Current through Register Vol. 51, No. 19, September 20, 2024
A. Printing Specifications; Provision of Form to Insured. The written disclosure required by Insurance Article, §
3-308, Annotated Code of Maryland, shall be:
(1) In the form set forth in §B of this regulation in at least 14-point type;
(2) On a separate piece of paper that:
(a) Contains only the disclosure; and
(b) Is attached to the insurance contract or binder; and
(3) Provided to the insured at the time of the initial purchase or delivery of an insurance contract or binder from a surplus lines insurer and at each renewal of the insurance contract.
B. Form.
DISCLOSURE REGARDING SURPLUS LINES INSURANCE.
Please Read the Following Carefully Before Purchasing Insurance From a Surplus Lines Insurer.
This policy is issued by a surplus lines insurer that has been approved by the Maryland Insurance Administration to issue insurance policies in the surplus lines insurance market. Surplus lines insurers are not under the jurisdiction of the Maryland Insurance Administration and do not possess a certificate of authority to transact insurance business in the State of Maryland. Because surplus lines insurers are not under the jurisdiction of the Maryland Insurance Administration, your ability to seek assistance from the State if you have a problem with your insurance company is limited.
Property and Casualty Insurance Guaranty Corporation and Maryland Life and Health Insurance Guaranty Corporation provide funds that permit certain claimants or policyholders to receive payment of covered claims if their insurance company becomes insolvent (i.e., bankrupt) and is unable to pay the claims. However, these funds do not apply to surplus lines insurers, as a surplus lines insurer is not a member insurer of the Property and Casualty Insurance Guaranty Corporation or the Maryland Life and Health Insurance Guaranty Corporation. If a surplus lines insurer becomes insolvent (i.e. bankrupt), any claim that you have against the surplus lines insurer will not be covered by the funds administered by Property and Casualty Insurance Guaranty Corporation and Maryland Life and Health Insurance Guaranty Corporation.
If you have any questions regarding this disclosure or surplus lines insurance, please contact the Maryland Insurance Administration at 410-468-2340.
C. In addition to the disclosure required by §B of this regulation, the surplus lines broker shall:
(1) Provide a clear and conspicuous written disclosure to the prospective insured of:
(a) Any inspection fee;
(b) The total amount of the policy fee;
(c) The premium tax on the policy;
(d) Any financial interest of the person performing the inspection, if applicable;
(e) Whether the surplus lines broker will receive compensation from the person that performs the inspection; and
(f) Any charge for actual expenses incurred by the surplus lines broker for payment of the premium, policy fee, and any other fees and taxes relating to the policy by use of a credit card; and
(2) Notify the prospective insured of the option to obtain the inspection from another person who meets the requirements of or is approved by the surplus lines broker.
D. Signature of Insured on Disclosure Form for Policies Covering Residential Property or a Condominium.
(1) This section applies only to the written disclosure form for an insurance policy covering residential property or a condominium.
(2) In addition to the text required by §B of this regulation, the disclosure form for an insurance policy covering residential property or a condominium shall include blanks for the insured's signature, the insured's printed name, and the execution date.
(3) Whenever residential property or condominium insurance is placed or renewed with a surplus lines insurer, the originating insurance producer shall obtain the signature of the insured, the insured's printed name, and the execution date on the disclosure form.
(4) On execution, the originating insurance producer shall:
(a) Send the original copy of the disclosure form to the surplus lines broker;
(b) Provide a copy of the disclosure form to the insured; and
(c) Keep a copy of the disclosure form in the files of the originating insurance producer for at least 3 years after the date of execution by the insured.
(5) The surplus lines broker shall:
(a) Retain the original copy of the disclosure form for at least 3 years after the date of execution by the insured; and
(b) Make the disclosure form available for inspection by the Commissioner on request.
E. Disclosure Form Requirements for Policies Not Covering Residential Property or a Condominium.
(1) This section applies only to a written disclosure form for an insurance policy that does not cover residential property or a condominium.
(2) The surplus lines broker or the originating insurance producer shall provide the insured with the written disclosure required by §B of this regulation in the manner specified by §A of this regulation.
(3) The surplus lines broker or the originating insurance producer shall:
(a) Certify on a form approved by the Commissioner that the disclosure notice required by this regulation has been delivered to the insured with the insurance policy or binder; or
(b) Obtain from the insured written acknowledgment of receipt of the disclosure form.
(4) If the surplus lines broker or the originating insurance producer obtains written acknowledgement of receipt of the disclosure form, the surplus lines broker or the originating insurance producer shall:
(a) Retain for at least 3 years a copy of the written acknowledgment of receipt from the insured; and
(b) Make the acknowledgment available for inspection by the Commissioner on request.
