ordinary course of the insurer's or the insurance producer's business.

D. If advance loan payments are made before the date of involuntary unemployment of the debtor on a loan covered by single premium credit involuntary unemployment benefit insurance, or if the debtor, the beneficiary, or any other person makes payments on a loan after the date the debtor is first entitled to receive a benefit for involuntary unemployment, the insurer may not reduce the amount of payments that were scheduled to be paid under the provisions of the credit involuntary unemployment benefit insurance policy because of these loan payments.

E. Benefit Eligibility Requirements.

(1) Benefit eligibility requirements may not include a requirement that as of the date of loss of employment the insured debtor had been employed for a:

(a) Set number of hours per week; or

(b) Set period of time.

(2) The insurer may require only that the insured debtor had been employed and that separation from employment was the result of involuntary unemployment as defined in Regulation .04B(18) this chapter.

F. Credit involuntary unemployment benefit insurance may not be permitted in a package sold to any individual who is not eligible for coverage on the date of the application for coverage.

G. Reeligibility Conditions.

(1) A credit involuntary unemployment benefit insurance policy may impose conditions upon which an insured debtor becomes reeligible for credit unemployment benefits after a period of receiving benefits.

(2) If reeligibility conditions are required for full benefits for a subsequent period of unemployment, the conditions may not:

(a) Be more stringent than the initial eligibility conditions; and

(b) Require that the insured be actively at work for more than 30 consecutive days.

(3) If an insured debtor has not satisfied the reeligibility requirement at the time of a subsequent unemployment, the unemployment shall be considered a continuation of the prior unemployment with no waiting period, with the maximum benefit period equal to the unused portion of the maximum benefit period for the prior unemployment.

H. Return To Work.

(1) If a debtor was working full time on the date of involuntary unemployment and returns to work less than full time, the insurer shall consider the debtor to be involuntarily unemployed until the debtor returns to full-time employment.

(2) If a debtor was working less than full time on the date of involuntary unemployment and returns to work less than full time, the insurer may consider the debtor to be no longer involuntarily unemployed.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.18 Combinations of Coverages.

If an individual policy form or group policy form of credit involuntary unemployment benefit insurance or a certificate form of group credit involuntary unemployment benefit insurance is used to provide both single and joint coverage, the coverage in effect shall clearly and prominently be indicated in the schedule of benefits.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.19 Notice to Debtors.

A. Notice of Termination.

(1) If a debtor is covered by a group credit involuntary unemployment benefit insurance policy providing for payment of premiums to the insurer on a monthly premium basis, the policy shall provide that in the event of termination of the policy for any reason:

(a) The insured debtor shall be given written notice of termination; and

(b) Except if replacement of the coverage by the same or another insurer in the same or greater amount takes place without interruption of coverage and a new certificate reflecting the replacement coverage is delivered to the insured debtor, coverage will continue for at least 31 days from the date of notice.

(2) The notice of termination required by this section shall be given by the insurer unless the insurer is unable to identify the debtors, in which case it shall be given by the creditor.

(3) There shall be a prominent notice printed or stamped close to the schedule of benefits in the certificate form that the insurance coverage will terminate if the group policy terminates.

(4) An insurer also may include notice of additional events that would lead to termination of insurance coverage if the events are approved by the Commissioner.

B. Notice that Benefit May Not Cover Installments.

(1) If a credit involuntary unemployment benefit insurance policy is issued under which the monthly benefit might not cover payment of the entire scheduled monthly loan installment or the total benefit might not cover payment of all of the unpaid scheduled installments under the loan even if the loan account and the insurance premiums are paid on a current basis, then there shall be a notice to this effect in the individual policy or in certificates of insurance issued under a group policy.

(2) The notice under §B(1) of this regulation shall be prominently printed or stamped close to the schedule of benefits in the policy and in the certificate form.

C. Other Notices. A policy or certificate of credit involuntary benefit insurance shall include a notice printed in or close to the schedule of benefits that clearly calls attention to any of the following limitations or requirements that are applicable to the policy or certificate:

(1) Any evidence of insurability required for advances of credit;

(2) Any limit on the number of monthly benefit payments that the insurance will provide per occurrence of involuntary unemployment;

(3) Any limit on the number of monthly benefit payments that the insurance will provide over the term of the insurance;

(4) The right of the insured to cancel credit involuntary unemployment benefit coverage that has been issued without canceling any other coverage that has been issued covering the same debt;

(5) Any limit on the term of coverage;

(6) Any limit on the amount of any monthly benefit payment that the insurance will provide over the term of the insurance;

(7) Any limit on the aggregate of any monthly benefit payments that the insurance will provide over the term of the insurance; and

(8) Any requirement that the insured register with the Office of Unemployment Insurance or a recognized employment agency to be eligible for benefits.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.20 Benefits.

A. If a debtor has filed in accordance with the policy provisions a claim for benefits for which the insurer is liable under a credit involuntary unemployment benefit insurance policy, the insurer shall pay any late charges accruing on the amount payable under the claim after the date the claim has been filed.

B. For monthly premium credit involuntary unemployment benefit insurance:

(1) The amount of the monthly benefit payable on a revolving, open end, account shall be the greater of the minimum payment required by the creditor or 3 percent of the debt at the time of involuntary unemployment, subject to any policy maximum; and

(2) If involuntary unemployment occurs prior to the date of termination of the policy or prior to the date of termination of coverage of an insured debtor and if benefits would otherwise have been payable, benefits shall be paid as if coverage continued.

C. For single premium and nonrevolving, closed end, monthly outstanding balance credit involuntary unemployment benefit insurance, the amount of the monthly benefit payable shall be the scheduled payment required by the creditor, subject to any policy maximum.

D. For purposes of this chapter, a claim shall be deemed filed if it is transmitted to the creditor, the insurer, or an insurance producer of the insurer.

E. Amount Due in Excess of Amount Due to Creditor.

(1) An amount due under a credit involuntary unemployment benefit insurance policy in excess of the payment due at the time of involuntary unemployment shall be paid by the insurer directly to the debtor, the designated second beneficiary, or the estate of the debtor, whichever is entitled to the payment.

(2) If the insurer does not have the address of the person entitled to the excess amount, the insurer shall send a check payable to that person to the creditor for transmittal.

F. Claims shall be paid either by a check of the insurer, by a draft drawn upon the insurer, or by electronic transmission.

G. The creditor may not be authorized to settle or adjust claims or to act as a claim representative for the insurer.

H. Benefits for a covered period of unemployment less than a full month shall be paid at a rate of 1/30 of a full monthly benefit for each day of unemployment.

I. The benefit payable under a joint credit involuntary unemployment benefit insurance policy if only one debtor is receiving benefits may not be less than the benefit that would have been paid if both were eligible for benefits.

J. If a policy requires registration with the Office of Unemployment Insurance or a recognized employment agency within a stated time period in order to be eligible for benefits:

(1) The time period may not be less than 15 days; and

(2) If the debtor registers after the stated time period has expired, benefits otherwise payable may not be denied for periods of unemployment after the registration.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.21 Review of Credit Operations.

A. Review Required.

(1) Every insurer transacting credit involuntary unemployment benefit insurance business in Maryland shall conduct a review of each of its creditor accounts with respect to the credit involuntary unemployment benefit insurance business of the creditor to ensure compliance with the insurance laws and regulations of Maryland.

(2) Unless a satisfactory review has been made within 2 years before the effective date of this chapter, the first review shall be made not later than 15 months after the effective date of this chapter or of the date of the initial credit involuntary unemployment benefit insurance transaction between the creditor and the insurer, whichever is later.

(3) After review under §A(2) of this regulation, a review shall be made not later than 36 months after the last preceding review.

B. The review shall include but need not be limited to a determination that:

(1) The proper premium charges to debtors are made by the creditor and remitted in a timely manner to the insurer;

(2) The proper refunds are being accurately calculated and promptly made by the creditor;

(3) All claims are being filed promptly and properly handled;

(4) Amounts of insurance payable in excess of the amounts necessary to extinguish the indebtedness are properly calculated and reported to the insurer in proofs of loss; and

(5) The creditor is promptly and fairly processing complaints concerning its credit insurance operations and is maintaining proper procedures for, and records of, the complaints processed.

C. Insurers shall retain copies of the reviews in their home offices for at least 5 years.

D. An insurer may retain copies of the reviews in paper, photographic, microprocessed, magnetic, mechanical, electronic, digital, or any other medium if the copies of the reviews are maintained in a manner that:

(1) Is clear and legible;

(2) Accurately represents the original document in its entirety, including any attachment to the document;

(3) Is capable of producing a clean and legible hard copy of the original document; and

(4) Preserves evidence of any signature contained in the original document.

Cross References

31.13.03.04B(7)(c)(i)

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.22 Effective Date.

A. An individual policy, group policy, or group certificate of credit involuntary unemployment benefit insurance not in conformity with this chapter may not be issued or continued to be used in connection with any loan made on or after the effective date of this chapter.

B. A premium in excess of that permitted by these regulations may not be charged for credit involuntary unemployment benefit insurance, and a commission or other form of benefit may not be paid to insurance producers or creditors in excess of the premium and commission rates permitted under this chapter for credit involuntary unemployment benefit insurance which is issued in connection with any loan made on or after the effective date of this chapter.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.23 Clerical Errors.

A. Excess Insurance.

(1) If a policy of credit involuntary unemployment benefit insurance limits the involuntary unemployment benefits to stated policy maximums, the policy and certificates of insurance issued under a group policy shall provide that if the insured has been charged premiums for insurance in excess of the stated maximums, the insurer may terminate the excess insurance and refund all premiums paid by the debtor for the excess insurance.

(2) The notice of termination of the excess insurance shall state that the premium paid by the debtor for the excess coverage shall be refunded to the person entitled to it.

(3) A single premium credit involuntary unemployment benefit insurance policy and certificate shall further provide that excess insurance shall remain in force if the insurer does not terminate the excess insurance within 60 days after the effective date of coverage or if the debtor suffers a covered loss within the 60-day period but before notification by the insurer of termination of the excess coverage.

(4) A monthly premium credit involuntary unemployment benefit insurance policy and certificate shall further provide that the excess insurance shall be in force for the period for which a premium was charged unless the excess insurance is cancelled before the occurrence of a loss.

B. Ineligible Debtor.

(1) Misstatement of Age.

(a) If a policy of credit involuntary unemployment benefit insurance or certificate of credit involuntary unemployment benefit insurance issued under a group policy contains an age restriction, the policy or certificate may allow the insurer to terminate the coverage and refund all premiums paid by the debtor if:

(i) The debtor has misstated the debtor's age; and

(ii) The debtor's true age is greater than the limiting age stated in the policy.

(b) If a policy of credit involuntary unemployment benefit insurance or certificate of credit involuntary unemployment benefit insurance issued under a group policy contains an age restriction, the policy or certificate may not provide for an adjustment of premiums or benefits if:

(i) The debtor misstates the debtor's age; and

(ii) The debtor's true age is not greater than the limiting age stated in the policy or certificate.

(2) If a debtor's eligibility for credit involuntary unemployment benefit insurance is subject to restrictions based on employment or other factors, the policy and certificates of insurance issued under a group policy shall provide that if insurance is issued to an ineligible debtor who has truthfully answered all eligibility questions, the insurer may terminate the insurance and refund all premiums paid by the debtor.

(3) The notice of termination of the insurance shall state that the premium paid by the debtor shall be refunded to the person entitled to it.

(4) A single premium credit involuntary unemployment benefit insurance policy and certificate shall also provide that the insurance shall remain in force if the insurer does not terminate the coverage within 60 days after the effective date of coverage or if the debtor suffers a covered loss within the 60-day period but before notification by the insurer of termination of the insurance.

(5) A monthly premium credit involuntary unemployment benefit policy and certificate shall provide that the insurance shall be in force for the period for which a premium was charged unless the insurance is cancelled with not less than 31 days notice before the occurrence of a loss.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

COMAR 31.13.03.24 Change of Insurers Reporting Requirements Coverage and Rates.

A. Insurers That Cease to Offer Credit Involuntary Unemployment Benefit Insurance. Within 90 days after an insurer ceases to offer credit involuntary unemployment benefit insurance through a case, the insurer shall notify the Commissioner of:

(1) The name or code number of the creditor;

(2) Each coverage no longer offered;

(3) The date on which the coverage ceased to be offered; and

(4) The current approved premium rate applicable to each coverage no longer offered.

B. Insurers That Begin to Offer Credit Insurance.

(1) At the end of a calendar year in which an insurer has begun to offer credit involuntary unemployment benefit insurance for which premium rates have not yet been established by the case method but for which a prior insurer submitted notification of a new case required by Regulation .06B(2) and (3) of this chapter, the insurer shall:

(a) File the report for the case required by Regulation .06B(1) of this chapter; and

(b) Submit the insurer's experience and the experience of the prior insurer for the experience period even if the account did not qualify as a case for the most recent policy year.

(2) An insurer that is required to submit its experience and the experience of a prior insurer under §B(1) of this regulation shall submit the experience of each insurer:

(a) Separately by year; and

(b) As a total for a 2-year period.

(3) The Commissioner shall notify an insurer if a report for a case is required to be filed under §B(2) of this regulation.

(b) Insurer shall:

(i) Beginning not later than the effective date established by the Commissioner, use premium rates not greater than the new premium rates approved by the Commissioner; and

(ii) At the end of the experience period stated by the Commissioner, file the report for the case required by Regulation .06B(1) of this chapter, submitting the experience of the former insurer and the insurer's own experience for the term of the experience period in order to determine subsequent rates for the account.

(6) An insurer required to submit its experience and the experience of a former insurer under §B(5)(b)(ii) of this regulation shall submit the experience of each insurer:

(a) Separately by year; and

(b) As a total for a 2-year period.

(7) On the request of a succeeding insurer, a prior insurer promptly shall provide the succeeding insurer with any experience information of the prior insurer that the succeeding insurer needs to meet the requirements of this section.

History

Administrative History: Effective date: January 1, 2003 (29:12 Md. R. 934)
Administrative History: Regulation .04B amended effective November 7, 2016 (43:22 Md. R. 1223)
Administrative History: Regulation .16A amended effective November 7, 2016 (43:22 Md. R. 1223)
Authority: Insurance Article, §2-109 and Title 13, Annotated Code of Maryland

31.14.01 Long-Term Care Insurance

COMAR 31.14.01.01 Applicability and Scope.

Except as otherwise specifically provided, this chapter applies to all long-term care insurance policies delivered or issued for delivery in this State on or after the effective date by insurers, nonprofit health service plans, and health maintenance organizations. These regulations are not intended to supersede other applicable insurance laws or regulations which do not conflict with this chapter.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Activities of daily living” means at least bathing, continence, dressing, eating, toileting, and transferring.

(2) “Acute condition” means that the individual is medically unstable and requires frequent monitoring by physicians, registered nurses, or other medical professionals in order to maintain the individual's health status.

(3) “Adult day care” means a program providing social and health-related services, during the day, in a community group setting for the purpose of supporting frail, impaired, elderly, or other disabled adults who could benefit from care in a group setting outside the home.

(4) “Alzheimer's disease” means a progressive brain disease diagnosed as Alzheimer's disease by the licensed attending physician of the insured or certificate holder and confirmed by a second opinion of a licensed physician.

(5) “Applicant” means in the case of:

(a) An individual long-term care insurance policy or contract, the person who seeks to contract for benefits; and

(b) A group long-term care insurance policy, the proposed certificate holder.

(6) “Association” means any association described in Insurance Article, §15-302(c)(2), Annotated Code of Maryland.

(7) “Bathing” means washing oneself:

(a) By sponge bath; or

(b) In either a tub or shower, including the task of getting into or out of the tub or shower.

(8) “Certificate” means any certificate issued under a group long-term care insurance policy if the certificate is delivered or issued for delivery in the State and covers individuals who reside in the State.

(9) “Cognitive impairment” means a deficiency in an individual's short or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(10) “Continence” means the ability to:

(a) Maintain control of bowel and bladder function; or

(b) When unable to maintain control of bowel or bladder function, perform associated personal hygiene, including caring for catheter or colostomy bag.

(11) “Domiciliary care” means care, including general supervision and assistance in daily living, such as, but not limited to, aid in walking, getting in and out of bed, bathing, dressing, or eating, which is provided on a prearranged basis in a licensed residential facility for three or more unrelated individuals who need the care because of advanced age, infirmity, or physical or mental limitations.

