Achievable Casualty

Maryland State Regulations & NAIC Insurance Law

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Licensing

Any individual applying for a Maryland resident producer’s license must:

Be at least 18 years old
Be a resident of Maryland before submitting an application

Pre-licensing course and exam

Maryland does not have specific pre-licensing requirements, but an applicant must pass the licensing examination for the line of authority: since October 1, 2024, the law no longer requires a Commissioner-approved program of study before the examination (Maryland Insurance Administration Bulletin 24-19).

Fingerprints/background check

The Commissioner reviews an applicant’s background before issuing a license, and many states require applicants to submit fingerprints for a state and FBI criminal history check as part of the application.

Controlled business

Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.

Non-resident license

A producer licensed in another state can obtain a Maryland nonresident license without taking Maryland’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

The NAIC’s model act limits a temporary license to 180 days. In Maryland, a temporary license expires 15 months after its effective date (Md. Code, Ins. § 10-120(e)).

Military service

Under the NAIC’s model act, a producer who cannot meet license renewal requirements because of military service, or because of another extenuating circumstance such as a long-term medical disability, may request a waiver of those requirements and of any examination, fine or sanction for missing them.

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

Each state sets its own renewal cycle.

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Under the NAIC’s model act, a lapsed license may be reinstated within 12 months of the renewal due date, for a penalty of double the unpaid renewal fee. Each state sets its own window and fee, and after the window closes the person must qualify for a new license.

Continuing education

All states, including Maryland, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license.

Individuals licensed in the state of Maryland must complete continuing education prior to renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

Under the NAIC’s model act, the licensee reports a change of address to the regulator within 30 days of the change.

The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it.

Company regulations

An insurance company must be authorized by the Insurance Administration to conduct business in Maryland.

To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.

Capital and surplus requirement

A company authorized to conduct insurance business in Maryland must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Maryland, the Commissioner must refuse to renew, suspend or revoke the certificate of an insurer that no longer meets its requirements because of a deficiency in assets or any other reason, and may impose a penalty of $100 to $125,000 per violation instead of or in addition to suspension or revocation (Md. Code, Ins. § 4-113(a)(2), (d)).

Duties of the Maryland Insurance Commissioner

The Maryland Insurance Commissioner serves as head of the Maryland Insurance Administration, an independent agency within the state executive branch created in 1993. Prior to that, insurance was part of the Department of Licensing and Regulation.

The Commissioner oversees the department’s efforts to:

Regulate the state’s insurance companies and producers
Investigate consumer complaints about insurance coverage

The Commissioner is responsible for establishing and enforcing regulations in the Maryland insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years.
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

The Commissioner does not have the authority to arrest, issue injunctions, or sentence jail time. They can start the process, but it takes a law officer to arrest and a judge or court of law to issue injunctions or sentence jail time.

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Having willfully violated Maryland’s insurance laws, or willfully failed to comply with or violated a proper order, subpoena or regulation of the Commissioner (Md. Code, Ins. § 10-126(a)(1), (11)).
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted by final judgment in any state or federal court of a felony or a crime involving moral turpitude (Md. Code, Ins. § 10-126(a)(8)).
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Maryland.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist.

Receiving a cease and desist order does not mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Maryland law, and may ask a court to review the final order. In Maryland, the Commissioner gives notice at least 10 days before a hearing, and a person aggrieved by an order may demand a hearing; a demand received before the order takes effect or within 10 days after it is served stays the order pending the hearing, except an order resulting from a hearing, an emergency order, or one based on an insurer’s impairment (Md. Code, Ins. §§ 2-210(a), 2-211(a)(1), 2-212(a)). Under Maryland’s unfair trade practices law the hearing comes first: the Commissioner holds a hearing, after giving notice of the hearing and the charges, before issuing a cease and desist order, and an order resulting from a hearing is not stayed by a demand (Md. Code, Ins. §§ 27-103(a), 2-212(a)(2)).

A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes. In Maryland, the Commissioner may impose on a licensed producer a penalty of $100 to $5,000 for each violation, instead of or in addition to suspending or revoking the license (Md. Code, Ins. § 10-126©).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

Depending on the line of insurance and the form, a state may require approval before a form is used, often with a period after which a filing that has not been acted on is deemed approved, or may allow the form to be used as soon as it is filed (“file and use”). In Maryland, a life or health form is filed at least 60 days before delivery and is deemed approved unless the Commissioner approves or disapproves it within that period or an extension of up to 30 days (Md. Code, Ins. § 12-203(b)-©).

If a policy provision conflicts with Maryland law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

An insurance producer who represents to the public that they are licensed to conduct insurance business in Maryland, but has not passed the appropriate licensing examination, is in violation of regulation.

This includes any public communication, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Maryland in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The model act’s test is whether the statement is untrue, deceptive or misleading, not whether the person meant to deceive.

Defamation

Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure that insurer or any other person engaged in the business of insurance. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, coercion and intimidation

Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.

