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PARRIS N. GLENDENING, Governor
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S.B. 366
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and generally relating to disclosure requirements for surplus lines brokers.
BY repealing and reenacting, with amendments,
Article - Insurance
Section 27-216(d)
Annotated Code of Maryland
(1997 Volume and 2001 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:
Article - Insurance
27-216.
(d) (1) Notwithstanding subsection (a) of this section, a surplus lines broker
that holds a certificate of qualification under Title 3, Subtitle 3 of this article may
charge a reasonable policy fee not exceeding:
(i) $100 on each personal lines policy procured by a licensed
insurance producer to whom the surplus lines broker pays a commission; or
(ii) $250 on each commercial lines policy procured by a licensed
insurance producer to whom the surplus lines broker pays a commission.
(2) The policy fee charged in accordance with this subsection must be
reasonably related to the cost of underwriting, issuing, processing, and servicing the
policy by the surplus lines broker for the surplus lines insurer.
(3) Notwithstanding subsection (a) of this section, a surplus lines broker
that holds a certificate of qualification under Title 3, Subtitle 3 of this article may
recoup from the prospective insured the actual cost of an inspection required for the
placement of surplus lines insurance if:
(i) the inspection is required by the surplus lines insurer;
(ii) the cost of the inspection is actually incurred by the surplus
lines broker and not retained by the surplus lines broker; AND
(iii) [the surplus lines broker does not have a financial interest in
and does not receive compensation from the person that performs the inspection; and
(iv) ] the cost of the inspection is documented and verifiable.
(4) Regardless of the number of insurers participating on a risk:
(i) only one inspection fee may be charged to recoup the actual cost
of an inspection under paragraph (3) of this subsection for each policy or certificate of
coverage; and
(ii) only one policy fee may be charged under paragraph (1) of this
subsection for each policy or certificate of coverage.
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- 4545 -
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