(12) “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.

(13) “Eating” means feeding oneself by getting food into the body from a receptable, such as a plate, cup, or table, or by feeding tube or intravenously.

(14) “Employer group long-term care insurance” means a long-term care insurance policy that is:

(a) Issued or delivered in Maryland to:

(i) One or more employers or labor organizations; or

(ii) A trust or the trustees of a fund established by one or more employers or labor organizations, or by a combination of employers or labor organizations; and

(b) Designed for:

(i) Employees or former employees, or a combination of employees and former employees, of the employer or employers; or

(ii) Members or former members, or a combination of members and former members, of the labor organization or labor organizations.

(15) “Field issued” means a policy or certificate issued by an insurance producer or a third-party administrator:

(a) Pursuant to the underwriting authority granted to the insurance producer or third-party administrator by an insurer; and

(b) Using the insurer's underwriting guidelines.

(16) “Guaranteed renewable” means that the:

(a) Policyholder or certificate holder has the right to continue long-term care insurance in force during the lifetime of the covered person by the timely payment of premiums; and

(b) Insurer may not decline to renew the policy or unilaterally make any change in any provision of the policy while the policy is in force, except that the insurer may revise the premium rates on a class basis.

(17) “Hands-on assistance” means physical assistance, whether minimal, moderate, or maximal, without which the individual would not be able to perform the activity of daily living.

(18) Home Health Care Services.

(a) “Home health care services” means medical and nonmedical services provided to ill, disabled, or infirm persons in their residences.

(b) “Home health care services” includes:

(i) Assistance with activities of daily living;

(ii) Homemakers' services; and

(iii) Respite care services.

(19) “Insurance producer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.

(20) “Insurer” means an insurance company, nonprofit health service plan, health maintenance organization, or preferred provider organization.

(21) “Limited distribution channel” means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public.

(22) Long-Term Care Insurance.

(a) “Long-term care insurance” means any group or individual insurance policy, contract, certificate, or rider issued, delivered, or offered by an insurer that:

(i) Is advertised, marketed, offered, or designed to provide coverage for not less than 24 consecutive months for covered persons on an expense incurred, indemnity, prepaid, or insured basis; and

(ii) Provides one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services furnished in a situation other than an acute care unit of a hospital.

(b) Long-term care insurance includes any product that is advertised, marketed, or offered as long-term care insurance.

(c) “Long-term care insurance” does not include any insurance policy, contract, certificate, or rider which is offered primarily to provide:

(i) Basic Medicare supplement coverage;

(ii) Hospital confinement indemnity coverage;

(iii) Basic hospital expense or medical-surgical expense coverage;

(iv) Disability income protection coverage;

(v) Accident only coverage;

(vi) Specified disease or specified accident coverage; or

(vii) Skilled nursing care.

(d) “Long-term care insurance” does not include a life insurance policy:

(i) That accelerates the death benefit specifically for one or more of the qualifying events of terminal illness, a medical condition requiring extraordinary medical intervention, or permanent institutional confinement;

(ii) That provides a lump sum payment for any of the events in §B(22)(d)(i) of this regulation; or

(iii) In which neither benefits nor eligibility for benefits is conditioned on receipt of long-term care.

(e) “Long-term care insurance” does not include any certificate issued under an out-of-State employer group contract.

(23) “Medicaid” means the Maryland Medical Assistance Program or any similar program provided by the state in which the insured person resides.

(24) “Medicare” means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended.

(25) “Mental or nervous disorder” means a condition diagnosed as neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

(26) “Noncancellable policy” means a policy which the policyholder has the right to continue in force by the timely payment of premiums, and in which the insurer is precluded from unilaterally making any change in any provision of the policy or in the premium rates while the policy is in force.

(27) “Nursing care” means service for a patient that is ordered by a physician and provided or supervised by a registered or licensed practical nurse.

(28) “Nursing home” means a licensed organized institution that maintains conditions or facilities and equipment to provide domiciliary, personal, or nursing care for a number of unrelated individuals who are dependent on the administrator, operator, or proprietor for nursing care or the subsistence of daily living in a safe, sanitary, and healthy environment, and which admits or retains the individuals for overnight care.

(29) “Out-of-State employer group contract” means a group contract that is:

(a) Entered into with an employer in a state other than Maryland; and

(b) Issued directly to an employer under the laws of that employer's state.

(30) “Partnership policy” means a long-term care insurance policy that is:

(a) Certified by the Commissioner to meet the requirements under §1917(b) of the Social Security Act; and

(b) Issued on or after the date of the State plan amendment.

(31) “Partnership Program” means the program established by Health-General Article, Title 15, Subtitle 4, Annotated Code of Maryland.

(32) “Personal care” means the provision of hands-on services to assist an individual with the activities of daily living.

(33) Policy.

(a) “Policy” means any policy, contract, individual certificate, subscriber agreement, rider, or endorsement delivered or issued for delivery in this State by:

(i) An insurer;

(ii) A nonprofit health service plan;

(iii) A health maintenance organization; or

(iv) A preferred provider organization.

(b) “Policy” does not include a life insurance policy which contains an optional provision for acceleration of payment of all or a portion of the face amount under stated conditions relating to the medical condition, the disability, or the need for long-term care of the insured.

(34) “Preexisting condition” means a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 months before the effective date of coverage of the insured or certificate holder.

(35) “Qualified long-term care insurance” has the meaning stated in §C of this regulation.

(36) “Service benefit long-term care insurance policy” means a long-term care insurance policy that provides for benefits based on the amount of expenses incurred, rather than on an indemnity basis.

(37) “State of policy issue” means the state in which the individual policy or group certificate was originally issued.

(38) “State plan amendment” means an amendment filed by the Maryland Department of Health with the Centers for Medicare and Medicaid Services under Title 42, U.S.C., which provides for the disregard of any assets or resources by the Maryland Department of Health in an amount equal to the insurance payments that are made to or on behalf of the individual who is covered under a partnership policy.

(39) “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

(40) “Transferring” means moving into or out of a bed, chair, or wheelchair.

C. Qualified Long-Term Care Insurance.

(1) “Qualified long-term care insurance” means:

(a) An individual or group insurance contract that meets the requirements of §7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:

(i) The only insurance protection provided under the contract is coverage of qualified long-term care services;

(ii) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be reimbursable under Title XVIII of the Social Security Act but for the application of a deductible or coinsurance amount;

(iii) The contract is guaranteed renewable, within the meaning of §7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended;

(iv) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in §C(1)(a)(v) of this regulation;

(v) All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and

(vi) The contract meets the consumer protection provisions set forth in §7702B(g) of the Internal Revenue Code of 1986, as amended; and

(b) The portion of a life insurance contract that:

(i) Provides long-term care insurance coverage by rider or as part of the contract; and

(ii) Satisfies the requirements of §§7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.

(2) A contract may not fail to satisfy the requirements of §C(1)(a)(i) or (ii) of this regulation by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.

(3) The requirements of §C(1)(a)(ii) of this regulation do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor.

Cross References

31.09.16.03B(2)

31.14.01.03C

31.14.01.16D(1)

31.14.01.26B(1)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.03 Policy Terms.

A. A long-term care policy shall define “skilled nursing care”, “intermediate care”, “domiciliary care”, “custodial care”, “personal care”, “home care”, “specialized care”, “assisted living care”, and other services in relation to the level of skill required, the nature of the care, and the setting in which care shall be delivered.

B. Definitions in Contracts Regarding Providers of Services.

(1) A long-term care insurance policy shall define all providers of services, including, but not limited to, “skilled nursing facility”, “extended care facility”, “convalescent nursing home”, “personal care facility”, “specialized care providers”, “assisted living facility”, and “home care agency” in relation to the services and facilities required to be available and the licensure, certification, registration, or degree status of those providing or supervising the services.

(2) When the definition of a type of provider requires that the provider be appropriately licensed, certified, or registered, the definition shall also state what requirements a provider must meet instead of licensure, certification, or registration when the state in which the service is to be furnished:

(a) Does not require a provider of these services to be licensed, certified or registered; or

(b) Licenses, certifies, or registers the provider of services under another name.

C. A long-term care insurance policy may not use any of the terms defined in Regulation .02 of this chapter in a manner which is less favorable to the policyholder, the certificate holder, or the covered person.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.04 Policy Practices and Provisions.

A. Renewability and Premium Charges.

(1) Renewability Provision.

(a) Individual long-term care insurance policies shall contain an appropriately captioned renewability provision on the first page of the policy form.

(b) The renewability provision shall clearly state that the coverage is guaranteed renewable or noncancellable.

(c) Section A(1)(a) of this regulation is not applicable to policies that do not contain a renewability provision and under which the right to nonrenew is reserved solely to the policyholder.

(2) A long-term care insurance policy or certificate, other than one where the insurer does not have the right to change the premium, shall include a statement that premium rates may change.

(3) An individual long-term care policy may not be issued on any basis other than on a noncancellable or a guaranteed renewable basis.

(4) The premiums for a noncancellable policy shall be level for the duration of the policy and may not vary by policy duration or by the attained age of the insured.

(5) An insurer may not charge a renewal premium rate for a long-term care policy which exceeds by more than 15 percent any premium charged for the policy during the preceding 12 months.

(6) With the approval of the Commissioner, the insurer may charge a renewal premium exceeding a 15 percent increase upon a showing that a larger increase is necessary because of utilization of policy benefits greatly in excess of the expected rate.

(7) Premium Rate Increases.

(a) The premium charged to an insured may not increase due to either:

(i) The increasing age of the insured; or

(ii) The duration the insured has been covered under the policy.

(b) The purchase of additional coverage may not be considered a premium rate increase, but for purposes of the calculation required under Regulation .13 of this chapter, the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium.

(c) A reduction in benefits may not be considered a premium change, but for the purposes of the calculation required under Regulation .13 of this chapter, the initial annual premium shall be based on the reduced benefits.

(8) The term “level premium” may only be used when the insurer does not have the right to change the premium.

(9) In addition to the other requirements of this section, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of §7702(b)(1)(C) of the Internal Revenue Code of 1986, as amended.

B. Limitations and Exclusions.

(1) Long-term care insurance policies may not:

(a) Be cancelled, nonrenewed, or otherwise terminated on the grounds of the age or of the deterioration of the mental or physical health of the insured individual or certificate holder;

(b) Except with respect to an increase in benefits voluntarily selected by an insured individual or a group policyholder, contain a provision establishing a new waiting period if existing coverage is converted to or replaced by a new or other form of long-term care coverage in the same or another insurer;

(c) Limit coverage to skilled nursing care only, or provide an increased level of coverage in a facility for skilled care greater than the coverage for lower levels of care.

(2) A long-term care policy may not be delivered or issued for delivery in the State if the policy limits or excludes coverage by type of illness, treatment, medical condition, or accident, except as follows:

(a) Preexisting conditions or diseases to the extent permitted in §C of this regulation;

(b) Mental and nervous disorders, except that there may be no limitation or exclusion for Alzheimer's disease or senile dementia disorders;

(d) Illness, treatment, or medical conditions arising out of:

(i) War or act of war, whether declared or undeclared,

(ii) Participation in a felony, riot, or insurrection,

(iii) Service in the armed forces,

(iv) Attempted suicide or intentionally self-inflicted injury, whether sane or insane, or

(v) Aviation when the covered person is not a fare-paying passenger;

(e) Services provided by a member of the covered person's immediate family;

(f) Services provided or available under a workers' compensation, employer's liability, or occupational disease law;

(g) Treatment provided in a government facility, unless otherwise required by law;

(h) Services for which benefits are available under Medicare or other governmental programs, except Medicaid; or

(i) In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, or would be reimbursable under Title XVIII of the Social Security Act but for the application of a deductible or coinsurance amount.

(3) Section B(2) of this regulation does not prohibit limitations by territory.

(4) Section B(2) of this regulation does not prohibit exclusions and limitations by type of provider, but a long-term care insurer may not deny a claim because services are provided in a state other than the state of policy issue under the following conditions:

(a) When the state, other than the state of policy issue, does not have the provider licensing, certification, or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers instead of licensure, certification or registration; or

(b) When the state, other than the state of policy issue, licenses, certifies or registers the provider under another name.

C. Preexisting Condition.

(1) A long-term care insurance policy or certificate may not exclude coverage for a loss or confinement which results from a preexisting condition unless the loss or confinement begins within 6 months following the effective date of coverage of the covered person.

(2) The definition of “preexisting condition” does not prohibit an insurer from using an application form designed to elicit the health history of an applicant and, on the basis of the answers on the application, from underwriting the risk in accordance with the insurer's established underwriting standards.

(3) A preexisting condition, regardless of whether it is disclosed on an application form, may not be excluded beyond the 6-month waiting period, or the period provided in the policy, if shorter.

(4) A long-term care insurance policy or certificate may not exclude, or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting conditions beyond the 6-month waiting period.

D. A long-term care insurance policy may not be delivered or issued for delivery in the State if the policy conditions eligibility for benefits on:

(1) A requirement for earlier hospitalization; or

(2) The earlier receipt of a higher level of institutional care.

E. A long-term care insurance policy may provide for coordination of benefits with other long-term care coverage in force on the same covered person.

F. Termination.

(1) A long-term care insurance policy may be terminated by the insurer only:

(a) For nonpayment of premiums;

(b) Within the contestable period for material misrepresentation in the application; or

(2) An insurer may not terminate a long-term care insurance policy for nonpayment of premiums unless the insurer provides 30 days written notice to the:

(a) Covered person, and in the case of an individual policy, to the covered person and the policyowner if different; and

(b) Individual designated by the covered person or the policyholder to receive notice of termination.

G. Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-term care insurance was in force may be:

(1) Limited by the duration of the benefit period, if any, or by the payment of the maximum benefits under the policy; and

(2) Subject to any policy waiting period and all other applicable provisions of the policy.

H. Continuation or Conversion.

(1) Group long-term care insurance policies issued or delivered in this State shall provide covered individuals with the rights of continuation or conversion of coverage.

(2) Continuation of coverage may be provided by the right of the certificate holder to maintain coverage under the existing group policy subject only to the continued timely payment of premiums.

(3) A group policy that restricts benefits and services to certain providers or facilities under a managed care or preferred provider arrangement, or that contains incentives to use certain providers or facilities, may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. In determining whether the benefits of a converted policy are substantially equivalent to the original coverage, the Commissioner shall consider the difference between managed care and nonmanaged care plans.

(4) Conversion Policy.

(a) Written application for the conversion policy shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than 31 days after termination of coverage under the group policy.

(b) The conversion policy shall be issued effective on the day following the termination of coverage under the group policy and shall be renewable annually.

(5) Premium for Conversion Policies.

(a) Unless the group policy from which conversion is made replaced previous group coverage, the premium for an individual policy issued as a conversion from a group policy shall be calculated on the basis of the insured's age at inception of the coverage under the group policy from which conversion is made.

(b) If the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced.

(6) Continuation of coverage or issuance of a converted policy shall be mandatory, except if:

(a) Termination of group coverage results from an individual's failure to make any required payment of premium or contribution when due; or

(b) The terminating coverage is replaced not later than 31 days after termination, by group coverage effective on the day following the termination of coverage, if the:

(i) Benefits for the replacement group coverage are identical to, or determined by the Commissioner to be substantially equivalent to or in excess of, those provided by the terminating coverage; and

(ii) Premium for the replacement group coverage is calculated in a manner consistent with the requirements of §H(5) of this regulation.

(7) A converted policy, issued to an individual who at the time of conversion is covered by another long-term care insurance policy which provides benefits on the basis of incurred expenses, may contain a provision which results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100 percent of incurred expenses. If this provision is included in the converted policy, the policy shall also provide for a decrease in premiums or a partial refund reflecting the reduction in benefits payable.

(8) A converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the extension of benefits of the group policy from which conversion is made, do not exceed the benefits that would have been payable had the individual's coverage under the group policy remained in full force and effect.

(9) An insured individual whose eligibility for individual or group long-term care coverage is based upon the individual's relationship to another person is entitled to continuation of coverage under the individual or group policy upon termination of the qualifying relationship by death or dissolution of marriage or otherwise.

