Maryland Issues Bulletin on Commercial Policy Termination Notices
Property/casualty insurers writing commercial policies in Maryland are no longer required to file the cancellation or nonrewal notices they send out to insureds for approval, the Maryland Insurance Administration (MIA) announced in a bulletin.
“With certain exceptions, Maryland law requires property and casualty insurers writing policies of commercial insurance to provide written notice to insureds of any intention to cancel or nonrenew such policies,” a Nov. 16 bulletin said. These insurers are required to provide to insureds advance notice (10 days in the event of a cancellation for non-payment of premium and 45 days for cancellation or nonrenewal for other reasons) and a statement of the actual reason for cancellation or nonrenewal.
The MIA said its policy has been to require forms of such commercial cancellation and nonrenewal notices to be filed with the MIA for approval. Commercial insurers have, in practice, been required to file these forms before such cancellation and nonrenewal notices have been issued.
The bulletin said that effective immediately, the MIA will no longer require insurers writing commercial policies subject to §27-603 of the Insurance Article to file forms of cancellation and nonrenewal notices required by this statue for approval.
The bulletin also explained, however, that the change merely eliminates a procedural filing requirement, and does not alter the substantive notice requirements of §27-603 of the Insurance Article or COMAR (“Code of Maryland Regulations”) 31.08.17.01 through 31.08.17.03. Commercial insurers are still required to provide advance notice of pending cancellation and nonrenewal.
“After a number industry questions to the Insurance Administration regarding the statutory requirement to have the forms to notify consumers of nonrenewal or cancellation approved, we took a second look at this and decided to issue the bulletin,” MIA spokesman Joseph A. Sviatko III said. “The insurers are still required, by statute, to notify. They now do not have to get the forms to do so approved.”