False financial statements

In Maryland, it is a fraudulent insurance act to knowingly or willfully make a false or fraudulent statement or representation in or with reference to an application for insurance (Md. Code, Ins. § 27-406(1)).

Illegal inducements

Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.

States differ on promotional gifts. The NAIC’s model act lets producers and insurers give customers non-cash gifts, meals or charitable donations up to an amount the state considers reasonable, as long as the gift is not conditioned on buying or renewing a policy and is offered without unfair discrimination. Each state sets its own limit. Maryland allows educational materials, promotional materials or articles of merchandise that cost no more than $50, as long as receiving them is not contingent on buying insurance (Md. Code, Ins. §§ 27-209(a)(4), (b), 27-212(d)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
There is no coverage for violation of insurance regulation.

Rebating

Maryland licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation. Maryland’s twisting statute reaches a statement misrepresenting or incompletely comparing a policy’s terms, conditions or benefits to induce the policyholder to forfeit, surrender, retain, exchange or convert it or let it lapse (Md. Code, Ins. § 27-213); a misrepresentation about an insurer’s financial condition is prohibited separately (§ 27-202(3)), as is defamation (§ 27-204).

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair marketing practices

The Insurance Administration is responsible for establishing minimum standards for the full and fair disclosure of policy content.

They also require:

Standardization and simplification of the terms used to describe insurance coverage

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA:

Established a framework of responsibilities of federal and state regulators for these financial industries
Permits financial services companies to merge and engage in a variety of new business activities, including insurance
Attempts to address the regulatory issues raised by such combinations

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.

In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance.

Telemarketing

The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Maryland’s own law is narrower, barring telephone solicitations, including automated or recorded calls, between 8 p.m. and 8 a.m. in the called party’s time zone (Md. Code, Com. Law § 14-4502©(1))
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Every state has a property and casualty insurance guaranty association that pays covered claims when a member insurer becomes insolvent. Insurers licensed to write the covered lines in the state must belong to it, and it is funded by assessments on its members.

Each state sets the most its association pays per claim. The NAIC’s model act sets $500,000 per claimant for most covered claims and $10,000 for the return of unearned premium.

Auto insurance state minimum

The “state minimum” auto insurance is the minimum amount of car insurance you must carry in your state to legally drive a vehicle in Maryland.

It ensures that you can pay for others’ injuries and damages if you cause a car accident.
Driving without adequate coverage can result in financial repercussions such as fines, license suspensions, vehicle impoundment and even jail time.

Auto insurance is typically structured as a split limit policy with coverage minimums represented by numbers and slashes.

The first number is BI coverage per person.
The second is BI coverage per incident (if multiple people are injured).
The third is PD per incident.

In Maryland, the state minimum is 30/60/15, which would cover:

Up to $30,000 of Bodily Injury protection for each person involved in an accident
Up to $60,000 worth of Bodily Injuries per incident
Up to $15,000 of Property Damage per incident

Licensing

Minimum age 18; must be Maryland resident before applying
Since Oct. 1, 2024: no pre-approved study program required, but must pass exam
Background/fingerprint checks common before license issuance

Controlled business

Insurance on producer’s own life/property/family/employer/controlled business
License intended for public sales; states restrict license use mainly for controlled business

Non-resident license

No exam needed if licensed & in good standing in home state, applies with fees, and reciprocity exists
Address change: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of PE/exam

Temporary license

Issued without exam to keep business running (death/disability of producer, military deployment)
May require licensed sponsor
NAIC model: max 180 days; Maryland: expires 15 months after effective date

Military service

Waiver available for renewal requirements/exams/fines due to military service or long-term disability

Renewal and reinstatement

Must renew on schedule (fee + CE)
Lapsed license: NAIC model allows reinstatement within 12 months, penalty = double fee
After window closes, must requalify as new applicant

Continuing education

Required for renewal of major lines licenses
Hours set by state law, published by insurance department

Notice of change of name or address

Report address change within 30 days
Report administrative/criminal actions within 30 days of final disposition/pretrial hearing
Must notify regulator before using assumed business name

Company regulations

Insurer must obtain certificate of authority from Commissioner
Must file charter, financial statements, proof of capital/surplus, fees

Capital and surplus requirement

Must maintain minimum capital/surplus to keep certificate of authority
Maryland: Commissioner must suspend/revoke if deficient; penalty $100–$125,000 per violation

Duties of the Maryland Insurance Commissioner

Heads Maryland Insurance Administration (created 1993)
Regulates insurers/producers, investigates complaints, examines financial condition (every 5 years per NAIC model)
Can refer violations for criminal prosecution but cannot arrest, injunct, or jail

Suspend, revoke or non-renew

Grounds: false application info, fraud, felony/moral turpitude conviction, unfair trade practices, forgery, cheating on exam, prior license revocation elsewhere

Cease and desist

Ordered when producer violates insurance laws
Does not equal suspension/revocation; must stop/limit specified activity

Hearing and penalties

Entitled to notice (Maryland: 10 days) and hearing before license action
Civil penalties possible; Maryland: $100–$5,000 per violation for producers