I. Discontinuance and Replacement. If a group long-term care policy is replaced by another group long-term care policy issued to the same policyholder within 12 months of the termination of the previous policy, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination and to all persons who could qualify for reinstatement under the previous policy. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy may not:

(1) Result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced; and

(2) Vary or otherwise depend on the individual's health or disability status, claim experience, or use of long-term care services.

J. Right to Return Policy.

(1) Except for an employer-employee group policy, a long-term care policy shall provide that the policyholder or certificate holder may return the policy or certificate to the insurer or agent within 30 days after receipt of the policy or certificate, and obtain a full refund of premium paid. A statement to this effect shall be printed in a prominent manner on the first page of the policy or certificate.

(2) The statement required under §J(1) of this regulation shall read as follows:

“NOTICE TO BUYER: YOU MAY SURRENDER THIS (POLICY) (CERTIFICATE) OF LONG-TERM CARE INSURANCE WITHOUT PENALTY OR OBLIGATION WITHIN 30 DAYS FROM THE DATE OF DELIVERY OF THE (POLICY) (CERTIFICATE). IF YOU DECIDE TO SURRENDER THIS (POLICY) (CERTIFICATE), YOU MUST PROVIDE NOTICE OF THE SURRENDER TO THE INSURER OR ITS AGENT. ANY ATTEMPT BY THE INSURER TO OBTAIN A WAIVER OF YOUR RIGHT TO SURRENDER IS UNLAWFUL. YOUR NOTICE OF SURRENDER WILL CAUSE THIS (POLICY) (CERTIFICATE) TO BE VOID AND WITHOUT BENEFIT FROM ITS BEGINNING. SURRENDER ENTITLES YOU TO A REFUND OF ALL MONIES WITHIN 30 BUSINESS DAYS AFTER RECEIPT BY THE INSURER OR ITS AGENT OF NOTICE OF SURRENDER.”

(3) This section does not apply to any “cafeteria plan” issued under §125 of the Internal Revenue Service Code.

K. Electronic Enrollment for Group Policies.

(1) In the case of employer group long-term care insurance, any requirement that a signature of an insured be obtained by an insurance producer or insurer shall be deemed satisfied if the:

(a) Consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer;

(b) Telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure the accuracy, retention, and prompt retrieval of records; and

(c) Telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure that the confidentiality of individually identifiable information is maintained.

(2) If the consent is obtained by telephonic or electronic enrollment as described in §K(1)(a) of this regulation, a verification of enrollment information shall be provided to the enrollee.

(3) The insurer shall make available, upon request of the Commissioner, records that demonstrate the insurer's ability to confirm enrollment and coverage amounts.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.05 Disclosure.

A. Riders and Endorsements.

(1) Except for riders or endorsements by which the insurer fulfills a request made in writing by the policyholder under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after the date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage of the policy shall require signed acceptance by the policyholder.

(2) After the date of policy issue, any rider or endorsement which increases benefits or coverage and which will require an increase in premium shall be agreed to in writing and signed by the insured, unless the increased benefits are required by law.

(3) When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the additional premium charge shall be set forth in the policy or in the rider or endorsement.

B. Payment of Benefits. A long-term care insurance policy which provides for the payment of benefits based on standards described as “usual and customary”, “reasonable and customary”, or words of similar import shall include a definition of these terms. The outline of coverage accompanying the policy shall include an explanation of these terms if used.

C. Preexisting Condition Limitations. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations shall appear in a separate paragraph of the policy or certificate under the heading “Preexisting Condition Limitations”.

D. Disclosure of Tax Consequences.

(1) This section is not applicable to qualified long-term care insurance contracts.

(2) If a life insurance policy or rider to a life insurance policy provides an accelerated death benefit for long-term care, a disclosure statement shall be provided by the insurer at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted.

(3) The disclosure statement required in §D(2) of this regulation shall state that:

(i) Receipt of the accelerated benefits may be taxable; and

(ii) Assistance should be sought from a personal tax advisor.

(4) The disclosure statement required in §D(2) of this regulation shall be prominently displayed on the first page of the policy or rider and any other related documents.

E. Benefit Triggers

(1) An insurer shall:

(a) Use activities of daily living and cognitive impairment to measure an insured's need for long-term care; and

(b) Describe in the policy or certificate in a separate provision the benefit triggers described in §E(1)(a) of this regulation.

(2) Additional Benefit Triggers.

(a) If the policy or certificate contains any additional benefit triggers other than described in §E(1) of this regulation, these triggers shall be described in the same provision described in §E(1)(b) of this regulation.

(b) If the additional benefit triggers differ for different benefits, explanation of the trigger shall accompany each benefit description.

(3) If the contract or certificate requires that an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this requirement shall appear in the provision described in §E(1)(b) of this regulation.

F. Each qualified long-term care insurance contract shall include a disclosure statement in the policy and in the outline of coverage that the policy is intended to be a qualified long-term care insurance contract under §7702B(b) of the Internal Revenue Code of 1986, as amended.

G. Each nonqualified long-term care insurance contract shall include a disclosure statement in the policy and the outline of coverage that the policy is not intended to be a qualified long-term care insurance contract.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.06 Requirements for Applications.

A. If the application for a long-term care insurance policy is to be made part of the policy or certificate, the insurer shall print:

(1) Conspicuously and in close conjunction with the applicant's signature block on the application form for the policy or certificate:

“CAUTION: If your answers on this application are incorrect or untrue, the insurance company may have the right to deny benefits or rescind your policy.”;

(2) On the first page of the policy or certificate the following or substantially similar language:

“CAUTION: The issuance of this long-term care insurance (policy) (certificate) is based upon your answers to the questions on your application. A copy of your application is (attached)(enclosed)(was retained by you when you applied). If your answers are incorrect or untrue, the insurance company may have the right to deny benefits or deny your coverage. The best time to clear up any questions is now, before a claim arises. If, for any reason, any of your answers are not correct, contact the insurance company at this address: (insert address and toll-free telephone number, if available).”

B. Application forms for individual policies and for certificate holders under group policies other than employer-employee groups shall include the questions in §C of this regulation, designed to elicit information as to whether at the time of the application the applicant has another long-term care insurance policy or certificate in force, or whether a long-term care policy or certificate is intended to replace any other long-term care policy or certificate or other insurance then in force. A supplementary application to be signed by the applicant may be used for this purpose.

C. Application questions include the following:

(1) “Do you have other long-term care insurance in force or other health insurance, including membership in a health maintenance organization?”;

(2) “Did you have another long-term care insurance policy or certificate in force during the last 12 months?”:

(a) “If so, with which company?”;

(b) “If that policy lapsed, when did it lapse?”;

(d) “Do you intend to replace any of your medical or health insurance coverage with this policy (certificate)?”.

D. An agent soliciting applications for long-term care insurance shall list any other long-term care coverage or other health insurance policies which the applicant has or has had. The agent shall list policies which:

(1) Are still in force;

(2) Have lapsed or otherwise terminated during the past 5 years.

E. Solicitations Other Than Direct Response. Upon determining that a sale will involve replacement, the agent or the insurer, other than an insurer using direct response solicitation, shall furnish the applicant a notice regarding replacement of long-term care coverage or other health insurance before delivering an individual long-term care insurance policy. A copy of the notice shall be given to the applicant, and another copy signed by the applicant shall be retained by the insurer. The required notice shall be substantially in the form and language shown in Regulation .22 of this chapter.

F. Direct Response Solicitation. Insurers using direct response solicitation shall deliver a notice regarding replacement of long-term care coverage or other health insurance to the applicant upon issuance of a long-term care policy. The required notice shall be substantially in the form and language shown in Regulation .23 of this chapter.

G. When replacement is intended, the replacing insurer shall give written notice to the existing insurer of the proposed replacement. This notice shall identify the insured and the policy number or the address of the insured. The notice shall be given within 5 working days from the date the application for the newly applied coverage is received at the home office of the insurer, or the date the policy is issued, whichever is earlier.

H. Before issuing a long-term care insurance policy or certificate to an applicant 80 years old or older, unless the policy or certificate is to be issued on a guaranteed issue basis, the insurer shall obtain at least one of the following:

(1) A report of a recent physical examination;

(2) An assessment by a qualified person of the applicant's functional capacity;

(3) An attending physician's statement; or

(4) A copy of recent medical records.

I. A copy of the completed application or enrollment form shall be delivered to the insured at the time of delivery of the policy or certificate.

J. Life Insurance Policies.

(1) Life insurance policies that accelerate death benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy.

(2) If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of COMAR 31.09.05.

(3) If a life insurance policy that accelerates the death benefits for long-term care is replaced by another life insurance policy that accelerates the death benefits for long-term care, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

Cross References

31.14.01.22

31.14.01.23

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.07 Person To Be Notified.

A. Except as provided in §E of this regulation, an insurer may not issue an individual long-term care insurance policy or certificate to an insured until the insurer has received from the applicant either a written:

(1) Designation of at least one person in addition to the insured who is to receive notice of termination of the policy or certificate for nonpayment of premium; or

(2) Waiver dated and signed by the applicant electing not to designate additional persons to receive notice of nonpayment of premium.

B. The written designation shall be on a form provided by the insurer and shall:

(1) Provide space clearly designated for listing at least one person; and

(2) Include a space for listing the full name and home address of the designated person.

C. If the applicant elects to waive the right to designate additional persons to receive notice of nonpayment of premium, the insurer shall use a waiver form that states: “Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice.”

D. An insurer shall notify the insured of the right to change the written designation described in §§A—C of this regulation, at least once every 2 years.

E. Payroll or Pension Deduction Plans.

(1) If the policyholder or certificate holder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the insurer is not required to satisfy the requirements contained in §§A — C of this regulation until 60 days after the policyholder or certificate holder is no longer on a payroll or pension deduction plan.

(2) The application or enrollment form for a long-term care insurance policy or certificate through a payroll or pension deduction plan shall clearly indicate the payment plan selected by the applicant.

F. Lapse or Termination for Nonpayment of Premium.

(1) Notice of Lapse.

(a) An individual long-term care policy or certificate may not lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, provides notice to the insured and to those persons designated under §§A and B of this regulation.

(b) The notice required by §F(1) of this regulation shall be provided by the insurer to the addresses provided by the insured for purposes of receiving notice of lapse or termination.

(2) The notice required in §F(1) of this regulation:

(a) Shall be given by first class United States mail, postage prepaid; and

(b) May not be given until 30 days after a premium is due and unpaid.

(3) The notice required in §F(1) of this regulation shall be deemed to be given as of 5 days after the date of mailing.

G. Reinstatement.

(1) A long-term care insurance policy or certificate shall include a provision that provides for reinstatement of coverage, in the event of lapse, if the insurer is provided proof that, before the grace period contained in the policy expired, the policyholder or certificate holder:

(a) Was cognitively impaired; or

(b) Had a loss of functional capacity.

(2) The reinstatement option described in §G(1) of this regulation shall be available to the insured if it is requested within 5 months after termination and shall allow for the collection of past due premium, if appropriate.

(3) The standard of proof of cognitive impairment or loss of functional capacity referenced in §G(1) of this regulation may not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate.

Cross References

31.14.01.36F

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.08 Applicant's Options.

A. Except as provided in §§B and C of this regulation, the application for a long-term care insurance policy or certificate, or a form attached to the policy or certificate, shall contain a statement to be signed separately by the applicant to the effect that the:

(1) Applicant has been informed of the applicant's right to:

(a) Designate a person to receive any notice of termination;

(b) Purchase:

(i) Inflation protection,

(ii) Home health care if not included in the policy, and

(iii) Nonforfeiture benefits; and

(2) Benefits and any costs of each of the options in this regulation have been fully explained to the applicant.

B. The statement of the applicant's right to purchase inflation protection specified in §A(1)(b)(i) of this regulation is not required when the policy is issued to an employer-employee group described in Regulation .12D of this chapter.

C. The statement of the applicant's right to purchase nonforfeiture benefits specified in §A(1)(b)(iii) of this regulation is not required when the policy is issued to a group described in Regulation .13B(1)(b) or (c) of this chapter.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.09 Prohibition Against Post-Claims Underwriting.

A. Except in a case of guaranteed issue, application forms for long-term care insurance policies or certificates shall contain clear and unambiguous questions designed to ascertain the condition of health of the applicant.

B. Medical Condition—Medication.

(1) If an application for long-term care insurance contains a question which asks whether the applicant has had medication prescribed by a physician, it shall also ask the applicant to name the medication which has been prescribed.

(2) A long-term care insurance policy or certificate may not be rescinded for failure by the applicant to list in the application for the policy or certificate a medical condition, if the medications listed in the application were known or should have been known by the insurer at the time of application to be directly related to a medical condition for which coverage would otherwise be denied.

C. An insurer issuing long-term care insurance shall maintain a record of all policy or certificate rescissions, both Statewide and countywide, except those which the policyholder voluntarily effectuated. The insurer shall annually furnish this information to the Insurance Commissioner in the format in Regulation .29 of this chapter.

Cross References

31.14.01.29

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.10 Preexisting Condition and Waiting Period Provisions in Replacement Policies.

If a long-term care insurance policy or certificate replaces other long-term care coverage, the replacing insurer shall waive any time periods applicable to preexisting conditions and probationary periods in the new long-term care policy or certificate for similar benefits to the extent that corresponding time periods have been satisfied under the original policy.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.11 Minimum Standards for Home Health Care Benefits in Long-Term Insurance Policies.

A. Optional Home Health Care Benefit.

(1) An insurer issuing a long-term care insurance policy shall offer the applicant for the policy the option to purchase a policy that provides for home health care benefits in addition to the benefits provided for nursing home care.

(2) The benefits required to be offered for home health care under this section are as follows:

(a) If the benefit for nursing home care is on a scheduled or indemnity-type basis, the daily limit for home health care benefits shall be at least 50 percent of the daily benefit for nursing home care;

(b) The period of eligibility for home health care benefits shall be at least equal to the period of eligibility for benefits for nursing home care; and

(c) If the policy provides for an overall lifetime limit, the benefits for home health care shall be at least equal to 50 percent of the overall lifetime limit.

(3) The minimum benefits required in §A(2) of this regulation do not apply to policies or certificates issued to residents of continuing care retirement communities.

B. If the offer required by §A of this regulation is rejected in writing by the applicant, then the insurer may offer a home health care rider providing benefits for a longer or shorter duration or for differing benefit levels.

C. A long-term care insurance policy or certificate may not limit benefits for home health care by:

(1) Requiring that the insured would need skilled nursing care or care in a hospital and skilled nursing facility if home health care services were not provided;

(2) Requiring that the insured first receive nursing care or therapeutic services, or both, in a community setting before home health care services are covered;

(3) Requiring that eligibility for services be limited to services provided by registered nurses or licensed practical nurses;

(4) Requiring that a nurse or licensed therapist provide services covered by the policy if the services can be provided by a home health aide or other home health care worker, unless required by applicable licensing regulations;

(5) Requiring that the insured have an acute condition before home health care services are covered;

(6) Limiting benefits to services provided by Medicare-certified agencies or providers;

(7) Excluding coverage for personal care services provided by a home health aide; or

(8) Requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service.

D. Home health care coverage may be applied to the nonhome health care benefits provided in the policy or certificate to determine maximum coverage under the terms of the policy or certificate.

E. An insurer soliciting the sale of a long-term care insurance policy shall offer the applicant the option of including the policy home health care benefits in accordance with the provision in §§A—D of this regulation.

F. A qualified long-term care insurance policy that provides benefits for home health care or community care services may not exclude coverage for adult day care services.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.12 Requirement To Offer Inflation Protection.

A. An insurer issuing a long-term care insurance policy shall offer the applicant for the policy the option to purchase a policy that provides for benefit levels to increase at a rate not less than 5 percent compounded annually.

B. Instead of the requirement of §A of this regulation, the insurer may offer a policy that guarantees the policyholder the right to increase periodically benefit levels without providing evidence of insurability of health status as long as the option for the preceding period has not been declined, with the amount of the additional benefit being not less than the difference between the existing policy benefit and the amount of the benefit which would have been payable if the policy provided the option described in §A of this regulation.

C. Instead of the requirement of §A of this regulation, the insurer may offer a policy that provides a specified percentage, not less than 50 percent, of actual and reasonable charges and does not include a maximum specified indemnity amount or limit.

