MARYLAND INSURANCE ADMINISTRATION

ORIGIN & FUNCTIONS


The Maryland Insurance Administration began in 1872 as the Insurance Department under the Comptroller of the Treasury (Chapter 388, Acts of 1872). Renamed the State Insurance Department, it became an independent agency in 1878 (Chapter 106, Acts of 1878). As the Insurance Division, it moved to the Department of Licensing and Regulation in 1970 (Chapter 402, Acts of 1970). It was reorganized as the Maryland Insurance Administration, an independent agency, in 1993 (Chapter 538, Acts of 1993).

The Administration is directed by the Maryland Insurance Commissioner who ensures that all insurance laws of the State are faithfully executed. The Commissioner authorizes and licenses insurance companies, agents, brokers, adjusters, and advisors for fire, casualty, life, accident, health, title and other insurance and annuities. The Commissioner also approves all insurance policies offered for sale in Maryland by authorized companies, authorizes rating bureaus and advisory organizations, and approves or rejects the rates for most lines of insurance. With Senate advice and consent, the Commissioner is appointed by the Governor.

Periodically, the Administration examines all companies organized under the laws of Maryland and scrutinizes nonresident companies doing business in the State. The Administration also investigates and resolves consumer complaints and questions concerning insurance companies operating in Maryland (Code 1957, Art. 48A, secs. 14-16).

The Administration is organized into eight sections: Consumer Complaint Investigation; Examination and Auditing; Fiscal and Support Services; Insurance Fraud Division; Licensing; Life and Health; Professional and Consumer Services; and Property and Casualty.

CONSUMER COMPLAINT INVESTIGATION SECTION

In September 1997, the Consumer Complaint Investigation Section was formed by merging the Inquiry and Investigation units of the Life and Health Section and the Property and Casualty Section. The Consumer Complaint Investigation Section investigates and resolves complaints made by insurance policyholders, claimants, and beneficiaries. The Section also provides insurance information to the public.

The Section works through four units: Consumer Resources; Life and Health; Property and Casualty; and Property and Casualty Enforcement.

EXAMINATION & AUDITING SECTION

The Examination and Auditing Section licenses all insurance companies conducting business in Maryland. It conducts financial examinations of licensed insurers as often as the Commissioner deems advisable, but at least every five years. In addition, the Section performs audits of the annual statements and quarterly and annual premium tax reports of insurers.

Under the Section are Admissions, Auditing and Financial Analysis, and Financial Examination.

INSURANCE FRAUD DIVISION

The Insurance Fraud Division was established as a unit within the Department of Licensing and Regulation in 1992 by the Governor (Executive Order 01.01.1992.24). The unit transferred to the Office of the Governor in 1993 (Chapter 538, Acts of 1993; Executive Order 01.01.1994.16). In July 1995, the unit became part of the Maryland Insurance Administration.

In cooperation with the Department of State Police and the Office of the Attorney General, the Unit investigates and prosecutes individuals who commit insurance fraud.

LICENSING SECTION

Formed in 1997, the Licensing Section has two units: Agent and Broker Licensing, and Licensing Compliance and Investigation.

AGENT & BROKER LICENSING UNIT
The Agent and Broker Licensing Unit oversees the administration of examinations to agents, brokers, insurance advisors, and public adjusters. To those who qualify, it issues certificates. The Unit also renews certificates of qualification, and processes insurance company requests for agent appointments and terminations.

LICENSING COMPLIANCE & INVESTIGATIVE UNIT
The Licensing Compliance and Investigative Unit conducts background investigations of applicants for agent and broker certificates of qualification, as well as of officers, directors and major stockholders of insurance companies licensed in Maryland. The Unit also verifies that agents and brokers meet continuing education requirements.

LIFE & HEALTH SECTION

The Life and Health Section reviews every life, health and dental insurance policy used in Maryland. The Section also reviews each annuity contract and each health maintenance organization (HMO) subscriber and provider contract used in Maryland. To ensure that premium rates are not excessive, inadequate, or discriminatory, the Section reviews initial rate filings by insurers. Sales and underwriting practices, advertising materials, and processing of claims of life and health insurance companies operating in Maryland also are examined by the Section. After each examination, the Section issues a market conduct report.

Under the Section are two units: Market Conduct Examinations; and Rate and Forms Review.

PROFESSIONAL & CONSUMER SERVICES

Professional and Consumer Services provides information to the public through consumer outreach programs and publications (a quarterly newsletter and premium rate guides). In addition, the Section conducts administrative services, including personnel management, training, and facility support services.

PROPERTY & CASUALTY SECTION

The Property and Casualty Section reviews policy forms for property, casualty, surety, mortgage guaranty and title insurance used in Maryland. The Section reviews rate filings to ensure the fairness of premium rates. The Section also reviews nonfinancial activities of property and casualty insurers and issues a market conduct report after each examination.

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 Maryland Manual On-Line, 2000

July 18, 2000   
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