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Bill

HB 1159

Insurance - Property and Casualty Insurance - Minimum Acceptable Loss Ratio and Premium Refunds

2025 Regular Session Introduced by Terry Baker and 2 co-sponsors

Maryland bill requires property/casualty insurers to maintain minimum loss ratios and refund policyholders when profits exceed specified thresholds.

Hearing 2/26 at 1:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · HB 1159

Legislative bill overview

HB 1159 establishes minimum acceptable loss ratios for property and casualty insurers operating in Maryland and requires premium refunds when insurers exceed specified profit thresholds. The bill aims to ensure insurers return excess profits to policyholders when claims paid fall below required percentages of collected premiums.

Why is this important

Property and casualty insurance (homeowners, auto, etc.) represents a significant household expense for Maryland residents. This bill addresses consumer concerns about insurance company profitability by creating mechanisms to return money when insurers perform better financially than minimum standards require, potentially reducing insurance costs for consumers.

Potential points of contention

  • Insurance industry competitiveness: Mandated loss ratios and refund requirements could reduce insurers' financial flexibility, potentially causing some carriers to exit Maryland's market or increase baseline premiums to offset mandatory refunds
  • Definition and calculation complexity: The bill's effectiveness depends heavily on how "minimum acceptable loss ratio" and profit thresholds are defined and calculated, which could create ambiguity in implementation and litigation
  • Rate-setting implications: Existing insurance regulations already involve rate approval processes; this bill may conflict with current regulatory frameworks or create overlapping requirements that complicate rate justification

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

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