D. In a policy issued to an employer-employee group, the offer required in §A, B, or C of this regulation shall be made to the group policyholder. In a policy issued to any other group, the offer shall be made to each proposed certificate holder.

E. The offer in §A of this regulation may not be required of life insurance policies or riders on life insurance policies containing accelerated death benefits for long-term care.

F. In connection with the offer to provide inflation protection, the insurer shall provide the applicant with:

(1) A graphic comparison and a table illustrating for at least the first 20 policy years the benefits or the reasonably anticipated benefits which would be available if the inflation protection is purchased, in comparison with a policy which does not provide inflation protection; and

(2) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

G. The initial premium for including the inflation protection provision in the policy shall be calculated on the basis of a level premium for the duration of the policy.

H. Inflation protection benefit increases under a policy that contains inflation protection benefits shall continue without regard to an insured's age, claim status, or claim history, or the length of time the individual has been insured under the policy.

I. Disclosure of Premium in Offer of Inflation Protection.

(1) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant.

(2) The offer described in §I(1) of this regulation shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

J. Rejection of Inflation Protection.

(1) Inflation protection as provided in §A of this regulation shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this section.

(2) The rejection described in §J(1) of this regulation may be either in the application or on a separate form.

(3) The rejection required by this section shall be considered a part of the application and shall state:

“I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans (insert names or descriptions of plans), and I reject inflation protection.”

Cross References

31.14.01.08B

31.14.03.05F(1)(b)

31.14.03.05F(3)

31.14.03.05F(4)

31.14.03.06B(4)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.13 Nonforfeiture Benefit Requirement.

A. This regulation does not apply to life insurance policies or riders containing accelerated death benefits for long-term care.

B. Required Option.

(1) An insurer may not deliver or issue a long-term care insurance policy in Maryland unless the option of purchasing a policy including a nonforfeiture benefit has been offered to the:

(a) Applicant, when the policy is an individual long-term care insurance policy;

(b) Group policyholder, when the policy is an employer group long-term care insurance policy;

(c) Group policyholder, when the policy is a group long-term care insurance policy issued to a professional, trade, or occupational association for its members, former members, or retired members, or a combination of members, former members or retired members, if the association:

(i) Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and

(ii) Has been maintained in good faith for purposes other than obtaining insurance; or

(d) Proposed certificate holder, when the group long-term care insurance policy is a policy other than one of the policies described in §B(1)(b)—(c) of this regulation.

(2) The offer of a nonforfeiture benefit required by §B(1) of this regulation may be in the form of a rider that is attached to the policy.

C. To comply with the requirement to offer a nonforfeiture benefit under §B of this regulation:

(1) A policy offered with nonforfeiture benefits shall have coverage elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be issued without nonforfeiture benefits;

(2) The nonforfeiture benefit included in the offer shall be the benefit described in §F of this regulation; and

(3) The offer shall be in writing if the nonforfeiture benefit is not otherwise described in the Outline of Coverage or other materials given to the applicant.

D. Options if Nonforfeiture Offer is Rejected.

(1) If the offer required to be made under §B(1) of this regulation is rejected, the insurer shall provide the contingent benefit upon lapse described in §E of this regulation.

(2) Even if the offer under §B(1) of this regulation is accepted, for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in §E(6) of this regulation shall still apply.

(3) The requirement of §D(2) of this regulation shall apply to:

(a) Except as provided in §D(3)(b) of this regulation, any long-term care insurance policy or certificate issued in Maryland on or after March 1, 2008; and

(b) Any certificate issued under an employer group long-term care insurance policy, if the certificate is issued on or after September 10, 2008.

E. Contingent Benefit Upon Lapse Provision.

(1) Except as provided in §E(6)(e) and (11) of this regulation, the requirements of this section become effective on April 1, 2003, and apply as follows:

(a) Except as provided in §E(1)(b) of this regulation, the provisions of this section apply to any long-term care insurance issued in this State on or after April 1, 2003; and

(b) The requirements of this section do not apply to certificates issued on or after April 1, 2003, under an employer group long-term care insurance policy which was in force before April 1, 2003.

(2) If the offer required to be made under §B(1) of this regulation is rejected, the insurer shall provide the contingent benefit upon lapse provided in this section.

(3) The contingent benefit on lapse shall be triggered each time:

(a) An insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in §E(5) of this regulation based on the insured's issue age; and

(b) The policy or certificate lapses within 120 days of the due date of the premium increase described in §E(3)(a) of this regulation.

(4) Unless otherwise required, policyholders shall be notified at least 30 days before the due date of the premium reflecting the rate increase described in §E(3)(a) of this regulation.

(5) The following table lists the triggers for a substantial premium increase:

| Triggers for a Substantial Premium Increase | | | --- | --- | | Issue Age | Percent Increase Over Initial Premium | | 29 and younger | 200% | | 30—34 | 190% | | 35—39 | 170% | | 40—44 | 150% | | 45—49 | 130% | | 50—54 | 110% | | 55—59 | 90% | | 60 | 70% | | 61 | 66% | | 62 | 62% | | 63 | 58% | | 64 | 54% | | 65 | 50% | | 66 | 48% | | 67 | 46% | | 68 | 44% | | 69 | 42% | | 70 | 40% | | 71 | 38% | | 72 | 36% | | 73 | 34% | | 74 | 32% | | 75 | 30% | | 76 | 28% | | 77 | 26% | | 78 | 24% | | 79 | 22% | | 80 | 20% | | 81 | 19% | | 82 | 18% | | 83 | 17% | | 84 | 16% | | 85 | 15% | | 86 | 14% | | 87 | 13% | | 88 | 12% | | 89 | 11% | | 90 and older | 10% |

(6) Policies With a Fixed or Limited Premium Paying Period.

(a) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time:

(i) An insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in §E(6)(c) of this regulation, based on the insured's age;

(ii) The policy or certificate lapses within 120 days of the due date of the premium that was increased as described in §E(6)(a)(i) of this regulation; and

(iii) The ratio in §E(9)(b) of this regulation is 40 percent or more.

(b) Unless otherwise required, policyholders shall be notified at least 30 days before the due date of the premium reflecting the rate increase.

(c) The following table lists the triggers for a substantial premium increase for a long-term care insurance policy with a fixed or limited premium paying period:

| Triggers for a Substantial Premium Increase | | | --- | --- | | Issue Age | Percent Increase Over Initial Premium | | Under 65 | 50% | | 65—80 | 30% | | Over 80 | 10% |

(d) The contingent benefit upon lapse described in §E(6) of this regulation shall be in addition to the contingent benefit provided by §E(3) of this regulation and where both contingent benefits are triggered, the benefit provided shall be at the option of the insured.

(e) The requirements found in §E(6) of this regulation shall apply to:

(i) Except as provided in §E(6)(e)(ii) of this regulation, any long-term care insurance policy or certificate issued in Maryland on or after March 1, 2008; and

(ii) Any certificate issued under an employer group long-term care insurance policy, if the certificate is issued on or after September 10, 2008.

(7) On or before the effective date of a substantial premium increase as described in §E(3) and (5) of this regulation, the insurer shall:

(a) Offer to reduce policy benefits provided by the current coverage consistent with the requirements of Regulation .36 of this chapter so that required premium payments are not increased;

(b) Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of §F of this regulation; and

(c) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period in §E(3)(b) of this regulation shall be deemed to be the election of the offer to convert in §E(7)(b) of this regulation, unless the automatic option in §E(9)(c) of this regulation applies.

(8) The conversion to a paid-up contract option in §E(7)(b) of this regulation may be elected at any time during the 120-day period in §E(3)(b) of this regulation.

(9) On or before the effective date of a substantial premium increase as described in §E(6)(a) and (c) of this regulation, the insurer shall:

(a) Offer to reduce policy benefits provided by the current coverage consistent with the requirements of Regulation .36 of this chapter so that required premium payments are not increased;

(b) Offer to convert the coverage to a paid-up status where the amount payable for each benefit is 90 percent of the amount payable in effect immediately before lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period; and

(c) Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period described in §E(6)(a)(ii) of this regulation shall be deemed to be the election of the offer to convert described in §E(9)(b) of this regulation, if the ratio is 40 percent or more.

(10) The option to convert coverage as described in §E(9)(b) of this regulation may be elected at any time during the 120-day period described in §E(6)(a)(ii) of this regulation.

(11) The requirements found in §E(9)—(10) of this regulation shall apply to:

(a) Except as provided in §E(11)(b) of this regulation, any long-term care insurance policy or certificate issued in Maryland on or after March 1, 2008; and

(b) Any certificate issued under an employer group long-term care insurance policy, if the certificate is issued on or after September 10, 2008.

(12) For any long-term care policy issued in Maryland on or after September 1, 2017:

(a) If the policy or certificate was issued at least 20 years before the effective date of the increase, a value of 0 percent shall be used in place of all values in the table in §E(6)(c) of this regulation; and

(b) Values above 100 percent in the table in §E(5) of this regulation shall be reduced to 100 percent.

F. Description of Nonforfeiture Benefits.

(1) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with §E(3) of this regulation, but not §E(6) of this regulation, are described in §F of this regulation.

(2) For purposes of this section, the nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse.

(3) The shortened benefit period nonforfeiture benefit required by §F(2) of this regulation shall:

(a) Have the same benefit amounts and frequency in effect at the time of lapse but not increased after the time of lapse; and

(b) Be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as described in §F(4) of this regulation.

(4) Calculation of the Nonforfeiture Credit.

(a) Except as provided in §F(4)(c) of this regulation, the standard nonforfeiture credit shall be equal to 100 percent of the sum of all premiums paid, including the premiums paid before any changes in benefits.

(b) The insurer may offer other shortened benefit period options in addition to the option described in §F(4)(a) of this regulation, provided the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration.

(d) The calculation of the nonforfeiture credit shall be subject to the limitation described in §G of this regulation.

(5) The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date.

(6) The contingent benefit upon lapse shall be effective during the first 3 years the policy is in force, as well as after the first 3 years the policy is in force.

(7) Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

G. An insurer may limit benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status so that the benefits will not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium paying status.

H. There shall be no difference in the minimum nonforfeiture benefits as required under this regulation for group and individual policies.

I. Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit upon lapse shall be subject to the loss ratio requirements of COMAR 31.14.02.05 or .06, whichever is applicable, treating the policy as a whole.

J. To determine whether contingent nonforfeiture upon lapse provisions are triggered under §E(3) or (6) of this regulation, a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

K. A nonforfeiture benefit for qualified long-term care insurance contracts shall be offered that meets the following requirements:

(1) The nonforfeiture provision shall be appropriately captioned;

(2) The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums; and

(3) The nonforfeiture provision shall provide at least one of the following:

(a) Reduced paid-up insurance;

(b) Extended term insurance;

(d) Other similar offerings approved by the Commissioner.

(4) The nonforfeiture benefit option provided by the insurer under this section shall comply with the requirements of §F of this regulation.

Cross References

31.14.01.04A(7)(b)

31.14.01.04A(7)(c)

31.14.01.16A(6)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.14 Group Coverage.

Group long-term care insurance coverage may not be offered to a resident of this State under a group policy issued in another jurisdiction unless the coverage complies with the statutes and regulations pertaining to group long-term care insurance issued in this State.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.15 Advertising.

A. An insurer soliciting long-term care insurance in the State shall provide the Commissioner with a copy of any long-term care insurance advertisement intended for use in the State. For purposes of this regulation, “advertising” includes any material:

(1) Published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication;

(2) In the form of a notice, circular, pamphlet, letter, or poster;

(3) Seen or heard over any radio or television station;

(4) Sent by direct mail; or

(5) Issued in any other manner intended to be seen or heard by the general public.

B. The insurer shall submit a copy of the advertising in advance to be received in the office of the Commissioner at least 30 days before its intended use.

C. The Commissioner may exempt an insurer's advertising form or material from the requirements of this regulation when, in the Commissioner's opinion, these requirements cannot be reasonably applied.

D. An insurer shall maintain in its home office a file of all long-term care advertisements for at least 3 years from the date the advertisements were first issued.

E. An insurer may not use the term “level premium” in a guaranteed renewable policy.

F. An insurer may not describe a policy which provides benefits for less than 24 months as a long-term care insurance policy.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.16 Standards for Marketing.

A. An insurer marketing long-term care insurance coverage in Maryland, either directly or through its producers, shall:

(1) Establish marketing procedures and insurance producer requirements to ensure that:

(a) Any comparison of policies by its producers is fair and accurate; and

(b) Excessive insurance is not sold or issued;

(2) Display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and of the policy, the following: “Notice to Buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.”;

(3) Provide copies of the disclosure forms required by COMAR 31.14.02.03, .08, and .09 to the applicant;

(4) Inquire, and otherwise make every reasonable effort to identify, whether a prospective applicant or enrollee for long-term care insurance already has long-term care insurance and the types and amounts of the existing insurance;

(5) Establish written procedures for verifying compliance with this regulation, with a record of the procedures implemented by the insurer being maintained in the home office of the insurer for at least 3 years following the procedures' introduction; and

(6) Provide an explanation of contingent benefit upon lapse provided for in Regulation .13E(3)—(5) of this chapter and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium periods provided for in Regulation .13E(6) of this chapter.

B. In soliciting long-term care coverage the insurer, at the time of solicitation, shall:

(1) Provide written notice to the prospective policyholders and certificate holders that senior insurance counselling programs are available in the State; and

(2) Give prospective applicants the name, address, and telephone number of an available counselling program.

C. Prohibited Practices.

(1) In addition to the practices prohibited in Insurance Article, Title 27 and §14-136, Annotated Code of Maryland, the acts and practices described in §C(2)—(4) of this regulation are prohibited.

(2) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer is prohibited.

(3) High Pressure Tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance is prohibited.

(4) Cold Lead Advertising. Making use, directly or indirectly, of any method of marketing which fails to disclose in a conspicuous manner that the purpose of the marketing is solicitation of insurance, and that contact will be made by an insurance agent or insurance company, is prohibited.

D. Associations.

(1) The primary responsibility of an association, as defined in Regulation .02B(6) of this chapter, when endorsing long-term care insurance, shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions.

(2) An association shall provide objective information regarding long-term care insurance policies or certificates endorsed by the association to ensure that members of the association receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed.

(3) An insurer intending to issue association long-term care coverage shall file with the Commissioner the following material:

(a) The policy and certificate;

(b) An outline of coverage that corresponds to the policy and certificate described in §D(3)(a) of this regulation; and

(4) The association shall disclose in any long-term care insurance solicitation:

(a) The specific nature and amount of the compensation arrangements that the association receives from endorsement or sale of the policy or certificate to its members; and

(b) A brief description of the process under which the policies and the insurer issuing the policies were selected.

(5) The compensation arrangements discussed in §D(4)(a) of this regulation include all fees, commissions, administrative fees, and other forms of financial support.

(6) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(7) The board of directors of associations endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(8) An association endorsing long-term care insurance to its members shall:

(a) Engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to:

(i) Conduct an examination of the policies, including their benefits, features, and rates at the time of the association's decision to endorse particular long-term care insurance; and

(ii) Update the examination described in §D(8)(a)(i) of this regulation in the event of material change in a policy's benefits, features, or rates;

(b) Actively monitor the marketing efforts of the insurer and its agents; and

(c) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

(9) The requirements set forth in §D(8) of this regulation do not apply to qualified long-term care insurance contracts.

(10) An insurer may not issue a group long-term care insurance policy or certificate to an association unless the insurer files with the Commissioner the information required in this section.

(11) The insurer may not issue a long-term care policy or certificate to an association or continue to market a long-term care policy or certificate to an association unless the insurer certifies annually that the association has complied with the requirements set forth in this section.

(12) Failure to comply with the filing and certification requirements of this section is an unfair trade practice in violation of Insurance Article, Title 27, Subtitle 2, Annotated Code of Maryland.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.17 Appropriateness of Recommended Purchase.

A. In recommending the purchase or replacement of any long-term care insurance policy or certificate, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

B. In recommending the purchase or replacement of any long-term care insurance policy or certificate, the insurer or its agent shall make a reasonable effort to identify whether a prospective applicant for long-term care insurance:

(1) Already has long-term care insurance, and the types and amounts of insurance;

(2) Had long-term care insurance in force during the last 12 months;

(3) Is covered or is eligible for coverage under the Medical Assistance Program (Medicaid); or

(4) Intends to replace an existing hospital, medical, surgical, or other health insurance coverage with long-term care insurance.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.18 Outline of Coverage.

