Maryland Property and Casualty Insurers Are Reminded That Personal Injury Protection (PIP) Surcharges Are Prohibited Under State Law

Maryland Insurance Commissioner Therese Goldsmith issued a bulletin to all Maryland property and casualty insurers as a reminder that a personal injury protection (“PIP”) surcharge is prohibited under § 19-507(c) of the Insurance Article of the Annotated Code of Maryland.

An insurer that issues a policy containing PIP coverage may not impose a surcharge or re-tier the policy for a claim or payment made under that coverage and, at the time the policy is issued, shall notify the policyholder in writing of these requirements.

To assist property and casualty insurers in abiding by this law, the Maryland Insurance Administration (“Administration”) has provided the following examples of rating rules that would be compliant with § 19-507(c): 

• The rating factors for accidents, Driving While Under the Influence (DUI) violations, major violations, speeding violations and minor violations do not consider payments made under PIP coverage.
• Points assigned do not consider payments made under PIP coverage.

The following example might be considered non-compliant because the rating rule suggests the insurer may impose a surcharge if a PIP claim has been paid with another claim:

• An accident shall not be chargeable if the operator(s) received payment only under PIP.

Property and casualty insurers filing rating plans identical or similar to the third example must provide the Administration with additional documentation that no surcharge or re-tier will occur because of a PIP claim.

To view the bulletin, click on the attachment below.

Should you have any comments or questions, please contact Colodny Fass.

For nearly four decades, Colodny Fass has represented national and international clients in insurance regulatory, transactional and administrative law, insurance defense, complex commercial litigation and governmental affairs.  The Firm, headquartered in Fort Lauderdale, Florida, successfully represents property and casualty insurers, surplus lines insurers, life and health insurers, reinsurers, captives, risk retention groups, risk purchasing groups, brokers, associations, managing general agencies, agents, reinsurance intermediaries, premium finance companies and other related insurance entities. With significant regulatory experience involving a wide range of licensing and compliance issues, the Firm also handles corporate formation and financing; mergers and acquisitions; adding lines of business; state expansion applications; market conduct and financial examinations; financial issues; statutory accounting procedures; risk-based capital levels; capital infusion issues; rate, form and rule filings; as well as agent and agency matters.