Private Passenger Motor Vehicle Insurance - Use of Programs That Measure the Operation of an Insured Vehicle
Summary
SB 984 regulates how private passenger motor vehicle insurers in Maryland may use telematics or other programs that measure an insured vehicle’s operation. The bill requires insurers to disclose, at application or renewal, any use of telematics to collect driving-habit data or otherwise measure vehicle operation, and it requires insurers that use such programs to give policyholders a process to correct or appeal data they believe is wrong. It also directs the Maryland Insurance Administration to adopt regulations limiting the types and amount of data that may be collected through these systems.
The bill further restricts how telematics data may be used in underwriting and pricing. An insurer may not use telematics data from a specific vehicle to set that vehicle’s premium or to cancel, refuse to renew, or refuse to underwrite a private passenger automobile policy. It also bars insurers from requiring participation in a vehicle-operation monitoring program as a condition of underwriting, and it prohibits premium increases in increments of less than six months for policies that measure vehicle operation. The bill adds a regulatory framework for oversight, including possible governance plans, audits, and reporting to the Insurance Administration.
Impact
SB 984 amends the Maryland Insurance Article by adding new sections governing telematics-based insurance programs and by revising existing underwriting restrictions. It creates new disclosure, data-correction, and regulatory requirements for insurers offering private passenger motor vehicle policies, while limiting the use of telematics data for premium setting and adverse underwriting actions. The bill also requires the Maryland Insurance Administration to issue implementing regulations by a specified deadline, expanding the agency’s oversight role over data collection, actuarial justification, and potential unfair discrimination in telematics-based rating practices.
Sentiment
The bill appears to have broad support in the Senate, where it passed third reading unanimously by a 47-0 vote. The committee report was favorable with amendments, suggesting the measure was generally accepted but refined during the legislative process. No committee transcripts were provided, so the available record shows consensus rather than recorded debate or division.
Contention
The main policy tension in SB 984 is between consumer privacy/fairness and insurer use of telematics for pricing and underwriting. Supporters of the bill’s approach appear to favor transparency, the ability to challenge erroneous data, and limits on data collection and use, while the restrictions on premium-setting and underwriting actions constrain insurers’ ability to rely on telematics-driven risk assessments. The bill also leaves room for regulatory oversight and actuarial review, indicating concern about unfair discrimination and data accuracy rather than a complete ban on telematics.