A. An insurer or the agent soliciting long-term care coverage shall deliver to a prospective applicant, at the time of the initial solicitation, an outline of coverage in a manner which prominently directs the attention of the recipient to the document and its purpose.

B. Time of Delivery. In the case of:

(1) Solicitation by an agent, the agent shall deliver the outline of coverage before presenting an applicant or enrollment form to the prospective applicant;

(2) Direct response solicitations, the insurer shall deliver the outline of coverage in conjunction with any application or enrollment form.

C. The outline of coverage shall include:

(1) A description of the principal benefits and coverage provided under the policy or certificate;

(2) A statement of the principle exclusions, reductions, and limitations under the policy or certificate;

(3) A statement of the renewal provisions, including any reservation of the insurer's right to change the schedule of premiums;

(4) A statement of probable or expected premium increases, or additional premiums to pay for automatic or optional benefit increases, with these being presented in tabular form together with a graphic demonstration of the magnitude of potential premiums the applicant will need to pay from the effective date of the coverage up to age 75;

(5) A statement that the outline of coverage is a summary of the coverage applied for and that the individual policy or the group master policy should be consulted to determine the governing contractual provisions;

(6) A statement of the terms under which the policy or certificate may be returned for a refund of the premium;

(7) A brief description of the relationship of cost of care and benefits; and

(8) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under §7702B(b) of the Internal Revenue Code of 1986, as amended.

D. The format of the outline of coverage shall comply with the following:

(1) The outline of coverage shall be a free-standing document printed in at least 12-point or larger type;

(2) The outline of coverage may not contain any material of an advertising nature;

(3) Text which is capitalized or underscored in the standard format outline of coverage may be emphasized by other means which provide prominence equivalent to capitalization or underscoring;

(4) Use of the text and sequence of the standard format outline of coverage is mandatory, unless otherwise specifically indicated.

E. The insurer shall use the standard format and the required text of the outline of coverage shown in Regulation .21 of this chapter.

Cross References

31.14.01.21

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.19 Requirement To Deliver Buyer's Guide.

A. An insurer or agent shall deliver a long-term care insurance buyer's guide to prospective applicants of long-term care coverage in a format developed by the National Association of Insurance Commissioners or in a format approved by the Commissioner.

B. The insurer shall include in the buyer's guide information regarding the purchase of a long-term care insurance policy, including a reference of the right of the purchaser to return the policy for a refund during the first 30 days after the policy is delivered.

C. In the case of solicitation by an agent, the agent shall deliver the buyer's guide before presenting an application or enrollment form to the prospective applicant.

D. In the case of direct response solicitations, the insurer shall provide the buyer's guide to the applicant in conjunction with any application or enrollment form.

E. Life insurance policies or riders containing accelerated death benefits for long-term care are not required to furnish the long-term care insurance buyer's guide required by §A of this regulation, but shall furnish the policy summary required under Insurance Article, §18-108, Annotated Code of Maryland.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.20 Waivers.

The Commissioner may issue, upon written request and after an administrative hearing, an order to modify or suspend a specific provision or provisions of this chapter with respect to a specific long-term care insurance policy or certificate upon a written finding that:

A. The modification or suspension would be in the best interest of the insureds;

B. The purposes to be achieved could not be effectively or efficiently achieved without the modification or suspension; and

C. Either the:

(1) Modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care,

(2) Policy or certificate is to be issued to residents of a life-care or continuing-care retirement community or some other residential community for the elderly, and the modification or suspension is reasonably related to the special needs or nature of that community, or

(3) Modification or suspension is necessary to permit long-term care insurance to be sold as part of, or in conjunction with, another insurance product.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.21 Form of Outline of Coverage.

The format and the required text of the outline of coverage referred to in Regulation .18E of this chapter shall read as follows:

[COMPANY NAME]

[ADDRESS—CITY AND STATE]

[TELEPHONE NUMBER]

LONG-TERM CARE INSURANCE

OUTLINE OF COVERAGE

(Policy Number or Group Master Policy and Certificate Number)

[Except for policies or certificates which are guaranteed issue, the following caution statement, or language substantially similar, must appear as follows in the outline of coverage.]

CAUTION: The issuance of this long-term care insurance[policy][certificate] is based upon your responses to the questions on your application. A copy of your [application][enrollment form][is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company may have the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address:[insert address]

This policy is [an individual policy of insurance] [a group policy] which was issued in the [indicate jurisdiction in which group policy was issued].
PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!
FEDERAL TAX CONSEQUENCES. This [policy][certificate] is intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

Federal Tax Implications of this [policy] [certificate] This [policy] [certificate] is not intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended. Benefits received under the [policy] [certificate] may be taxable as income.

TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.

(a) [For long-term care health insurance policies or certificates, describe one of the following permissible policy renewability provision.]

(i) [Policies and certificates that are guaranteed renewable shall contain the following statement:] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS GUARANTEED RENEWABLE. (This means you have the right, subject to the terms of your [policy] [certificate] to continue this policy as long as you pay your premiums on time.) [Company name] cannot change any terms of your policy on its own except that in the future [the company] it may increase the premium you pay.

(ii) [Policies and certificates that are noncancellable shall contain the following statement:] RENEWABILITY: THIS (POLICY) (CERTIFICATE) IS NONCANCELLABLE. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time.[Company name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, the company may increase your premium at that time for those additional benefits.

(b) For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy;

TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.[In bold type larger than the maximum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium, and if a right exists, describe clearly and concisely each circumstance under which the premium may change.]
TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.

(a) [Provide a brief description of the right to return—“free look” provision of the policy.]

(b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.]

THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from the insurance company.

(a) [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government.

(b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.

LONG-TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, as in a nursing home, in the community or in the home. This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy (limitations) (waiting periods) and (coinsurance) requirements.

[Modify this paragraph if the policy is a service benefit long-term care insurance rather than an indemnity policy.]

BENEFITS PROVIDED BY THIS POLICY.

(a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.]

(b) [Institutional benefits, by skill level.]

(d) Eligibility for Payment of Benefits.

[Activities of daily living and cognitive impairment shall be used to measure an insured's need for long-term care and must be defined and described as part of the outline of coverage.]

[Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified.]

LIMITATIONS AND EXCLUSIONS.[Describe:

(a) Preexisting conditions;

(b) Noneligible facilities/providers;

(d) Exclusions/exceptions;

(e) Limitations.][This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in 9. above.] THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS.

RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted.[As applicable, indicate the following:]

(a) [That the benefit level will not increase over time;]

(b) [Any automatic benefit adjustment provisions;]

(c) [Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage;]

(d) [If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations;]

(e) [Describe whether there will be any additional premium charge imposed, and how that is to be calculated.]

ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.[State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer's disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.]
PREMIUM.

[(a) State the total annual premium for the policy;

(b) If the premium varies with an applicant's choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.]

ADDITIONAL FEATURES.

[(a) Indicate if medical underwriting is used;

(b) Describe other important features.]

CONTACT THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR CERTIFICATE.

Cross References

31.14.01.18E

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.22 Replacement Notice.

The notice to an applicant regarding replacement of individual long-term care policies or other health insurance referred to in Regulation .06E of this chapter shall read as follows:

NOTICE TO APPLICANT REGARDING REPLACEMENT

OF INDIVIDUAL LONG-TERM CARE OR HEALTH INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE!

IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing long-term care or health insurance and replace it with an individual long-term care insurance policy to be issued by [company name] Insurance Company. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all long-term care or health insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision.

STATEMENT TO APPLICANT BY AGENT [BROKER OR OTHER REPRESENTATIVE]: (Use additional sheets, as necessary.)

I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention:

Health conditions which you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
The law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. The insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent of time elapsed under the original policy or certificate.
If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand everything that is involved in replacing your present coverage.
If, after you have thought about it, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information in an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded.

(Signature of Agent, Broker or Other Representative)

(Typed Name and Address of Agent or Broker)

The above Notice to Applicant was delivered to me on: __________________________________________________________

(Date)

(Applicant's Signature)

Cross References

31.14.01.06E

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.23 Replacement Notice for Direct Response Business.

The notice to an applicant with respect to direct response solicitation of individual long-term care policies or other health insurance referred to in Regulation .06F of this chapter shall read as follows:

NOTICE TO APPLICANT REGARDING REPLACEMENT

OF LONG-TERM CARE OR HEALTH INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE!

IT MAY BE IMPORTANT TO YOU IN THE FUTURE

According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing long-term care or health insurance and replace it with the long-term care insurance policy issued by [company name] Insurance Company and delivered with this notice. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all long-term care and health insurance coverage you now have, and terminate your present policy only if, after you have thought about it, you find that purchase of this long-term care coverage is a wise decision.

Health conditions which you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
The law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. Your new insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent of time elapsed under the original policy or certificate.
If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand everything that is involved in replacing your present coverage.
If, after due consideration and more thought to the matter, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application delivered with this notice and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to [company name and address] within thirty (30) days if any information is not correct and complete, or if any relevant matters and particularly any past medical history have been left out of the application.

(Company Name)

Cross References

31.14.01.06F

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.24 Reporting Requirements.

A. Every insurer shall maintain records for each insurance producer of the:

(1) Insurance producer's amount of replacement sales as a percent of the insurance producer's total annual sales; and

(2) Amount of lapses of long-term care insurance policies sold by the insurance producer as a percent of the insurance producer's total annual sales.

B. Each insurer shall report annually by June 30 the 10 percent of its insurance producers with the greatest percentages of lapses and replacements as measured by §A of this regulation.

C. Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing.

D. The reports required under §§C, E, and F of this regulation are for the purpose of reviewing more closely insurance producer activities regarding the sale of long-term care insurance.

E. Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year.

F. Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year.

G. Qualified Long-Term Care Contracts.

(1) Every insurer shall report annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied.

(2) The report required in §G(1) of this regulation shall be in the format specified in Regulation .32 of this chapter.

H. Annual Rate Certification Requirements for Rate Schedules Currently Marketed.

(1) This section applies to any long-term care policy issued in Maryland on or after September 1, 2017 that is currently marketed.

(2) An insurer shall submit an annual actuarial certification to the Commissioner in accordance with the following conditions:

(a) The certification shall be prepared, dated, and signed by a member of the American Academy of Actuaries;

(b) The certification shall contain one of the following conclusions:

(i) The premium rate schedule continues to be sufficient to cover anticipated costs under moderately adverse experience, and is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated; or

(ii) Margins for moderately adverse experience may no longer be sufficient;

(d) The certification shall be submitted annually not later than May 1 of each year starting in the second year following the year in which the initial rate schedules are first used;

(e) The certification shall contain a description of the review performed that led to the applicable conclusion in §H(2)(b) of this regulation; and

(f) If the certification contains the conclusion set forth in §H(2)(b)(ii) of this regulation, the insurer shall provide to the Commissioner a plan of action subject to the following conditions:

(i) The plan shall be submitted within 60 days of the date the actuarial certification is submitted; and

(ii) The plan shall include a time frame for the reestablishment of adequate margins for moderately adverse experience such that the ultimate premium rate schedule would be reasonably expected to be sustainable over the future life of the form with no future premium increases anticipated.

(3) Failure to comply with §H(2)(f) of this regulation constitutes grounds for the Commissioner to withdraw or modify approval of a form for future sales under Insurance Article, §12-205, Annotated Code of Maryland.

I. Annual Rate Certification Requirements for Rate Schedules That are No Longer Marketed.

(1) This section applies to any long-term care policy issued in Maryland on or after September 1, 2017 that is no longer marketed.

(2) An insurer shall submit an annual actuarial certification to the Commissioner in accordance with the following conditions:

(a) The certification shall be prepared, dated, and signed by a member of the American Academy of Actuaries;

(b) The certification shall contain one of the following conclusions:

(i) The premium rate schedule continues to be sufficient to cover anticipated costs under best estimate assumptions; or

(ii) The premium rate schedule may no longer be sufficient;

(d) The certification shall be submitted annually not later than May 1 of each year starting in the second year following the year in which the initial rate schedules are first used;

(e) The certification shall contain a description of the review performed that led to the applicable certification or statement in §I(2)(b) of this regulation.

(f) If the certification contains the conclusion set forth in §I(2)(b)(ii) if this regulation, the insurer shall provide to the Commissioner a plan of action subject to the following conditions:

(i) The plan shall be submitted within 60 days of the date the actuarial certification is submitted; and

(ii) The plan shall include a time frame for the reestablishment of adequate margins for moderately adverse experience.

J. Actuarial Memorandum.

(1) An actuarial memorandum to support the actuarial certifications required by §§H and I of this regulation shall be submitted as follows:

(a) The actuarial memorandum shall be dated and signed by the member of the American Academy of Actuaries who prepares the actuarial certification;

(b) The actuarial memorandum shall be submitted at least once every 3 years with the certification;

(i) A detailed explanation of the data sources and review performed by the actuary before drawing the appropriate conclusion in §H(2)(b) or I(2)(b) of this regulation;

(ii) A complete description of experience assumptions and their relationship to the initial pricing assumptions;

(iii) A description of the credibility of the experience data; and

(iv) An explanation of the analysis and testing performed in determining the current presence of margins.

Cross References

31.14.01.32

31.14.01.35H(2)(b)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.25 Suitability.

A. This regulation does not apply to life insurance policies that accelerate the death benefits for long-term care.

B. Each insurer shall:

(1) Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;

(2) Train its insurance producers in the use of its suitability standards; and

(3) Maintain a copy of its suitability standards and make them available for inspection upon request by the Commissioner.

C. Procedures.

(1) To determine whether the applicant meets the standards developed by the insurer, the insurance producer and insurer shall develop procedures that take the following into consideration:

(a) The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;

(b) The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and

(c) The values, benefits, and costs of the applicant's existing insurance, if any, compared to the values, benefits, and costs of the recommended purchase or replacement.

(2) Collection of Information from Applicant.

(a) The insurer, and if an insurance producer is involved, the insurance producer shall make reasonable efforts to obtain the information described in §C(1) of this regulation.

(b) The efforts to obtain the information described in §C(1) of this regulation shall include presentation to the applicant, at or prior to application, the “Long-Term Care Insurance Personal Worksheet”.

(c) The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in COMAR 31.14.02.08, in not less than 12-point type.

(d) The insurer may request the applicant to provide additional information to comply with its suitability standards.

(e) A copy of the insurer's personal worksheet shall be filed with the Commissioner.

(3) A completed personal worksheet shall be returned to the insurer prior to the insurer's consideration of the applicant for coverage, except the personal worksheet is not required to be returned for sales of employer group long-term care insurance to employees and their spouses.

(4) An insurer or insurance producer may not sell or disseminate outside the company or agency any information obtained through the personal worksheet set forth in COMAR 31.14.02.08.

D. The insurer shall use the suitability standards it has developed under this regulation in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

E. Insurance producers shall use the suitability standards developed by the insurer in marketing long-term care insurance.

F. Disclosure Form.

(1) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long-Term Care Insurance” shall be provided.

(2) The form described in §F(1) of this regulation shall be in the format contained in Regulation .30 of this chapter, in not less than 12-point type.

G. Procedure to Follow if Applicant Does Not Meet Suitability Standards.

(1) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application.

(2) As an alternative to rejecting the application as described in §G(1) of this regulation, the insurer shall send the applicant a letter similar to that found in Regulation .31 of this chapter.

(3) If the applicant has declined to provide financial information, the insurer may use some other method than the method described in this regulation to verify the applicant's intent.

(4) The insurer shall make either the applicant's returned letter or a record of the alternative method of verification a part of the applicant's file.

H. The insurer shall report annually by March 31 to the Commissioner the:

(1) Total number of applications received from residents of this State;

(2) Number of those who declined to provide information on the personal worksheet;

(3) Number of applicants who did not meet the suitability standards; and

(4) Number of those who chose to confirm after receiving a suitability letter.

Cross References

31.14.01.30

31.14.01.31

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.26 Standards for Benefit Triggers.

A. Conditions for Payment of Benefits.

(1) A long-term care insurance policy shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment.

(2) An insurer may not establish the eligibility criteria for the payment of benefits on a more restrictive basis than:

(a) A deficiency in the ability to perform not more than three of the activities of daily living; or

(b) The presence of cognitive impairment.