Unfair claims settlement practices

Violations include delaying claims, failing to investigate, denying without investigation, settling below fair value
Must occur flagrantly/frequently to count as pattern violation

Policy forms

Filed with Commissioner; approval process varies (file-and-use vs. deemed approved)
Maryland: life/health forms filed 60 days ahead, deemed approved unless acted on (+30 day extension)
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to claim licensure without passing exam, via any public communication
May result in suspension/revocation of other licenses

Misrepresentation

Prohibited: inaccurate policy illustrations, incomplete benefit comparisons, inducing lapse/surrender (twisting)

False advertising

Untrue, deceptive or misleading statements about insurance business prohibited regardless of medium
Test: whether statement is misleading, not intent

Defamation

False or maliciously critical statements about insurer’s financial condition, made to injure, prohibited

Boycott, coercion and intimidation

Concerted acts restraining or monopolizing insurance business prohibited

False financial statements

Maryland: knowingly making false statements on insurance applications is a fraudulent act

Illegal inducements

Offering value beyond policy terms as inducement prohibited unless allowed by law
NAIC model allows reasonable non-cash gifts without purchase condition
Maryland cap: $50 for promotional items

Unfair discrimination

Prohibited: different treatment of same-class risks in life/health rates
Prohibited: denying coverage based on sex, marital status, race, religion, national origin
P&C: cannot deny solely for geographic location or physical/mental impairment without actuarial justification

Errors & Omissions

E&O covers honest mistakes causing client financial harm
Does not cover regulatory violations

Rebating

Maryland prohibits giving refunds/discounts/favors to induce insurance purchase
Soliciting/negotiating insurance implies licensure

Sharing commission

Allowed between licensed producers in same line
NAIC model also permits payment to agencies or non-selling persons

Twisting

Misrepresentation to induce policy lapse/surrender/exchange
Maryland statute (§27-213) covers misleading comparisons; separate provisions for financial misrepresentation and defamation

Unfair marketing practices

Insurance Administration sets disclosure/standardization rules
Advertising cannot imply false government/organization endorsement or misstate claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes federal/state regulatory framework for merged financial services

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption; since 2021 excludes health insurance (except historical loss data sharing)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes best practices, peer review, coordinates oversight
Forms basis of national state-based regulatory system

Fair Credit Reporting Act

Governs consumer reports used in underwriting
Investigative report request: disclose to consumer within 3 days
Adverse action: consumer has 60 days to request free report/dispute errors

Privacy Act of 1974

Applies only to federal agencies, not private insurers
Insurer privacy governed by FCRA, GLBA, state law
NAIC model: authorization valid 30 months (life/health/disability) or 1 year (property/casualty)

Telemarketing

Do Not Call Registry restricts calls without permission/business relationship
Federal calling hours: 8 a.m.–9 p.m.; Maryland narrower: no calls 8 p.m.–8 a.m.
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, accurate headers/subject
Must include physical address and opt-out mechanism
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments; membership mandatory for licensed insurers
NAIC model caps: $500,000 per claimant; $10,000 for unearned premium return

Auto insurance state minimum

Minimum coverage required to legally drive
Split limit format: BI per person/BI per incident/PD per incident
Maryland minimum: 30/60/15 ($30k/$60k BI, $15k PD)

Next | 34. Massachusetts State Regulations & NAIC Insurance Law

Maryland State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Maryland resident producer’s license must:

Be at least 18 years old
Be a resident of Maryland before submitting an application

Pre-licensing course and exam

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

The NAIC’s model act limits a temporary license to 180 days. In Maryland, a temporary license expires 15 months after its effective date (Md. Code, Ins. § 10-120(e)).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

Each state sets its own renewal cycle.

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Maryland, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license.

Individuals licensed in the state of Maryland must complete continuing education prior to renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

Under the NAIC’s model act, the licensee reports a change of address to the regulator within 30 days of the change.

Company regulations

An insurance company must be authorized by the Insurance Administration to conduct business in Maryland.

Capital and surplus requirement

A company authorized to conduct insurance business in Maryland must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Maryland, the Commissioner must refuse to renew, suspend or revoke the certificate of an insurer that no longer meets its requirements because of a deficiency in assets or any other reason, and may impose a penalty of $100 to $125,000 per violation instead of or in addition to suspension or revocation (Md. Code, Ins. § 4-113(a)(2), (d)).

Duties of the Maryland Insurance Commissioner

The Commissioner oversees the department’s efforts to:

Regulate the state’s insurance companies and producers
Investigate consumer complaints about insurance coverage

The Commissioner is responsible for establishing and enforcing regulations in the Maryland insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years.
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Having willfully violated Maryland’s insurance laws, or willfully failed to comply with or violated a proper order, subpoena or regulation of the Commissioner (Md. Code, Ins. § 10-126(a)(1), (11)).
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted by final judgment in any state or federal court of a felony or a crime involving moral turpitude (Md. Code, Ins. § 10-126(a)(8)).
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Maryland.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist.

