3990

VETOES

adverse loss ration ratio experience; and generally relating
to insurer's agreements with agents.

BY adding to

Article 48A - Insurance Code

Section 234B(f)

Annotated Code of Maryland

(1979 Replacement Volume and 1985 Supplement)

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

Article 48A - Insurance Code

234B.

(F) AN INSURER MAY NOT CANCEL A WRITTEN AGREEMENT WITH AN
AGENT WITH RESPECT TO PROPERTY OR CASUALTY INSURANCE BECAUSE OF
AN ADVERSE LOSS RATIO EXPERIENCE ON THAT AGENT'S BOOK OF BUSINESS
IF:

(1) THE INSURER REQUIRED THE AGENT TO SUBMIT

APPLICATIONS FOR UNDERWRITING APPROVAL AND THE INFORMATION ON

SUCH APPLICATIONS WAS SUBSTANTIALLY COMPLETE AND NOT

INTENTIONALLY INCORRECT OR MISLEADING; OR

(1) THE INSURER REQUIRED THE AGENT TO SUBMIT THE
APPLICATION FOR UNDERWRITING APPROVAL, AND ALL MATERIAL
INFORMATION ON THE APPLICATION WAS FULLY COMPLETED, AND THE AGENT
HAS NOT OMITTED OR ALTERED ANY INFORMATION PROVIDED BY THE
APPLICANT; OR

(2) THE INSURER ACCEPTED, WITHOUT PRIOR APPROVAL,

POLICIES ISSUED BY THE AGENT IF THE INFORMATION ON ANY

APPLICATION OR ON THE INSURER'S COPY OF ANY POLICY ISSUED BY THE
AGENT IS SUBSTANTIALLY COMPLETE AND NOT INTENTIONALLY INCORRECT
OR MISLEADING.

(2) THE INSURER ACCEPTED, WITHOUT PRIOR APPROVAL,
POLICIES ISSUED BY THE AGENT, IF ALL MATERIAL INFORMATION ON THE
APPLICATION OR ON THE INSURER'S COPY OF ANY POLICY ISSUED BY THE
AGENT WAS FULLY COMPLETED AND THE AGENT HAS NOT OMITTED OR
ALTERED ANY INFORMATION PROVIDED BY THE APPLICANT.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall
take effect July 1, 1986.

The Honorable Benjamin L. Cardin

May 27, 1986