B. Activities of Daily Living.

(1) Activities of daily living shall include at least the following as defined in Regulation .02 of this chapter and in the policy:

(a) Bathing;

(b) Continence;

(d) Eating;

(e) Toileting; and

(f) Transferring.

(2) Insurers may use activities of daily living in addition to those contained in §B(1) of this regulation to trigger covered benefits as long as they are defined in the policy.

C. Additional Provisions for Benefit Determination.

(1) An insurer may use provisions in addition to those described in §§A and B of this regulation for the determination of when benefits are payable under a policy or certificate.

(2) The provisions permitted by §C(1) of this regulation may not restrict, and are not in place of, the requirements contained in §§A and B of this regulation.

D. For purposes of this regulation, the determination of a deficiency may not be more restrictive than:

(1) Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or

(2) If the deficiency is due to the presence of a cognitive impairment, supervision or verbal cuing by another person is needed in order to protect the insured or others.

E. Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses, or social workers.

F. Long-term care insurance policies shall include a clear description of the process for appealing and resolving benefit determinations.

G. The requirements set forth in this regulation are effective April 1, 2003, and apply as follows:

(1) Except as provided in §G(2) of this regulation, the provisions of this regulation apply to a long-term care policy issued in Maryland on or after April 1, 2003; and

(2) The provisions of this regulation do not apply to certificates issued on or after April 1, 2003, if the certificates are issued under an employer group long-term care insurance policy that was in force before April 1, 2003.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.27 Additional Standards for Benefit Triggers for Qualified Long-Term Care Insurance Contracts.

A. In this regulation, the following terms have the meanings indicated.

B. Terms Defined.

(1) Chronically Ill Individual.

(a) “Chronically ill individual” means any individual who has been certified by a licensed health care practitioner as:

(i) Being unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or

(ii) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

(b) “Chronically ill individual” does not include an individual otherwise meeting the requirements in §B(1)(a) of this regulation unless within the preceding 12-month period a licensed health care practitioner has certified that the individual meets the requirements of §B(1)(a) of this regulation.

(2) “Licensed health care practitioner” means a physician, as defined in §1861(r)(1) of the Social Security Act, a registered professional nurse, a licensed social worker, or other individual who meets requirements prescribed by the United States Secretary of the Treasury.

(3) Maintenance or Personal Care Services.

(a) “Maintenance or personal care services” means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual.

(b) “Maintenance or personal care services” includes care that provides protection from threats to health and safety due to severe cognitive impairment.

(4) Qualified Long-Term Care Services.

(a) “Qualified long-term care services” means services that meet the requirements of §7702(c)(1) of the Internal Revenue Code of 1986, as amended.

(b) “Qualified long-term care services” includes the following necessary services that are required by a chronically ill individual, and are provided under a plan of care prescribed by a licensed health care practitioner:

(i) Diagnostic services;

(ii) Preventive services;

(iii) Therapeutic services,

(iv) Curative services;

(v) Treatment services;

(vi) Mitigation services;

(vii) Rehabilitative services; and

(viii) Maintenance or personal care services.

C. A qualified long-term care insurance contract shall pay only for qualified long-term care services received by a chronically ill individual provided under a plan of care prescribed by a licensed health care practitioner.

D. A qualified long-term care insurance contract shall condition the payment of benefits on a determination of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.

E. Certifications regarding activities of daily living and cognitive impairment required under §D of this regulation shall be performed by the following licensed or certified professionals:

(1) Physicians;

(2) Registered professional nurses;

(3) Licensed social workers; or

(4) Other individuals who meet requirements prescribed by the United States Secretary of the Treasury.

F. Permissible Frequency of Certifications.

(1) Certifications required under §D of this regulation may be performed by a licensed health care professional at the direction of the carrier as is reasonably necessary with respect to a specific claim, except as described in §F(2) of this regulation.

(2) If a licensed health care practitioner has certified that the insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and if the insured is in claim status, an insurer may not rescind a certification or require that additional certifications be performed until the 90-day period under §F(1) of this regulation expires.

G. Qualified long-term care insurance contracts shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.28 Penalties.

In addition to any other penalties provided by the laws of this State, any insurer and any insurance producer found to have violated any requirement of this State relating to the regulation of long-term care insurance or the marketing of long-term care insurance shall be subject to a penalty of up to three times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.29 Rescission.

Reporting Form for Long-Term Care Policies. The following form is to be used for reporting rescissions made by each insurer as required by Regulation .09C of this chapter:

RESCISSION REPORTING FORM FOR LONG-TERM CARE POLICIES FOR THE STATE OF FOR THE REPORTING YEAR 20[ ]

Company Name: _____________________

Address: _________________

Phone Number: _____________________

Due: March 1 annually

Instructions:

The purpose of this form is to report all rescissions of long-term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.

| Policy Form# | Policy and Certificate # | Name of Insured | Date of Policy Issuance | Date/s Claim/s Submitted | Date of Rescission | | --- | --- | --- | --- | --- | --- | | | | | | | |

| Detailed reason for rescission: _______________________________ | | --- | | ______________________________________________________ | | ___________________________ Signature | | ___________________________ Name and Title (please type) | | ___________________________ Date |

Cross References

31.14.01.09C

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.30 Things You Should Know Before You Buy Long-Term Care Insurance.

The following form is to be used for providing the disclosure required by Regulation .25F of this chapter:

Things You Should Know Before You Buy Long-Term Care Insurance

| Long-Term Care Insurance | • A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it. | | --- | --- | | | • [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.] | | Drafting Note: For single premium policies, delete bracketed bullet above; for noncancellable policies, delete the second sentence only. | | | | • The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs. | | Medicare | • Medicare does not pay for most long-term care. | | Medicaid | • Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid. | | | • Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services. | | | • When Medicaid pays your spouse's nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets. | | | • Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency. | | Shopper's Guide | • Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners' “Shopper's Guide to Long-Term Care Insurance.” Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy. | | Counseling | • Free counseling and additional information about long-term care insurance are available through your state's insurance counseling program. Contact your state insurance department or department on aging for more information about the senior health insurance counseling program in your state. | | Facilities | • Some long term care insurance contracts provide for benefit payments in certain facilities only if they are licensed or certified, such as in assisted living centers. However, not all states regulate these facilities in the same way. Also, many people move to a different state from where they purchased their long term care insurance policy. Read the policy carefully to determine what types of facilities qualify for benefit payments, and to determine that payment for a covered service will be made if you move to a state that has a different licensing scheme for facilities than the one in which you purchased the policy. |

Cross References

31.14.01.25F(2)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.31 Long-Term Care Insurance Suitability Letter.

The following form is to be used for providing the disclosure required by Regulation .25G of this chapter:

Long-Term Care Insurance Suitability Letter

Dear [Applicant]:

Your recent application for long-term care insurance included a “personal worksheet,” which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, State law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage.

[Your answers indicate that long-term care insurance may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet “Shopper's Guide to Long-Term Care Insurance” and the page titled “Things You Should Know Before Buying Long-Term Care Insurance.” Your state insurance department also has information about long-term care insurance and may be able to refer you to a counselor free of charge who can help you decide whether to buy this policy.]

[You chose not to provide any financial information for us to review.]

Drafting Note: Choose the paragraph that applies.

We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical standards.

If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have any coverage until we hear back from you, approve your application and issue you a policy.

Please check one box and return in the enclosed envelope.

[] Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application.

income.

[] No. I have decided not to buy a policy at this time.

| ___________________________________ APPLICANT'S SIGNATURE | _____________________ DATE | | --- | --- |

Please return to [issuer] at [address] by [date].

Cross References

31.14.01.25G(2)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.32 Claims Denial Reporting Form.

The following form is to be used for reporting claim denials made by each insurer as required by Regulation .24G of this chapter:

For the State of

| Company Name: __________________________ Due: June 30 annually | | --- | | Company Address: _________________________________________ | | Company NAIC Number: ____________________________________ | | Contact Person: _________________ Phone Number: ______________ | | Line of Business: _____________ Individual ________ Group |

Instructions

The purpose of this form is to report all long-term care claim denials under in force long-term care insurance policies. “Denied” means a claim that is not paid for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition.

| | | State Data | Nationwide Data¹ | | --- | --- | --- | --- | | 1 | Total Number of Long-Term Care Claims Reported | | | | 2 | Total Number of Long-Term Care Claims Denied/Not Paid | | | | 3 | Number of Claims Not Paid due to Preexisting Condition Exclusion | | | | 4 | Number of Claims Not Paid due to Waiting (Elimination) Period Not Met | | | | 5 | Net Number of Long-Term Care Claims Denied for Reporting Purposes (Line 2 Minus Line 3 Minus Line 4) | | | | 6 | Percentage of Long-Term Care Claims Denied of Those Reported (Line 5 Divided By Line 1) | | | | 7 | Number of Long-Term Care Claim Denied due to: | | | | 8 | • Long-Term Care Services Not Covered under the Policy² | | | | 9 | • Provider/Facility Not Qualified under the Policy³ | | | | 10 | • Benefit Eligibility Criteria Not Met⁴ | | | | 11 | • Other | | |

1 The nationwide data may be viewed as a more representative and credible indicator where the data for claims reported and denied for your state are small in number.

2 Example — home health care claim filed under a nursing home only policy.

3 Example — a facility that does not meet the minimum level of care requirements or the licensing requirements as outlined in the policy.

4 Examples — a benefit trigger not met, certification by a licensed health care practitioner not provided, no plan of care.

Cross References

31.14.01.24G(2)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.33 Incontestability Period.

A. Except as provided in §G of this regulation, §§B—F of this regulation apply to each qualified long-term care insurance policy.

B. Policies In Force Less Than 6 Months.

(1) This section applies to a long-term care insurance policy that has been in force for less than 6 months.

(2) Unless the insurer demonstrates that the applicant misrepresented information on the application for the long-term insurance policy that is material to the acceptance for coverage, an insurer may not:

(a) Rescind the policy described in §B(1) of this regulation; or

(b) Deny an otherwise valid long-term care insurance claim under the policy described in §B(1) of this regulation.

C. Policies in Force at Least 6 Months, but Less than 2 Years.

(1) This section applies to a long-term care insurance policy that has been in force for at least 6 months, but less than 2 years.

(a) Rescind a long-term care insurance policy described in §C(1) of this regulation; or

(b) Deny an otherwise valid long-term care insurance claim under a policy described in §C(1) of this regulation.

D. Policies In Force 2 Years or More.

(1) After a long-term care insurance policy has been in force for 2 years it is not contestable upon the grounds of misrepresentation alone.

(2) An insurer may not contest a policy described in §D(1) of this regulation, unless the insurer can demonstrate that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.

E. A long-term care insurance policy may be field issued, if the compensation to the field issuer is not based on the number of policies or certificates issued.

F. If an insurer has paid benefits under the long-term care insurance policy, the insurer may not recover the benefit payments if the policy is rescinded.

G. Life Insurance Policy That Accelerates Benefits for Long-Term Care.

(1) In the event of the death of the insured, this regulation may not be applied to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care.

(2) In the situation described in §G(1) of this regulation, the remaining death benefits under the life insurance policy that accelerates the benefits for long-term care shall be governed by Insurance Article, §16-203, Annotated Code of Maryland.

(3) Except as described in §G(1)—(2) of this regulation, this regulation shall apply to life insurance policies that accelerate benefits for long-term care.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.34 Producer Training Requirements.

A. An insurance producer is not authorized to sell, solicit, or negotiate with respect to long-term care insurance except as authorized by Insurance Article, Title 10, Subtitle 1, Annotated Code of Maryland.

B. An individual may not sell, solicit, or negotiate long-term care insurance unless the individual is licensed as an insurance producer for health insurance or life insurance and complies with the following training requirements:

(1) Completes a one-time training course before:

(a) The date the individual sells, solicits, or negotiates long-term care insurance in Maryland, if the individual is not licensed and selling, soliciting, or negotiating long-term care insurance on the effective date of this regulation; or

(b) September 10, 2008, if the individual is already licensed and selling, soliciting, or negotiating long-term care insurance on the effective date of this regulation; and

(2) Completes ongoing training every 24 months after completing the one-time training course described in §B(1) of this regulation.

C. The training required by §B of this regulation shall meet the requirements set forth in §E of this regulation.

D. The training requirements of §E of this regulation may be approved as continuing education courses under Insurance Article, §10-116, Annotated Code of Maryland.

E. Specific Training Requirements for Solicitation of Long-Term Care Insurance.

(1) Required Length of Training.

(a) The one-time training required by §B(1) of this regulation may not be less than 8 hours.

(b) The ongoing training required by §B(2) of this regulation may not be less than 4 hours.

(2) The training required under §E(1) of this regulation shall consist of topics related to long-term care insurance, long-term care services, and qualified long-term care insurance Partnership programs, including, but not limited to:

(a) State and federal regulations and requirements and the relationship between qualified State long-term care insurance Partnership programs and other public and private coverage of long-term care services, including Medicaid;

(b) Available long-term care services and providers;

(d) Alternatives to the purchase of private long-term care insurance;

(e) The effect of inflation on benefits and the importance of inflation protection; and

(f) Consumer suitability standards and guidelines.

(3) The training required by this regulation may not include training that:

(a) Is insurer or company product specific; or

(b) Includes any sales or marketing information, materials, or training, other than those required by State or federal law.

F. Insurers subject to this chapter shall:

(1) Obtain verification that an insurance producer receives training required by §B of this regulation before an insurance producer is permitted to sell, solicit, or negotiate the insurer's long-term care insurance products;

(2) Maintain records subject to the State's record retention requirements; and

(3) Make the verification described in §F(1) of this regulation available to the Commissioner upon request.

G. Maintenance of Records.

(1) Insurers subject to this chapter shall maintain records with respect to the training of its insurance producers concerning the distribution of its Partnership policies that will allow the Maryland Insurance Administration to provide assurance to the State Medicaid agency that insurance producers have:

(a) Received the training contained in §E(2)(a) of this regulation as required by §B of this regulation; and

(b) Demonstrated an understanding of the Partnership policies and their relationship to public and private coverage of long term care, including Medicaid, in Maryland.

(2) The records required by §G(1) of this regulation shall be:

(a) Maintained in accordance with the State's record retention requirements; and

(b) Made available to the Commissioner upon request.

H. The satisfaction of the training requirements described in this regulation in any state shall be deemed to satisfy the training requirements in Maryland.

Cross References

31.14.03.01D

31.14.03.10B(4)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.35 Availability of New Services or Providers.

A. Notice Requirement.

(1) Except as provided in §B of this regulation, an insurer shall notify policyholders and certificate holders of the availability of a new long-term care insurance policy series that provides coverage for new long-term care services or providers, material in nature, and not previously available through the insurer to the general public.

(2) The notice required by §A(1) of this regulation shall be provided within 12 months of the date the new policy series is made available for sale in Maryland.

B. The notification described in §A of this regulation is not required to be provided:

(1) For any policy issued prior to the effective date of this regulation; or

(2) To any policyholder or certificate holder who:

(a) Is currently eligible for benefits within an elimination period or on a claim;

(b) Previously had been in claim status; or

C. The insurer may require that policyholders or certificate holders meet all eligibility requirements, including underwriting and payment of the required premium, to add the new services or providers described in §A of this regulation.

D. The insurer shall make the new coverage available in one of the following ways:

(1) By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured's attained age;

(2) By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate;

(3) By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged; or

(4) By an alternative program developed by the insurer that meets the intent of this regulation, if the program is filed with and approved by the Commissioner.

E. The premium credits described in §D(2) of this regulation shall be based on premiums paid or reserves held for the prior policy or certificate.

F. The cost for the new policy or certificate described in §D(3) of this regulation may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

G. Notification When New Policies Used in Limited Distribution Channels.

(1) An insurer is not required to notify policyholders or certificate holders of a new proprietary policy series created and filed for use in a limited distribution channel.

(2) Policyholders or certificate holders that purchased the new proprietary policy described in §G(1) of this regulation shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers, material in nature, is made available to that limited distribution channel.

H. Exchanges.

(1) Policies issued pursuant to this regulation shall be considered exchanges and not replacements.

(2) Exchanges made under this regulation are not subject to:

(a) The requirements of Regulations .06 and .25 of this chapter; and

(b) The reporting requirements of §§A—F of Regulation .24 of this chapter.