Receiving a cease and desist order does not mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

If a policy provision conflicts with Maryland law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

This includes any public communication, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Maryland in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
There is no coverage for violation of insurance regulation.

Rebating

Maryland licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair marketing practices

The Insurance Administration is responsible for establishing minimum standards for the full and fair disclosure of policy content.

They also require:

Standardization and simplification of the terms used to describe insurance coverage

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA:

Established a framework of responsibilities of federal and state regulators for these financial industries
Permits financial services companies to merge and engage in a variety of new business activities, including insurance
Attempts to address the regulatory issues raised by such combinations

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Maryland’s own law is narrower, barring telephone solicitations, including automated or recorded calls, between 8 p.m. and 8 a.m. in the called party’s time zone (Md. Code, Com. Law § 14-4502©(1))
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Each state sets the most its association pays per claim. The NAIC’s model act sets $500,000 per claimant for most covered claims and $10,000 for the return of unearned premium.

Auto insurance state minimum

The “state minimum” auto insurance is the minimum amount of car insurance you must carry in your state to legally drive a vehicle in Maryland.

It ensures that you can pay for others’ injuries and damages if you cause a car accident.
Driving without adequate coverage can result in financial repercussions such as fines, license suspensions, vehicle impoundment and even jail time.

Auto insurance is typically structured as a split limit policy with coverage minimums represented by numbers and slashes.

The first number is BI coverage per person.
The second is BI coverage per incident (if multiple people are injured).
The third is PD per incident.

In Maryland, the state minimum is 30/60/15, which would cover:

Up to $30,000 of Bodily Injury protection for each person involved in an accident
Up to $60,000 worth of Bodily Injuries per incident
Up to $15,000 of Property Damage per incident

Key points

Licensing

Minimum age 18; must be Maryland resident before applying
Since Oct. 1, 2024: no pre-approved study program required, but must pass exam
Background/fingerprint checks common before license issuance

Controlled business

Insurance on producer’s own life/property/family/employer/controlled business
License intended for public sales; states restrict license use mainly for controlled business

Non-resident license

No exam needed if licensed & in good standing in home state, applies with fees, and reciprocity exists
Address change: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of PE/exam

Temporary license

Issued without exam to keep business running (death/disability of producer, military deployment)
May require licensed sponsor
NAIC model: max 180 days; Maryland: expires 15 months after effective date

Military service

Waiver available for renewal requirements/exams/fines due to military service or long-term disability

Renewal and reinstatement

Must renew on schedule (fee + CE)
Lapsed license: NAIC model allows reinstatement within 12 months, penalty = double fee
After window closes, must requalify as new applicant

Continuing education

Required for renewal of major lines licenses
Hours set by state law, published by insurance department

Notice of change of name or address

Report address change within 30 days
Report administrative/criminal actions within 30 days of final disposition/pretrial hearing
Must notify regulator before using assumed business name

Company regulations

Insurer must obtain certificate of authority from Commissioner
Must file charter, financial statements, proof of capital/surplus, fees

Capital and surplus requirement

Must maintain minimum capital/surplus to keep certificate of authority
Maryland: Commissioner must suspend/revoke if deficient; penalty $100–$125,000 per violation

Duties of the Maryland Insurance Commissioner

Heads Maryland Insurance Administration (created 1993)
Regulates insurers/producers, investigates complaints, examines financial condition (every 5 years per NAIC model)
Can refer violations for criminal prosecution but cannot arrest, injunct, or jail

Suspend, revoke or non-renew

Grounds: false application info, fraud, felony/moral turpitude conviction, unfair trade practices, forgery, cheating on exam, prior license revocation elsewhere

Cease and desist

Ordered when producer violates insurance laws
Does not equal suspension/revocation; must stop/limit specified activity

Hearing and penalties

Entitled to notice (Maryland: 10 days) and hearing before license action
Civil penalties possible; Maryland: $100–$5,000 per violation for producers

Unfair claims settlement practices

Violations include delaying claims, failing to investigate, denying without investigation, settling below fair value
Must occur flagrantly/frequently to count as pattern violation

Policy forms

Filed with Commissioner; approval process varies (file-and-use vs. deemed approved)
Maryland: life/health forms filed 60 days ahead, deemed approved unless acted on (+30 day extension)
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to claim licensure without passing exam, via any public communication
May result in suspension/revocation of other licenses

Misrepresentation

Prohibited: inaccurate policy illustrations, incomplete benefit comparisons, inducing lapse/surrender (twisting)

False advertising

Untrue, deceptive or misleading statements about insurance business prohibited regardless of medium
Test: whether statement is misleading, not intent

Defamation

False or maliciously critical statements about insurer’s financial condition, made to injure, prohibited

Boycott, coercion and intimidation

Concerted acts restraining or monopolizing insurance business prohibited

False financial statements

Maryland: knowingly making false statements on insurance applications is a fraudulent act

