HARRY HUGHES, Governor

3365

Governor

1/"If MIGA denies payment and defers to uninsured motorists
carriers, experience shows unconscionable delays are
encountered by the consumer who has a legitimate
claim," according to the proponents of the bill.

2/MIGA presently pays immediately a claimant who was insured
while driving without insurance coverage in violation
of Maryland's mandatory insurance laws.

May 1, 1980

Honorable Harry R. Hughes
The Governor's Office
State House
Annapolis, Maryland 21404

Dear Governor Hughes:

On behalf of Maryland Casualty Company, I strongly urge
that you veto Senate Bill No. 653. If allowed to pass into
law, the Bill would establish the Maryland Insurance
Guaranty Association (MIGA) as the basic guarantor of all
claims that, but for insolvency, would be adjusted and
settled by the tortfeasor's insurer. For the reasons that
follow, this statutory alteration of MIGA's responsibilities
fails to promote the claimants' best interest in prompt
payment of covered claims, raises the distinct possibility
that the insurance consumer will be forced to pay twice for
uninsured motorist coverage, and leaves a claimant's proper
course of action in seeking satisfaction of a claim against
an insolvent insurer wholly unsettled.

As amended under Senate Bill No. 653, Md. Code Ann.
Article 48A, Sections 481A and 508(a) would require any
person asserting a claim against an insolvent insurer to
look to MIGA, rather than to the person's own uninsured
motorist coverage, for satisfaction of the claim. While
this arrangement might have the facile appeal of
centralizing all claims against an insurer under
receivership, it does not promote the announced raison d'
etre for the establishment of MIGA:

"The purposes of this subtitle are to provide a
mechanism for the prompt payment of covered
claims under certain insurance policies and to
avoid financial loss to claimants or
policyholders because of the insolvency of an
insurer." Md. Code Ann. Article 48A, Section
504(a). (Emphasis supplied)

To direct the hundreds, potentially thousands, of