3414 VETOES
House Bill No. 1037
AN ACT concerning
Insurance - Agency Terminations
FOR the purpose of protecting insurance agents and
policyholders from severe hardships caused by agency
terminations.
FOR the purpose of providing that an insurer may not
terminate an agent for certain reasons; and relating
generally to the cancellation of written agreements
with insurance agents or brokers.
May 27, 1980
Honorable Benjamin L. Cardin
Speaker of the House of Delegates
State House
Annapolis, Maryland 21404
Dear Mr. Speaker:
In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed House Bill 1037.
This measure would amend the Insurance Code to prohibit
an insurer from terminating a written agreement with an
independent agent regarding certain kinds of insurance.1/
Specifically, the insurer could terminate an agent neither
"on the basis of an adverse loss ratio of policyholders for
less than three years duration" nor "on the grounds of
volume of business placed or mix of business" for any
duration.
The proponents of the bill assert that such legislation
is necessary in order to protect both independent agents and
their insurers from unfair action on the part of the
companies. The opponents, which significantly include the
National Association of Independent Insurers and the
Independent Insurance Agents of Maryland, Inc., strongly
represent that such legislation will be detrimental to
insurance consumers and independent agents, as well as to
insurers; they also suggest that independent agents and
their clients are amply protected from unfair agent
cancellation under current Maryland law.
Section 234B(d) of the Insurance Code presently
protects independent agents from a contract cancellation or
amendment which is "arbitrary, capricious, unfair,
discriminatory, or based in whole or in part upon the race,
creed, color, sex, religion, national origin, place of
residency of the agent or broker, his applicants or
policyholders." Section 234B also prohibits an insurer from
cancelling or refusing "to renew the policy of the insured
|