Illegal inducements

Offering value beyond policy terms as inducement prohibited unless allowed by law
NAIC model allows reasonable non-cash gifts without purchase condition
Maryland cap: $50 for promotional items

Unfair discrimination

Prohibited: different treatment of same-class risks in life/health rates
Prohibited: denying coverage based on sex, marital status, race, religion, national origin
P&C: cannot deny solely for geographic location or physical/mental impairment without actuarial justification

Errors & Omissions

E&O covers honest mistakes causing client financial harm
Does not cover regulatory violations

Rebating

Maryland prohibits giving refunds/discounts/favors to induce insurance purchase
Soliciting/negotiating insurance implies licensure

Sharing commission

Allowed between licensed producers in same line
NAIC model also permits payment to agencies or non-selling persons

Twisting

Misrepresentation to induce policy lapse/surrender/exchange
Maryland statute (§27-213) covers misleading comparisons; separate provisions for financial misrepresentation and defamation

Unfair marketing practices

Insurance Administration sets disclosure/standardization rules
Advertising cannot imply false government/organization endorsement or misstate claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes federal/state regulatory framework for merged financial services

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption; since 2021 excludes health insurance (except historical loss data sharing)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes best practices, peer review, coordinates oversight
Forms basis of national state-based regulatory system

Fair Credit Reporting Act

Governs consumer reports used in underwriting
Investigative report request: disclose to consumer within 3 days
Adverse action: consumer has 60 days to request free report/dispute errors

Privacy Act of 1974

Applies only to federal agencies, not private insurers
Insurer privacy governed by FCRA, GLBA, state law
NAIC model: authorization valid 30 months (life/health/disability) or 1 year (property/casualty)

Telemarketing

Do Not Call Registry restricts calls without permission/business relationship
Federal calling hours: 8 a.m.–9 p.m.; Maryland narrower: no calls 8 p.m.–8 a.m.
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, accurate headers/subject
Must include physical address and opt-out mechanism
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments; membership mandatory for licensed insurers
NAIC model caps: $500,000 per claimant; $10,000 for unearned premium return

Auto insurance state minimum

Minimum coverage required to legally drive
Split limit format: BI per person/BI per incident/PD per incident
Maryland minimum: 30/60/15 ($30k/$60k BI, $15k PD)

Maryland State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Maryland resident producer’s license must:

Be at least 18 years old
Be a resident of Maryland before submitting an application

Pre-licensing course and exam

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

The NAIC’s model act limits a temporary license to 180 days. In Maryland, a temporary license expires 15 months after its effective date (Md. Code, Ins. § 10-120(e)).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

Each state sets its own renewal cycle.

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Maryland, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license.

Individuals licensed in the state of Maryland must complete continuing education prior to renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

Under the NAIC’s model act, the licensee reports a change of address to the regulator within 30 days of the change.

Company regulations

An insurance company must be authorized by the Insurance Administration to conduct business in Maryland.

Capital and surplus requirement

A company authorized to conduct insurance business in Maryland must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Maryland, the Commissioner must refuse to renew, suspend or revoke the certificate of an insurer that no longer meets its requirements because of a deficiency in assets or any other reason, and may impose a penalty of $100 to $125,000 per violation instead of or in addition to suspension or revocation (Md. Code, Ins. § 4-113(a)(2), (d)).

Duties of the Maryland Insurance Commissioner

The Commissioner oversees the department’s efforts to:

Regulate the state’s insurance companies and producers
Investigate consumer complaints about insurance coverage

The Commissioner is responsible for establishing and enforcing regulations in the Maryland insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years.
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Having willfully violated Maryland’s insurance laws, or willfully failed to comply with or violated a proper order, subpoena or regulation of the Commissioner (Md. Code, Ins. § 10-126(a)(1), (11)).
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted by final judgment in any state or federal court of a felony or a crime involving moral turpitude (Md. Code, Ins. § 10-126(a)(8)).
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Maryland.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist.

Receiving a cease and desist order does not mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

If a policy provision conflicts with Maryland law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

This includes any public communication, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Maryland in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
There is no coverage for violation of insurance regulation.

Rebating

Maryland licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair marketing practices

The Insurance Administration is responsible for establishing minimum standards for the full and fair disclosure of policy content.

They also require:

Standardization and simplification of the terms used to describe insurance coverage

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA:

Established a framework of responsibilities of federal and state regulators for these financial industries
Permits financial services companies to merge and engage in a variety of new business activities, including insurance
Attempts to address the regulatory issues raised by such combinations

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Maryland’s own law is narrower, barring telephone solicitations, including automated or recorded calls, between 8 p.m. and 8 a.m. in the called party’s time zone (Md. Code, Com. Law § 14-4502©(1))
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Each state sets the most its association pays per claim. The NAIC’s model act sets $500,000 per claimant for most covered claims and $10,000 for the return of unearned premium.

Auto insurance state minimum

The “state minimum” auto insurance is the minimum amount of car insurance you must carry in your state to legally drive a vehicle in Maryland.

