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Bill

SB 95

Property and Casualty Insurance - Parametric Insurance - Regulation

2026 Regular Session Introduced by Arthur Ellis

SB 95 creates Maryland regulatory framework for parametric insurance, enabling faster disaster payouts triggered by objective events rather than individual loss assessment.

Hearing 2/04 at 1:00 p.m.
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Bill Summary · SB 95

Legislative bill overview

SB 95 establishes regulatory framework for parametric insurance products in Maryland's property and casualty insurance market. Parametric insurance pays out based on predetermined triggers (like hurricane wind speed or earthquake magnitude) rather than actual losses, streamlining claims processes. The bill defines standards, licensing requirements, and consumer protections for this emerging insurance category.

Why is this important

Parametric insurance can accelerate disaster recovery by providing faster payouts when disasters occur, potentially benefiting businesses and homeowners during emergencies. However, regulatory clarity is needed since these products work fundamentally differently from traditional insurance—triggers and payouts may not match actual individual losses, creating potential coverage gaps or windfalls.

Potential points of contention

  • Coverage mismatch risk: Policyholders could receive payouts that don't align with their actual damages, either getting less than they lost or more than their losses warrant
  • Consumer understanding: Parametric products are complex; concerns exist about whether consumers fully understand they're not purchasing traditional indemnity insurance
  • Market development vs. protection: Balancing regulatory framework that encourages innovation in faster-paying insurance against ensuring adequate consumer safeguards and transparency

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

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