HB1098 revises Maryland law governing the Maryland Automobile Insurance Fund (MAIF) and creates a one-year automobile insurance affordability study. The bill requires MAIF to calculate and report its risk-based capital (RBC) level under the state insurance solvency framework, and beginning December 31, 2026, to maintain total adjusted capital at or above its company action level RBC. If MAIF falls below specified capital thresholds, it must file an RBC plan, and the Insurance Commissioner must review that plan for adequacy.
The bill also temporarily subjects MAIF’s premium-setting to prior-approval rate regulation under Title 11, Subtitle 2 during July 1, 2025 through December 31, 2025, and again after January 1, 2026 if MAIF’s most recent RBC report shows insufficient capital. It preserves MAIF’s ability to base premiums on points and prior claims experience, clarifies treatment of commercial coverage, and expands requirements around installment payment plans, including consumer disclosures about payment options. In addition, the bill authorizes the Fund’s Board of Trustees to certify a limited assessment for calendar year 2025 operating results, up to $20 million.
A separate section directs the Maryland Insurance Administration to convene a workgroup to study the affordability of private passenger automobile insurance, premium increases, transparency, definitions of affordability, methods for incorporating affordability into rate setting, and the financial status of insurers, including possible responses to excess profits. The workgroup must include legislative, regulatory, industry, consumer, and producer representatives and report by January 1, 2026. That study section is temporary and sunsets on June 30, 2026.
The overall sentiment reflected by the bill’s enactment and strong floor votes appears generally supportive, with broad bipartisan approval in both chambers. The measure addresses a politically sensitive issue—auto insurance affordability—while also emphasizing solvency oversight and consumer information. The combination of regulatory tightening for MAIF and a study of broader market affordability suggests an attempt to balance consumer relief, insurer stability, and rate-setting transparency.
The main points of contention are likely the extent of state intervention in insurance pricing and the temporary application of prior-approval rate regulation to MAIF, which can affect how quickly premiums respond to market conditions. Consumer advocates may favor the affordability study and disclosure requirements, while insurers and other industry stakeholders may be more cautious about rate regulation, solvency thresholds, and any discussion of excess profits. The inclusion of reinsurance industry input indicates that market participants were expected to have a role in shaping the study’s recommendations.
The bill amends the Insurance Article by adding new RBC reporting and capital-maintenance requirements for the Maryland Automobile Insurance Fund and by revising MAIF premium-setting provisions to incorporate temporary prior-approval rate regulation under certain conditions. It also expands consumer disclosure obligations for payment options and authorizes a limited 2025 assessment certification by MAIF’s Board of Trustees. Separately, it creates a one-year workgroup within the Maryland Insurance Administration to study private passenger auto insurance affordability and report recommendations to the Governor and General Assembly.
The bill appears to have been received favorably overall, as reflected by its passage with strong vote margins in both chambers. Its structure suggests a compromise approach: tighter oversight of MAIF and a formal study of affordability concerns, rather than an immediate broad overhaul of the auto insurance market. The broad support indicates general agreement that auto insurance affordability and MAIF solvency warranted legislative attention.
Likely areas of disagreement center on how much authority the state should exercise over MAIF’s rates and capital standards, and whether affordability should be addressed through regulation, market oversight, or both. Consumer advocates are likely to support the affordability study, transparency measures, and limits on premium burdens, while insurers and trade associations may be concerned about prior-approval rate regulation, references to excess profits, and any precedent for constraining pricing flexibility. The bill’s inclusion of reinsurance stakeholders suggests recognition that the affordability problem has multiple market causes and that industry input was necessary.