It ensures that you can pay for others’ injuries and damages if you cause a car accident.
Driving without adequate coverage can result in financial repercussions such as fines, license suspensions, vehicle impoundment and even jail time.

Auto insurance is typically structured as a split limit policy with coverage minimums represented by numbers and slashes.

The first number is BI coverage per person.
The second is BI coverage per incident (if multiple people are injured).
The third is PD per incident.

In Maryland, the state minimum is 30/60/15, which would cover:

Up to $30,000 of Bodily Injury protection for each person involved in an accident
Up to $60,000 worth of Bodily Injuries per incident
Up to $15,000 of Property Damage per incident

Licensing

Minimum age 18; must be Maryland resident before applying
Since Oct. 1, 2024: no pre-approved study program required, but must pass exam
Background/fingerprint checks common before license issuance

Controlled business

Insurance on producer’s own life/property/family/employer/controlled business
License intended for public sales; states restrict license use mainly for controlled business

Non-resident license

No exam needed if licensed & in good standing in home state, applies with fees, and reciprocity exists
Address change: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of PE/exam

Temporary license

Issued without exam to keep business running (death/disability of producer, military deployment)
May require licensed sponsor
NAIC model: max 180 days; Maryland: expires 15 months after effective date

Military service

Waiver available for renewal requirements/exams/fines due to military service or long-term disability

Renewal and reinstatement

Must renew on schedule (fee + CE)
Lapsed license: NAIC model allows reinstatement within 12 months, penalty = double fee
After window closes, must requalify as new applicant

Continuing education

Required for renewal of major lines licenses
Hours set by state law, published by insurance department

Notice of change of name or address

Report address change within 30 days
Report administrative/criminal actions within 30 days of final disposition/pretrial hearing
Must notify regulator before using assumed business name

Company regulations

Insurer must obtain certificate of authority from Commissioner
Must file charter, financial statements, proof of capital/surplus, fees

Capital and surplus requirement

Must maintain minimum capital/surplus to keep certificate of authority
Maryland: Commissioner must suspend/revoke if deficient; penalty $100–$125,000 per violation

Duties of the Maryland Insurance Commissioner

Heads Maryland Insurance Administration (created 1993)
Regulates insurers/producers, investigates complaints, examines financial condition (every 5 years per NAIC model)
Can refer violations for criminal prosecution but cannot arrest, injunct, or jail

Suspend, revoke or non-renew

Grounds: false application info, fraud, felony/moral turpitude conviction, unfair trade practices, forgery, cheating on exam, prior license revocation elsewhere

Cease and desist

Ordered when producer violates insurance laws
Does not equal suspension/revocation; must stop/limit specified activity

Hearing and penalties

Entitled to notice (Maryland: 10 days) and hearing before license action
Civil penalties possible; Maryland: $100–$5,000 per violation for producers

Unfair claims settlement practices

Violations include delaying claims, failing to investigate, denying without investigation, settling below fair value
Must occur flagrantly/frequently to count as pattern violation

Policy forms

Filed with Commissioner; approval process varies (file-and-use vs. deemed approved)
Maryland: life/health forms filed 60 days ahead, deemed approved unless acted on (+30 day extension)
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to claim licensure without passing exam, via any public communication
May result in suspension/revocation of other licenses

Misrepresentation

Prohibited: inaccurate policy illustrations, incomplete benefit comparisons, inducing lapse/surrender (twisting)

False advertising

Untrue, deceptive or misleading statements about insurance business prohibited regardless of medium
Test: whether statement is misleading, not intent

Defamation

False or maliciously critical statements about insurer’s financial condition, made to injure, prohibited

Boycott, coercion and intimidation

Concerted acts restraining or monopolizing insurance business prohibited

False financial statements

Maryland: knowingly making false statements on insurance applications is a fraudulent act

Illegal inducements

Offering value beyond policy terms as inducement prohibited unless allowed by law
NAIC model allows reasonable non-cash gifts without purchase condition
Maryland cap: $50 for promotional items

Unfair discrimination

Prohibited: different treatment of same-class risks in life/health rates
Prohibited: denying coverage based on sex, marital status, race, religion, national origin
P&C: cannot deny solely for geographic location or physical/mental impairment without actuarial justification

Errors & Omissions

E&O covers honest mistakes causing client financial harm
Does not cover regulatory violations

Rebating

Maryland prohibits giving refunds/discounts/favors to induce insurance purchase
Soliciting/negotiating insurance implies licensure

Sharing commission

Allowed between licensed producers in same line
NAIC model also permits payment to agencies or non-selling persons

Twisting

Misrepresentation to induce policy lapse/surrender/exchange
Maryland statute (§27-213) covers misleading comparisons; separate provisions for financial misrepresentation and defamation

Unfair marketing practices

Insurance Administration sets disclosure/standardization rules
Advertising cannot imply false government/organization endorsement or misstate claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes federal/state regulatory framework for merged financial services

