Maryland Issues Bulletin on Commercial Policy Cancellation Notices

Property/casualty insurers writing commercial policies in Maryland are no longer required to file for approval the cancellation or nonrewal notices they send out to insureds, the Maryland Insurance Administration 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. “Such insurers are required to provide advance notice (10 days in the event of a cancellation for non-payment of premium, 45 days for cancellation or nonrenewal for other reasons) and to provide a statement of the actual reason for cancellation or nonrenewal.”

The Maryland Insurance Administration said its policy has been to require forms of such commercial cancellation and nonrenewal notices to be filed with the Administration 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 Maryland Insurance Administration 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 under the terms provided by those sections, and are still required to adhere to all other applicable notice requirements. The bulletin said the change applies only to commercial insurance policies subject to §27-603 and does not alter or remove any other filing requirements.

“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,” Maryland Insurance Administration 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.”

Topics Carriers Commercial Lines Business Insurance Maryland