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SB 893

Establishing offense of assault upon service animal

2025 Regular Session Introduced by Ryan Weld

SB 893 tightens homeowner’s insurance oversight by expanding MIA enforcement, raising claims-handling standards, and increasing exams and reporting requirements for insurers.

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Bill Summary · SB 893

SB 893 — Insurance: Enforcement, Impaired Entities, Homeowner’s Insurance, and Unfair Claim Settlement Practices (Summary)

Status & procedure
- Title (short): Insurance – Enforcement, Impaired Entities, Homeowner’s Insurance Policies, and Unfair Claim Settlement Practices – Revisions.
- Introduced in the Maryland Senate (Sen. Charles), first read Jan. 28, 2025; Finance Committee hearing scheduled 3/05 at 1:00 PM.
- Bill would add and amend multiple sections of the Maryland Insurance Article (see fiscal note references).

Purpose / intent
- Strengthen insurer oversight and consumer protections by: (1) expanding Maryland Insurance Administration (MIA) examination and enforcement authorities; (2) tightening standards and oversight for homeowner’s insurers (including post‑disaster reviews); and (3) clarifying prohibited claims‑handling practices (including new unfair claim settlement violations).

Key provisions and changes
1. Enhanced enforcement authority
- MIA may impose “enhanced enforcement penalties” where an insurer demonstrates a pattern or practice of deficient claims handling after receiving “actual notice.”
- “Actual notice” includes methods specified by the insurer (e.g., claims web portal, designated email, or procedures described in policy documents).

  1. Specific claims‑handling obligations (trigger for enhanced penalties)

    • Assign a licensed adjuster and promptly investigate coverage.
    • Evaluate claims fairly and honestly using available information.
    • Request additional relevant information reasonably needed to evaluate settlement.
    • Communicate with honesty and candor; explain complex matters to unrepresented insureds.
    • Retain written/recorded communications and summaries of verbal communications for at least 2 years after final judgment or claim conclusion.
    • Provide requested claims‑handling communications to an insured within 30 days.
    • Provide reasonable accommodations for insureds covered by the ADA (at insurer expense).
    • For third‑party claims, inform the insured of key items (other potentially liable parties, estimates, excess‑judgment risk, settlement offers, etc.).
    • Preserve documentary, photographic, and forensic evidence where liability may exceed policy limits.

  2. Examination and supervisory regime

    • MIA must adopt a risk‑based methodology for scheduling insurer examinations.
    • “High‑risk” insurers must be examined at least every 3 years (previously a 5‑year baseline); average/low‑risk insurers remain on at least a 5‑year cycle.
    • Homeowner’s insurers may be subject to additional market conduct examinations under certain circumstances (e.g., following a hurricane or other triggering events).

  3. Homeowner’s insurance market protections and operational requirements

    • New duties and restrictions related to premium discounts, temporary suspension of writing new homeowner’s policies, claims‑handling manuals, and prohibitions on certain insurer actions (e.g., limits on canceling or non‑renewing policies under specified circumstances).
    • Prohibits altering an adjuster’s report without taking specified additional actions (constitutes an unfair claim settlement practice and legal violation).

  4. Reporting and interagency coordination

    • MIA must submit various quarterly and annual reports to the General Assembly.
    • Office of the Attorney General must provide certain information to MIA’s Fraud Division when it declines prosecution of referred matters.

Scope, limitations, and legal effect
- The bill expands regulator discretion but includes language clarifying that these review standards are not to be interpreted as creating a private civil cause of action or automatic violation of other unfair practice statutes.
- Many new requirements hinge on findings of patterns/practices by MIA examiners.

Who is affected
- Primary: insurers doing business in Maryland (particularly homeowner’s insurers).
- Secondary: MIA (expanded regulatory workload), the Office of the Attorney General (information sharing), insured consumers (added protections), and potentially insurers’ third‑party vendors/adjusters.

Fiscal impact (MIA)
- Fiscal note (Maryland Department of Legislative Services): MIA special‑fund expenditures increase by about $9.5 million in FY2026 (start‑up staff/contracting); recurring expenditures of roughly $12.6M+ in subsequent years.
- Special‑fund revenues estimated +$5.9M in FY2026 and ~$8.3M annually thereafter. Net fiscal effect shows increased net costs to the agency (net negative in early years; ongoing net cost thereafter).

Takeaway
- SB 893 is a comprehensive regulatory package tightening claims‑handling expectations, increasing oversight (more frequent exams for higher‑risk insurers), and expanding MIA enforcement tools — with notable operational and fiscal impacts for the regulator and compliance costs and exposure changes for insurers, especially those writing homeowner’s policies.

Compiled from official sources — confirm details with the bill’s official record.

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