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption; since 2021 excludes health insurance (except historical loss data sharing)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes best practices, peer review, coordinates oversight
Forms basis of national state-based regulatory system

Fair Credit Reporting Act

Governs consumer reports used in underwriting
Investigative report request: disclose to consumer within 3 days
Adverse action: consumer has 60 days to request free report/dispute errors

Privacy Act of 1974

Applies only to federal agencies, not private insurers
Insurer privacy governed by FCRA, GLBA, state law
NAIC model: authorization valid 30 months (life/health/disability) or 1 year (property/casualty)

Telemarketing

Do Not Call Registry restricts calls without permission/business relationship
Federal calling hours: 8 a.m.–9 p.m.; Maryland narrower: no calls 8 p.m.–8 a.m.
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, accurate headers/subject
Must include physical address and opt-out mechanism
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments; membership mandatory for licensed insurers
NAIC model caps: $500,000 per claimant; $10,000 for unearned premium return

Auto insurance state minimum

Minimum coverage required to legally drive
Split limit format: BI per person/BI per incident/PD per incident
Maryland minimum: 30/60/15 ($30k/$60k BI, $15k PD)

Maryland State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Maryland resident producer’s license must:

Be at least 18 years old
Be a resident of Maryland before submitting an application

Pre-licensing course and exam

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

The NAIC’s model act limits a temporary license to 180 days. In Maryland, a temporary license expires 15 months after its effective date (Md. Code, Ins. § 10-120(e)).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

Each state sets its own renewal cycle.

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Maryland, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license.

Individuals licensed in the state of Maryland must complete continuing education prior to renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

Under the NAIC’s model act, the licensee reports a change of address to the regulator within 30 days of the change.

Company regulations

An insurance company must be authorized by the Insurance Administration to conduct business in Maryland.

Capital and surplus requirement

A company authorized to conduct insurance business in Maryland must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Maryland, the Commissioner must refuse to renew, suspend or revoke the certificate of an insurer that no longer meets its requirements because of a deficiency in assets or any other reason, and may impose a penalty of $100 to $125,000 per violation instead of or in addition to suspension or revocation (Md. Code, Ins. § 4-113(a)(2), (d)).

Duties of the Maryland Insurance Commissioner

The Commissioner oversees the department’s efforts to:

Regulate the state’s insurance companies and producers
Investigate consumer complaints about insurance coverage

The Commissioner is responsible for establishing and enforcing regulations in the Maryland insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years.
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Having willfully violated Maryland’s insurance laws, or willfully failed to comply with or violated a proper order, subpoena or regulation of the Commissioner (Md. Code, Ins. § 10-126(a)(1), (11)).
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted by final judgment in any state or federal court of a felony or a crime involving moral turpitude (Md. Code, Ins. § 10-126(a)(8)).
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Maryland.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist.

Receiving a cease and desist order does not mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

If a policy provision conflicts with Maryland law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

This includes any public communication, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Maryland in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
There is no coverage for violation of insurance regulation.

Rebating

Maryland licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair marketing practices

The Insurance Administration is responsible for establishing minimum standards for the full and fair disclosure of policy content.

They also require:

Standardization and simplification of the terms used to describe insurance coverage

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA:

Established a framework of responsibilities of federal and state regulators for these financial industries
Permits financial services companies to merge and engage in a variety of new business activities, including insurance
Attempts to address the regulatory issues raised by such combinations

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Maryland’s own law is narrower, barring telephone solicitations, including automated or recorded calls, between 8 p.m. and 8 a.m. in the called party’s time zone (Md. Code, Com. Law § 14-4502©(1))
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Each state sets the most its association pays per claim. The NAIC’s model act sets $500,000 per claimant for most covered claims and $10,000 for the return of unearned premium.

Auto insurance state minimum

The “state minimum” auto insurance is the minimum amount of car insurance you must carry in your state to legally drive a vehicle in Maryland.

It ensures that you can pay for others’ injuries and damages if you cause a car accident.
Driving without adequate coverage can result in financial repercussions such as fines, license suspensions, vehicle impoundment and even jail time.

Auto insurance is typically structured as a split limit policy with coverage minimums represented by numbers and slashes.

The first number is BI coverage per person.
The second is BI coverage per incident (if multiple people are injured).
The third is PD per incident.

