2916

LAWS OF MARYLAND

Ch. 610

rates have risen to and beyond the point of affordability, they
do not accurately reflect the degree of risk involved; and

WHEREAS, Many uninsured motorists do not retain coverage
because they cannot afford the rates currently charged by the
Fund and by private insurers; and

WHEREAS, The Maryland Automobile Insurance Fund normally
experiences losses caused by its insured motorists, the Fund's
problems are exacerbated by the addition of annual losses caused
by uninsured motorists which have, in turn, required the
imposition of a surcharge on all private policies from an average
of $3 to over an average of $13 per year; and

WHEREAS, The Fund has a current deficit in excess of $38
million; and

WHEREAS, It is the policy of the State of Maryland that
effective steps must be taken to eliminate the problem of the
uninsured motorists; and

WHEREAS, Current mechanisms to enforce the compulsory
automobile insurance laws are cumbersome and create an
unnecessary burden on the vehicle owners who comply with the law;
and

WHEREAS, The burden on the public of complying with the
current insurance verification laws can be alleviated by first
requesting insurance information of insurers and by amending the
laws so that the vehicle owner is required to verify insurance
coverage only if the owner's insurer cannot verify whether the
owner is insured; and

WHEREAS, The Maryland Automobile Insurance Fund and the
Insurance Commissioner have been constrained in their efforts to
address the financial pressures of a changing residual automobile
insurance market; and

WHEREAS, Rates charged by the Maryland Automobile Insurance
Fund must adequately reflect the degree of risk involved but must
also remain affordable to that segment of the population which is
dependent on the Fund for automobile insurance; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 48A - Insurance Code

243C.

(a) (1) The executive director shall determine the premiums
to be charged on policies issued by the Fund, subject to approval
by the Commissioner of Insurance. The provisions of § 242(c) of
this article shall apply to the determination of premiums by the
executive director, but nothing in said § 242(c) or in this