I. Notices for Group Policies.

(1) Except as provided in §I(2) of this regulation, if the policy is offered through an employer, labor organization, professional, trade or occupational association, the required notification in §A of this regulation shall be made to the offering entity.

(2) If the policy is issued to a group not listed in Insurance Article, §15-302(b)(2), (c)(2), or (d)(2), Annotated Code of Maryland, the notification required by §A of this regulation shall be provided to each certificate holder.

J. Right to Purchase New Benefits.

(1) This regulation does not prohibit an insurer from offering any policy, rider, certificate, or coverage change to any policyholder or certificate holder.

(2) Upon request, any policyholder or certificate holder may apply for currently available coverage that includes the new services or providers.

(3) The insurer may require that policyholders or certificate holders meet all eligibility requirements, including underwriting and payment of the required premium to add the new services or providers.

K. This regulation does not apply to life insurance policies or riders containing accelerated death benefit long-term care benefits.

L. This regulation shall become effective on September 10, 2007.

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.01.36 Right to Reduce Coverage and Lower Premiums.

A. Unless otherwise specified, the requirements of this regulation shall apply to any long-term care policy issued in Maryland on or after September 10, 2008.

B. Required Provision in Long-Term Care Insurance Policies and Certificates.

(1) Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificate holder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

(a) Reducing the maximum benefit; or

(b) Reducing the daily, weekly, or monthly benefit amount.

(2) An insurer may also offer reduction options other than those described in §B(1) of this regulation, if the reduction options are consistent with the policy or certificate design or the insurer’s administrative processes.

(3) For any long-term care policy issued in Maryland on or after March 1, 2018, if the reduction in coverage involves the reduction or elimination of the inflation protection provision, the insurer shall allow the policyholder to continue the benefit amount in effect at the time of the reduction.

C. The provision required by §B of this regulation shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

D. Premium for Reduced Coverage.

(1) The age used to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the coverage currently in force.

(2 For any long-term care policy issued in Maryland on or after March 1, 2018, the premium for the reduced coverage shall:

(a) Be based on the same age and underwriting class used to determine the premium for the coverage currently in force; and

(b) Be consistent with the approved rate table.

E. The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

F. If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of his or her right to reduce coverage and premiums in the notice required by Regulation .07F of this chapter.

G. This regulation does not apply to life insurance policies or riders containing accelerated death benefit long-term care benefits.

Cross References

31.14.01.13E(7)(a)

31.14.01.13E(9)(a)

31.14.02.03D(2)

31.14.02.03K(2)(ii)

History

Administrative History: Effective date: September 1, 1994 (21:13 Md. R. 1156)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.88 to COMAR 31.14.01 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 570)
Administrative History: ——————
Administrative History: Chapter revised effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13E amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .24H—J adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .36 amended effective February 27, 2017 (44:4 Md. R. 256)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

31.14.02 Long-Term Care Insurance — Premium Rates and Reserves

COMAR 31.14.02.01 Applicability and Scope.

This chapter applies to all long-term care insurance delivered or issued for delivery in this State by insurers, nonprofit health service plans, and health maintenance organizations. This chapter is not intended to supersede other applicable insurance laws or regulations which do not conflict with this chapter.

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Employer group long-term care insurance” means a long-term care insurance policy that is:

(a) Issued or delivered in Maryland to:

(i) One or more employers or labor organizations; or

(ii) A trust or the trustees of a fund established by one or more employers or labor organizations, or by a combination of employers or labor organizations; and

(b) Designed for:

(i) Employees or former employees, or a combination of employees and former employees, of the employer or employers; or

(ii) Members or former members, or a combination of members and former members, of the labor organization or labor organizations.

(2) “Exceptional increase” means only those increases filed by an insurer as exceptional for which the Commissioner determines that the need for a premium rate increase is justified due to:

(a) Changes in laws or regulations applicable to long-term care coverage in the State; or

(b) Increased and unexpected utilization that affects the majority of insurers of similar products.

(3) “Incidental” means that the value of the long-term care benefits provided, as of the date of issue, is less than 10 percent of the total value of the benefits provided over the life of the policy.

(4) Long-Term Care Insurance.

(a) “Long-term care insurance” means any group or individual insurance policy, contract, certificate, or rider issued, delivered, or offered by an insurer that:

(i) Is advertised, marketed, offered, or designed to provide coverage for not less than 24 consecutive months for covered persons on an expense incurred, indemnity, prepaid, or insured basis; and

(ii) Provides one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a situation other than an acute care unit of a hospital.

(b) Long-term care insurance includes any product that is advertised, marketed, or offered as long-term care insurance.

(c) “Long-term care insurance” does not include any insurance policy, contract, certificate, or rider which is offered primarily to provide:

(i) Basic Medicare supplement coverage;

(ii) Hospital confinement indemnity coverage;

(iii) Basic hospital expense or medical-surgical expense coverage;

(iv) Disability income protection coverage;

(v) Accident-only coverage;

(vi) Specified disease or specified accident coverage; or

(vii) Skilled nursing care.

(d) “Long-term care insurance” does not include benefits provided under any life insurance policy, contract, or rider:

(ii) That provides the option of a lump-sum payment for one or more of the benefits in §B(4)(d)(i) of this regulation; or

(iii) In which neither benefits nor eligibility for benefits is conditioned on receipt of long-term care.

(e) “Long-term care insurance” does not include any certificate issued under an out-of-State employer group contract.

(5) “Loss ratio” means the ratio of losses incurred to premiums earned on policies issued, delivered, or renewed in the State.

(6) “Out-of-State employer group contract” means a group contract that is:

(a) Entered into with an employer in a state other than Maryland; and

(b) Issued directly to an employer under the laws of that employer's state.

(7) “Policy” means any group or individual policy, contract, subscriber agreement, rider, certificate, or endorsement delivered or issued for delivery in the State by an insurer, a nonprofit health service plan, health maintenance organization, or a preferred provider organization.

(8) “Qualified actuary” means a member in good standing of the American Academy of Actuaries.

(9) Similar Policy Forms.

(a) “Similar policy forms” means all of the long-term care insurance policies and certificates issued by an insurer in the same long-term care benefit classification as the policy form being considered.

(b) With respect to certificates issued under employer group long-term care insurance policies, “similar policy forms” includes other certificates issued under employer group long-term care insurance policies with the same long-term care benefit classifications.

(c) With respect to certificates issued under employer group long-term care insurance policies, “similar policy forms” does not include certificates or policies issued as long-term care insurance, except those certificates described in §B(9)(b) of this regulation.

(d) For purposes of determining similar policy forms, long-term care policies and certificates shall be considered in the following three separate long-term care benefit classifications:

(i) Institutional long-term care benefits only;

(ii) Noninstitutional long-term care benefits only; or

(iii) Comprehensive long-term care benefits.

Cross References

31.14.02.06K(1)

31.14.02.06-1A(2)

31.14.02.06-1J(1)

31.14.02.13B(1)(i)(iii)

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.03 Required Disclosure of Rating Practices to Consumers.

A. Applicability.

(1) Except as provided in §A(2) and (3) of this regulation, the provisions of this regulation apply to any long-term care policy or certificate issued in this State on or after October 1, 2002.

(2) For certificates issued on or after April 1, 2002, under an employer group long-term care insurance policy that was in force on April 1, 2002, the provisions of this regulation apply on the policy anniversary following April 1, 2003.

(3) The requirements of §K(2)(ii)—(iv) of this regulation shall apply to any rate increase implemented in Maryland on or after March 1, 2018.

B. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in §D of this regulation to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time.

C. If the method of application does not allow for delivery at the time of application or enrollment, an insurer shall provide all of the information listed in §D of this regulation to the applicant no later than the time of delivery of the policy or certificate.

D. The insurer shall provide the following information to the applicant in accordance with §§B and C of this regulation:

(1) A statement that the policy may be subject to rate increases in the future;

(2) An explanation of potential future premium rate revisions, and the policyholder’s or certificate holder’s options in the event of a premium rate revision, including the options described in §B of COMAR 31.14.01.36; and applicable disclosures described in §K(2)(iii) and (iv) of this regulation.

(3) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;

(4) A general explanation for applying premium rate or rate schedule adjustments that shall include:

(a) A description of when premium rate or rate schedule adjustments will be effective (for example, next anniversary date or next billing date); and

(b) The right to a revised premium rate or rate schedule as provided in §D(2) of this regulation if the premium rate or rate schedule is changed; and

(5) Information regarding each premium rate increase on the policy form or similar policy forms over the past 10 years for Maryland or any other state that, at a minimum, identifies:

(a) The policy forms for which premium rates have been increased;

(b) The calendar years when the form was available for purchase; and

(c) The amount or percent of each increase, expressed as a percentage of the premium rate before the increase, or as minimum and maximum percentages if the rate increase is variable by rating characteristics.

E. The insurer may, in a fair manner, provide explanatory information related to the rate increases in addition to the information required in §D(5) of this regulation.

F. An insurer may exclude premium rate increases from the disclosure required by §D(5) of this regulation, if the premium rate increases only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred before the acquisition.

G. Disclosure Required for Initial Rate Increases on Acquired Insurance.

(1) If an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of April 1, 2002, or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure required by §D(5) of this regulation.

(2) The nonaffiliated selling company shall include the disclosure of the rate increase referenced in §G(1) of this regulation in accordance with §D(5) of this regulation.

H. Disclosure Required for Subsequent Rate Increases on Acquired Insurance.

(1) This section applies if the acquiring insurer referenced in §G of this regulation files for a rate increase after the rate increase described in §G of this regulation on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in §G of this regulation.

(2) The acquiring insurer described in §H(1) of this regulation shall make all disclosures required by §D(5) of this regulation.

(3) The disclosures required under §H(2) of this regulation apply to all rate increases after the initial rate increase described in §G of this regulation, including subsequent rate increases within the 24-month period referenced in §G of this regulation.

(4) The disclosure required by this section shall include the disclosure of the earlier rate increase referenced in §G of this regulation.

I. Acknowledgement.

(1) Unless the method of application does not allow for signature at the time of application, an applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under §D(1) and (5) of this regulation.

(2) If, due to the method of application, the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate.

J. An insurer shall use the forms set forth in Regulations .08 and .09 of this chapter to comply with the requirements of §D of this regulation.

K. Notice of Premium Rate Schedule Increase.

(1) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days before the implementation of a premium rate schedule increase by the insurer.

(2) A notice shall include:

(i) The information required by §D of this regulation when a rate increase is implemented;

(ii) An offer to reduce policy benefits provided by the current coverage consistent with the requirements of COMAR 31.14.01.36;

(iii) A disclosure stating that all options available to the policyholder may not be of equal value; and

(iv) In the case of a partnership policy, a disclosure that some benefit reduction options may result in a loss in partnership status that may reduce policyholder protections.

Cross References

31.14.01.16A(3)

31.14.02.04B(1)

31.14.02.04E(1)

31.14.02.06B(2)(a)

31.14.02.06-1B(2)(a)

31.14.02.08

31.14.02.09

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.04 Initial Filing Requirements.

A. Applicability.

(1) Sections B.—D. of this regulation apply to any long-term care policy issued in Maryland on or after October 1, 2002 and before September 1, 2017.

(2) Sections E.—H. of this regulation apply to any to any long-term care policy issued in Maryland on or after September 1, 2017.

B. An insurer shall provide the following information to the Commissioner at least 60 days before making a long-term care insurance form available for sale:

(1) A copy of the disclosure documents required by Regulation .03 of this chapter; and

(2) An actuarial certification consisting of at least the following:

(a) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;

(b) A statement that the policy design and coverage provided have been reviewed and taken into consideration;

(d) A complete description of the basis for contract reserves that are anticipated to be held under the form, to include:

(i) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amount to be held;

(ii) A statement that the assumptions used for reserves contain reasonable margins for adverse experience;

(iii) A statement that the net valuation premium for renewal years does not increase; and

(iv) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses or, if such a statement cannot be made, a complete description of the situations where this does not occur; and

(e) One of the following:

(i) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or

(ii) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

C. In providing the statement required by §B(2)(d)(iv) of this regulation, the insurer may base this statement on the following:

(1) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; or

(2) If the gross premiums for certain age groups appear to be inconsistent with the requirement in §B(2)(d)(iv) of this regulation, the Commissioner may request a demonstration under §D of this regulation based on a standard age distribution.

D. Additional Information.

(1) The Commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums.

(2) The actuarial demonstration shall include:

(a) Premium and claim experience on similar policy forms, adjusted for any premium or benefit differences;

(b) Relevant and credible data from other studies; or

(3) If the Commissioner asks for additional information under this section, the period in §B of this regulation does not include the period during which the insurer is preparing the requested information.

E. An insurer shall provide the following information to the Commissioner at least 60 days before making a long-term care insurance form available for sale:

(1) A copy of the disclosure documents required by Regulation .03 of this chapter;

(2) An actuarial certification consisting of at least the following:

(b) A statement that the policy design and coverage provided have been reviewed and taken into consideration;

(d) A statement that the premiums contain one of the following:

(i) At least the minimum composite margin for moderately adverse experience as specified in §G(1) of this regulation; or

(ii) The specification of and justification for a lower margin as required by §G(2) of this regulation; and

(e) One of the following:

(ii) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences;

(f) A statement that reserve requirements have been reviewed and considered. Support for this statement shall include:

(i) Sufficient detail or sample calculations to provide a complete depiction of the reserve amounts to be held; and

(ii) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; and

(g) If the statement required in §E(2)(f)(ii) of this regulation cannot be made, a complete description of the circumstances under which this does not occur; and

(3) An actuarial memorandum prepared, dated and signed by a member of the American Academy of Actuaries that:

(a) Addresses and supports each specific item required as part of the actuarial certification;

(b) Provides at least the following information:

(i) An explanation of the review performed by the actuary before making the statements in §E(2)(b) and (c) of this regulation;

(ii) A complete description of pricing assumptions;

(iii) Sources and levels of margins incorporated into the gross premiums that are the basis for the statement made in the actuarial certification under §E(2)(a) of this regulation;

(iv) An explanation of the analysis and testing performed in determining the sufficiency of the margins provided for in §E(2)(d) of this regulation, to include a clear description of the deviations in margins between ages, sexes, plans or states other than those produced utilizing generally accepted actuarial methods for smoothing and interpolating gross premium scales; and

(v) A demonstration that the gross premiums include the minimum composite margin specified in §E(2)(d) of this regulation.

F. In providing the statement required by §E(2)(f)(ii) of this regulation, the insurer may base this statement on the following:

(1) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; or

(2) If the gross premiums for certain age groups appear to be inconsistent with the requirement in §E(2)(f)(ii) of this regulation, the Commissioner may request a demonstration under §H of this regulation based on a standard age distribution.

G. The following provisions apply to the statement required under §E(2)(d) of this regulation:

(1) For the purposes of the actuarial certification under §E(2)(d)(i) of this regulation, a composite margin may not be less than 10 percent of lifetime claims;

(2) For the purposes of the actuarial certification under §E(2)(d)(ii) of this regulation, a composite margin less than 10 percent may be justified in uncommon circumstances, if the following is submitted:

(a) Full justification of the proposed amount; and

(b) Methods to monitor developing experience that would be the basis for withdrawal of approval for the lower margins;

(3) A composite margin lower than otherwise considered appropriate for the standalone long-term care policy may be justified for long-term care benefits if it is:

(a) Provided through a life insurance policy or an annuity contract; and

(b) The lower composite margin is justified by appropriate actuarial demonstration addressing margins and volatility when considering the entirety of the product; and

(4) A greater margin may be appropriate if the insurer has less credible experience to support its assumptions used to determine the premium rates.

H. Additional Information.

(1) In any review of the actuarial certification and actuarial memorandum required by §E of this regulation, the Commissioner may request review by an independent actuary with experience in long-term care pricing.

(2) If the Commissioner asks for additional information under this section, the period in §E of this regulation does not include the period during which the insurer is preparing the requested information.

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.05 Loss Ratio.

A. This regulation applies to all long-term care insurance policies or certificates except those covered under Regulations .04, .06, and, .06-1 of this chapter.

B. Minimum Loss Ratios.

(1) Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums if the expected loss ratio is at least 60 percent, calculated in a manner which provides for adequate reserving of the long-term care insurance risk.