In Maryland, the state minimum is 30/60/15, which would cover:

Up to $30,000 of Bodily Injury protection for each person involved in an accident
Up to $60,000 worth of Bodily Injuries per incident
Up to $15,000 of Property Damage per incident

Key points

Licensing

Minimum age 18; must be Maryland resident before applying
Since Oct. 1, 2024: no pre-approved study program required, but must pass exam
Background/fingerprint checks common before license issuance

Controlled business

Insurance on producer’s own life/property/family/employer/controlled business
License intended for public sales; states restrict license use mainly for controlled business

Non-resident license

No exam needed if licensed & in good standing in home state, applies with fees, and reciprocity exists
Address change: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of PE/exam

Temporary license

Issued without exam to keep business running (death/disability of producer, military deployment)
May require licensed sponsor
NAIC model: max 180 days; Maryland: expires 15 months after effective date

Military service

Waiver available for renewal requirements/exams/fines due to military service or long-term disability

Renewal and reinstatement

Must renew on schedule (fee + CE)
Lapsed license: NAIC model allows reinstatement within 12 months, penalty = double fee
After window closes, must requalify as new applicant

Continuing education

Required for renewal of major lines licenses
Hours set by state law, published by insurance department

Notice of change of name or address

Report address change within 30 days
Report administrative/criminal actions within 30 days of final disposition/pretrial hearing
Must notify regulator before using assumed business name

Company regulations

Insurer must obtain certificate of authority from Commissioner
Must file charter, financial statements, proof of capital/surplus, fees

Capital and surplus requirement

Must maintain minimum capital/surplus to keep certificate of authority
Maryland: Commissioner must suspend/revoke if deficient; penalty $100–$125,000 per violation

Duties of the Maryland Insurance Commissioner

Heads Maryland Insurance Administration (created 1993)
Regulates insurers/producers, investigates complaints, examines financial condition (every 5 years per NAIC model)
Can refer violations for criminal prosecution but cannot arrest, injunct, or jail

Suspend, revoke or non-renew

Grounds: false application info, fraud, felony/moral turpitude conviction, unfair trade practices, forgery, cheating on exam, prior license revocation elsewhere

Cease and desist

Ordered when producer violates insurance laws
Does not equal suspension/revocation; must stop/limit specified activity

Hearing and penalties

Entitled to notice (Maryland: 10 days) and hearing before license action
Civil penalties possible; Maryland: $100–$5,000 per violation for producers

Unfair claims settlement practices

Violations include delaying claims, failing to investigate, denying without investigation, settling below fair value
Must occur flagrantly/frequently to count as pattern violation

Policy forms

Filed with Commissioner; approval process varies (file-and-use vs. deemed approved)
Maryland: life/health forms filed 60 days ahead, deemed approved unless acted on (+30 day extension)
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to claim licensure without passing exam, via any public communication
May result in suspension/revocation of other licenses

Misrepresentation

Prohibited: inaccurate policy illustrations, incomplete benefit comparisons, inducing lapse/surrender (twisting)

False advertising

Untrue, deceptive or misleading statements about insurance business prohibited regardless of medium
Test: whether statement is misleading, not intent

Defamation

False or maliciously critical statements about insurer’s financial condition, made to injure, prohibited

Boycott, coercion and intimidation

Concerted acts restraining or monopolizing insurance business prohibited

False financial statements

Maryland: knowingly making false statements on insurance applications is a fraudulent act

Illegal inducements

Offering value beyond policy terms as inducement prohibited unless allowed by law
NAIC model allows reasonable non-cash gifts without purchase condition
Maryland cap: $50 for promotional items

Unfair discrimination

Prohibited: different treatment of same-class risks in life/health rates
Prohibited: denying coverage based on sex, marital status, race, religion, national origin
P&C: cannot deny solely for geographic location or physical/mental impairment without actuarial justification

Errors & Omissions

E&O covers honest mistakes causing client financial harm
Does not cover regulatory violations

Rebating

Maryland prohibits giving refunds/discounts/favors to induce insurance purchase
Soliciting/negotiating insurance implies licensure

Sharing commission

Allowed between licensed producers in same line
NAIC model also permits payment to agencies or non-selling persons

Twisting

Misrepresentation to induce policy lapse/surrender/exchange
Maryland statute (§27-213) covers misleading comparisons; separate provisions for financial misrepresentation and defamation

Unfair marketing practices

Insurance Administration sets disclosure/standardization rules
Advertising cannot imply false government/organization endorsement or misstate claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes federal/state regulatory framework for merged financial services

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption; since 2021 excludes health insurance (except historical loss data sharing)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes best practices, peer review, coordinates oversight
Forms basis of national state-based regulatory system

Fair Credit Reporting Act

Governs consumer reports used in underwriting
Investigative report request: disclose to consumer within 3 days
Adverse action: consumer has 60 days to request free report/dispute errors

Privacy Act of 1974

Applies only to federal agencies, not private insurers
Insurer privacy governed by FCRA, GLBA, state law
NAIC model: authorization valid 30 months (life/health/disability) or 1 year (property/casualty)

Telemarketing

Do Not Call Registry restricts calls without permission/business relationship
Federal calling hours: 8 a.m.–9 p.m.; Maryland narrower: no calls 8 p.m.–8 a.m.
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, accurate headers/subject
Must include physical address and opt-out mechanism
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments; membership mandatory for licensed insurers
NAIC model caps: $500,000 per claimant; $10,000 for unearned premium return

Auto insurance state minimum

Minimum coverage required to legally drive
Split limit format: BI per person/BI per incident/PD per incident
Maryland minimum: 30/60/15 ($30k/$60k BI, $15k PD)