Marvin Mandel, Governor                         285

this State, as to any resident of the household of the named
insured, for any reason other than nonpayment of premium,
or (ii) increase a premium for any coverage on any such
policy unless the increase is part of a general increase in
premiums approved by the Commissioner and does not result from
a reclassification of the insured, or (iii) reduce the coverage under
any such policy unless the reduction is part of a general reduction
in coverage approved by the Commissioner or to satisfy the require-
ments of Sections 539 through 542 541 of this Article, inclusive, ex-

cept in accordance with the provisions of this section.

(b)    An insurer intending to take an action subject to the pro-
visions of this section shall, on or before forty-five days prior to
the proposed effective date of the action, send written notice BY
CERTIFIED MAIL of its intended action to the insured at his last
known address. The notice shall be in triplicate, and shall state in
clear and specific terms, on a form approved by the Commissioner:

(i) the proposed action to be taken, including, if the action is
an increase in premium or reduction in coverage, the amount of
increase and the type of coverage to which it is applicable, or the
type of coverage reduced and the extent of the reduction;

(ii) the proposed effective date of the action;

(iii) the insurer's actual reason or reasons for proposing to take
such action. The statement of reasons shall be sufficiently clear and
specific so that a person of average intelligence can identify the basis
for the insurer's decision, without making further inquiry. General-
ized terms such as "personal habits", "living conditions", "poor mo-
rale", or "violation or accident record" shall not suffice to meet the
requirements of this section;

(iv) if there is coupled with the notice an offer to continue or
renew the policy in accordance with Section 240C hereof, the name
of the person or persons to be excluded from coverage, and what the
premium would be if the policy is continued or renewed with such
person or persons excluded from coverage;

(v) the right of the insured to replace the insurance through the
Maryland Automobile Insurance Fund; and the current address and
telephone number of the Fund;

(vi) the right of the insured to protest the proposed action and
request a hearing thereon before the Commissioner by signing two
copies of the notice and sending them to the Commissioner within
ten days after receipt of the notice.

(vii) that if a protest is filed by the insured, the current insur-
ance will remain in effect until a determination is made by the
Commissioner upon payment of any lawful premium due or becom-
ing due prior to the determination;

(viii) the authority of the Commissioner to award reasonable
counsel fees to the insured for services rendered to the insured in
connection with any such hearing if he finds the proposed action of
the insurer to be unjustified.

(c)    Any statement of reasons contained in the notice given pur-
suant to subsection (b)(iii) hereof shall be privileged and shall
not constitute grounds for any action against the insurer or its rep-
resentatives or any person who in good faith furnishes to the in-
surer the information upon which the statement is based.