(2) In evaluating the expected loss ratio described in §B(1) of this regulation, due consideration shall be given to all relevant factors, including:

(a) Statistical credibility of incurred claims experience and earned premiums;

(b) The period for which rates are computed to provide coverage;

(d) Concentration of experience within early policy duration;

(e) Expected claim fluctuation;

(f) Experience refunds, adjustments, or dividends;

(g) Renewability features;

(h) All appropriate expense factors;

(i) Interest;

(j) Experimental nature of the coverage;

(k) Policy reserves;

(l) Mix of business by risk classification; and

(m) Product features such as long elimination periods, high deductibles, and high maximum limits.

C. Life Insurance Policies that Accelerate Benefits for Long-Term Care.

(1) Section B of this regulation does not apply to life insurance policies that accelerate benefits for long-term care.

(2) A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if all of the following requirements are met:

(a) The interest credited internally to determine cash value accumulations, including long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;

(b) The portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of Insurance Article, Title 16, Subtitle 3, Annotated Code of Maryland;

(d) Any policy illustration used for the policy meets the applicable requirements of COMAR 31.09.09; and

(e) An actuarial memorandum is filed with the Commissioner that includes:

(i) A description of the basis on which the long-term care rates were determined;

(ii) A description of the basis for the reserves;

(iii) A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;

(iv) A description and a table of each actuarial assumption used;

(v) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;

(vi) The estimated average annual premium per policy and the average issue age;

(vii) A statement as to whether underwriting is performed at the time of application; and

(viii) A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.

(3) For the expense assumptions under §C(2)(e)(iv) of this regulation, an insurer shall include the percent of premium dollars per policy and the dollars per unit of benefits, if any.

(4) The statement required by §C(2)(e)(vii) of this regulation shall indicate whether underwriting is used. If underwriting is used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. If coverage is under a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs.

Cross References

31.14.01.13I

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.06 Premium Rate Schedule Increases.

A. Applicability.

(1) Except as provided in §A(2) of this regulation, the provisions of this regulation apply to any long-term care policy or certificate issued in Maryland on or after October 1, 2002 and before September 1, 2017.

B. Premium Rate Increase Filing Requirements.

(1) An insurer shall request approval of a pending premium rate schedule increase, including an exceptional increase, to the Commissioner at least 45 days before the notice to the policyholders.

(2) The notice to the Commissioner required by §B(1) of this regulation shall include:

(a) Information required by Regulation .03 of this chapter;

(b) Certification by a qualified actuary that:

(i) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated; and

(ii) The premium rate filing is in compliance with the provisions of this regulation;

(i) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase;

(ii) The method and assumptions used in determining the lifetime projections described in §B(2)(c)(i) of this regulation, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;

(iii) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;

(iv) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary;

(v) A statement that policy design, underwriting, and claims adjudication practices have been taken into consideration;

(vi) If it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, composite rates reflecting projections of new certificates; and

(vii) A demonstration that actual and projected costs exceed costs anticipated at the time of initial pricing under moderately adverse experience and that the composite margin specified in Regulation .04B(2)(d) or .04E(2)(d) of this chapter is projected to be exhausted.

(d) A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the Commissioner; and

(e) Sufficient information for review and approval of the premium rate schedule increase by the Commissioner.

(3) The lifetime projection and assumptions required to be filed under §B(2)(c)(i) and (ii) of this regulation shall comply with the following requirements:

(a) Annual values for the 5 years preceding and the 3 years following the valuation date shall be provided separately;

(b) The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;

(d) For exceptional increases:

(i) The projected experience shall be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

(ii) If the Commissioner determines as provided in Regulation .07C of this chapter that offsets may exist, the insurer shall use appropriate net projected experience.

C. An insurer may request a premium rate schedule increase less than what is required under this regulation and the Commissioner may approve this premium rate schedule increase, without submission of the certification required under §B(2)(b)(i)of this regulation, if:

(1) The actuarial memorandum discloses the premium rate schedule increase necessary to make the certification required under §B(2)(b) of this regulation;

(2) The premium rate schedule increase filing satisfies all other requirements of §B of this regulation; and

(3) The premium rate schedule increase filing is, in the opinion of the Commissioner, in the best interest of policyholders.

D. All premium rate schedule increases shall be determined in accordance with the following requirements:

(1) Exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;

(2) Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, is not less than the sum of the following:

(a) The accumulated value of the initial earned premium times 58 percent;

(b) 85 percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(d) 85 percent of the present value of future projected premiums not in §C(2)(c) of this regulation on an earned basis;

(3) If a policy form has both exceptional and other increases, the values in §C(2)(b) and (d) shall also include 70 percent for exceptional rate increase amounts;

(4) All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified in Regulation .13 of this chapter; and

(5) The actuary shall disclose as a part of the actuarial memorandum the use of any appropriate averages.

E. Updated Projections.

(1) For each rate increase that is implemented, the insurer shall file for approval by the Commissioner updated projections, as described in §B(2)(c)(i) and (ii) of this regulation, annually for the next 3 years and include a comparison of actual results to projected values.

(2) The Commissioner may extend the period to greater than 3 years if actual results are not consistent with projected values from prior projections.

(3) For group insurance policies that meet the conditions in §K of this regulation, the projections required by this section shall be provided to the policyholder instead of filing with the Commissioner.

F. Lifetime Projections.

(1) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as described in §B(2)(c)(i) and (ii) of this regulation, shall be filed for approval by the Commissioner every 5 years following the end of the required period in §D of this regulation.

(2) For group insurance policies that meet the conditions in §K of this regulation, the projections required by this section shall be provided to the policyholder instead of filing with the Commissioner.

G. Commissioner's Authority if Actual Experience Does Not Match Projected Experience.

(1) If the Commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in §C of this regulation, the Commissioner may require the insurer to implement any of the following:

(a) Premium rate schedule adjustments; or

(b) Other measures to reduce the difference between the projected and actual experience.

(2) In determining whether the actual experience adequately matches the projected experience, consideration shall be given to §B(2)(c)(vi) of this regulation, if applicable.

H. Filing Required if Rate Increase Causes Eligibility for Contingent Benefit.

(1) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:

(a) A plan, subject to Commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; and

(b) The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to §C of this regulation had the greater of the original anticipated lifetime loss ratio or 58 percent been used in the calculations described in §C(2)(a) and (c) of this regulation.

(2) If the insurer fails to file the plan required by §G(1)(a) of this regulation or fails to receive approval from the Commissioner of the plan filed under §G(1)(a) of this regulation, the Commissioner may impose the condition in §H of this regulation.

I. Lapse Rates.

(1) The Commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated, if a rate increase filing meets the following criteria:

(a) The rate increase is not the first rate increase requested for the specific policy form or forms;

(b) The rate increase is not an exceptional increase; and

(c) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

(2) If the Commissioner determines during the review described in §H(1) of this regulation that significant adverse lapsation has occurred, is anticipated in the filing, or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the Commissioner may determine that a rate spiral exists.

(3) If the Commissioner determines that a rate spiral exists as described in §H(2) of this regulation, the Commissioner may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.

(4) The offer required by §H(3) of this regulation shall:

(a) Be subject to the approval of the Commissioner;

(b) Be based on actuarially sound principles, but not be based on attained age; and

(c) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.

(5) Maintenance of Experience. The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:

(a) The maximum rate increase determined based on the combined experience; and

(b) The maximum rate increase determined based only on the experience of insureds originally issued the form plus 10 percent.

J. If the Commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the Commissioner may, in addition to the provisions of §H of this regulation, prohibit the insurer from either of the following:

(1) Filing and marketing comparable coverage for a period of up to 5 years; or

(2) Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.

K. Exemption for Incidental Coverage.

(1) Sections A—I of this regulation do not apply to policies for which the long-term care benefits provided by the policy are incidental, as defined in Regulation .02B(3) of this chapter, if the policy complies with all of the following requirements:

(b) The portion of the policy that provides insurance benefits other than long-term care coverage meets the nonforfeiture requirements as applicable in any of the following:

(i) The standard nonforfeiture requirements for life insurance found in Insurance Article, Title 16, Subtitle 3, Annotated Code of Maryland;

(ii) The standard nonforfeiture requirements for individual deferred annuities found in Insurance Article, Title 16, Subtitle 5, Annotated Code of Maryland; or

(iii) The requirements for variable annuities found in COMAR 31.09.04;

(d) The portion of the policy that provides insurance benefits other than long-term care coverage meets the requirements as applicable in the following:

(i) Policy illustrations for life insurance as required by COMAR 31.09.09;

(ii) Disclosure requirements for annuities as required by COMAR 31.15.04; and

(iii) Disclosure requirements for variable annuities as required by COMAR 31.09.04;

(e) An actuarial memorandum is filed with the Commissioner that includes:

(i) A description of the basis on which the long-term care rates were determined;

(ii) A description of the basis for the reserves;

(iii) A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;

(iv) A description and a table of each actuarial assumption used;

(v) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;

(vi) The estimated average annual premium per policy and the average issue age;

(vii) A statement as to whether underwriting is performed at the time of application; and

(viii) A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values, and reserves on the underlying insurance policy, both for active lives and those in long-term care claim status.

(2) For the expense assumptions used in §J(1)(e)(iv) of this regulation, an insurer shall include percent of premium dollars per policy and dollars per unit, if any.

(3) Contents of Statement on Underwriting.

(a) The statement required by §J(1)(e)(vii) of this regulation shall indicate whether underwriting is used.

(b) If underwriting is used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting.

(c) If coverage is under a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs.

L. Sections F and H of this regulation do not apply to employer group long-term care insurance if:

(1) The policies insure 250 or more individuals and the policyholder has 5,000 or more eligible employees of a single employer; or

(2) The policyholder, and not the certificate holders, pays a material portion of the premium, which may not be less than 20 percent of the total premium for the group in the calendar year before the year a rate increase is filed.

Cross References

31.14.02.07A

History

Administrative History: Effective date: November 8, 1993 (20:22 Md. R. 1707)
Administrative History: ——————
Administrative History: Chapter recodified from COMAR 09.30.89 to COMAR 31.14.02 effective September 7, 1998 (25:18 Md. R. 1439)
Administrative History: ——————
Administrative History: Chapter revised effective April 1, 2002 (29:6 Md. R. 572)
Administrative History: Regulation .01 amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .03 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .04E—H adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .05A amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06 amended effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .06-1 adopted effective February 27, 2017 (44:4 Md. R. 256)
Administrative History: Regulation .09 amended effective September 10, 2007 (34:18 Md. R. 1581)
Administrative History: Regulation .11B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .13B amended effective September 1, 2014 (41:17 Md. R. 972)
Administrative History: Regulation .14 amended effective September 1, 2014 (41:17 Md. R. 972)
Authority: Health-General Article, §19-705; Insurance Article, §§2-109, 14-124, Title 18, Subtitle 1, and Title 27; Annotated Code of Maryland

COMAR 31.14.02.06-1 Premium Rate Schedule Increases for Policies Subject to Loss Ratio Limits Related to Original Filings.

A. Applicability.

(1) Except as provided in §A(2) of this regulation, this regulation applies to any long-term care policy or certificate issued in Maryland on or after September 1, 2017.

(2) For certificates issued on or after the effective date of this amended regulation under an employer group long-term care insurance policy as defined in Regulation .02B(1) of this chapter if the policy was in force at the time this amended regulation became effective, the provisions of this regulation shall apply on the policy anniversary following March 1, 2018.

B. Premium Rate Increase Filing Requirements.

(1) An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the Commissioner at least 30 days before issuing the notice to the policyholders.

(2) The notice to the Commissioner required by §B(1) of this regulation shall include:

(a) Information required by Regulation .03 of this chapter;

(b) Certification by a qualified actuary that:

(ii) The premium rate filing is in compliance with the provisions of this regulation;

(i) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase;

(iii) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit on lapse;

(v) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and

(vi) If it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer will need to file composite rates reflecting projections of new certificates;

(e) Sufficient information for review and approval of the premium rate schedule increase by the Commissioner.

(3) The lifetime projection and assumptions required to be filed under §B(2)(c)(i) and (ii) of this regulation shall comply with the following requirements:

(a) Annual values for the 5 years preceding and the 3 years following the valuation date shall be provided separately;

(b) The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;

(d) For exceptional increases:

(i) The projected experience shall be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

(ii) If the Commissioner determines as provided in Regulation .07C of this chapter that offsets may exist, the insurer shall use appropriate net projected experience.

(4) The insurer may request and the Commissioner may approve a premium rate schedule increase less than what is required under this regulation without submission of the certification in §B(2)(b)(i) of this regulation, if:

(a) The actuarial memorandum discloses the premium rate schedule increase necessary to make the certification required under §B(2)(b) of this regulation;

(b) The premium rate schedule increase filing satisfies all other requirements of this regulation; and

C. All premium rate schedule increases shall be determined in accordance with the following requirements:

(1) Exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;

(2) Premium rate schedule increases shall be calculated such that the sum of the lesser of the accumulated value of actual incurred claims, without the inclusion of active life reserves, or the accumulated value of historic expected claims, with the inclusion of active life reserves, plus the present value of the future expected incurred claims, projected without the inclusion of active life reserves, will not be less than the sum of the following:

(a) The accumulated value of the initial earned premium times 58 percent;

(b) 85 percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(d) 85 percent of the present value of future projected premiums not in §C(2)(c) of this regulation on an earned basis;

(3) Expected claims shall be calculated as follows:

(a) Original filing assumptions shall be assumed until new assumptions are filed as part of a rate increase;

(b) New assumptions shall be used for all periods beyond each requested effective date of a rate increase;

(d) Expected claims shall include margins for moderately adverse experience that are:

(i) Amounts included in the claims that were used to determine the lifetime loss ratio consistent with the original filing; or

(ii) Amounts as modified in any rate increase filing.

(4) If a policy form has both exceptional and other increases, the values in §C(2)(b) and (d) shall also include 70 percent for exceptional rate increase amounts;

(5) All present and accumulated values used to determine rate increases, including the lifetime loss ratio consistent with the original filing reflecting margins for moderately adverse experience, shall use the maximum valuation interest rate for contract reserves as specified in Regulation .13 of this chapter; and

(6) The actuary shall disclose as a part of the actuarial memorandum the use of any appropriate averages.

D. Updated Projections.

(2) The Commissioner may extend the period to greater than 3 years if actual results are not consistent with projected values from prior projections.

E. Lifetime Projections.

(2) For group insurance policies that meet the conditions in §L of this regulation, the projections required by this section shall be provided to the policyholder instead of filing with the Commissioner.

F. Commissioner’s Authority if Actual Experience Does Not Match Projected Experience.

(a) Premium rate schedule adjustments; or

(b) Other measures to reduce the difference between the projected and actual experience.

(2) In determining whether the actual experience adequately matches the projected experience, consideration shall be given to §B(2)(c)(vi) of this regulation, if applicable.

G. Filing Required if Rate Increase Causes Eligibility for Contingent Benefit.

(1) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:

(a) A plan, subject to the Commissioner’s approval, for improved administration;

(b) A plan, subject to the Commissioner’s approval, for improved claims processing; or

(2) A plan filed in accordance with §G(1) of this regulation shall:

(a) Demonstrate that it is designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases; or

(b) Demonstrate that appropriate administration or claims processing, or both, has been implemented or is in effect.

(3) If the insurer fails to file a plan required by §G(1) of this regulation or fails to receive approval from the Commissioner of the plan filed under §G(1) of this regulation, the Commissioner may impose the requirements in §H of this regulation.

H. Lapse Rates.

(a) The rate increase is not the first rate increase requested for the specific policy form or forms;

(b) The rate increase is not an exceptional increase; and

(c) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

(4) The offer required by §H(3) of this regulation shall:

(a) Be subject to the approval of the Commissioner;

(b) Be based on actuarially sound principles, but not be based on attained age; and

(c) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.

(a) The maximum rate increase determined based on the combined experience; and

(b) The maximum rate increase determined based only on the experience of insureds originally issued the form plus 10 percent.

I. If the Commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the Commissioner may, in addition to the provisions of §H of this regulation, prohibit the insurer from:

(1) Filing and marketing comparable coverage for a period of up to 5 years;

(2) Offering all other similar coverages; or

(3) Limiting marketing of new applications to the products subject to recent premium rate schedule increases.

J. Exemption for Incidental Coverage.