H.B. 422

VETOES

FOR the purpose of altering certain authority of certain surplus lines brokers to
charge certain policy fees on certain policies procured by certain licensed
producers to whom the surplus lines broker pays a commission; specifying a
certain limit on the policy fee that a certain surplus lines broker may charge on
a policy issued by an authorized insurer that was procured by a licensed
producer certain licensed producers to whom the surplus lines broker pays a
commission; requiring the policy fee to be reasonably related to the cost of
underwriting, issuing, processing, and servicing the policy by the surplus lines
broker for the authorized insurer; authorizing a certain surplus lines broker to
recoup from a prospective insured the actual cost of an inspection required for
the placement of the insurance with an authorized insurer under certain
circumstances; specifying that only one inspection fee may be charged to recoup
the actual cost of an inspection for each policy or certificate of coverage issued by
an authorized insurer; specifying that only one policy fee may be charged for
each policy or certificate of coverage issued by an authorized insurer; and
generally relating to policy and inspection fees charged by surplus lines brokers.

BY repealing and reenacting, with amendments,
Article - Insurance
Section 27-216(d)
Annotated Code of Maryland
(2002 Replacement Volume and 2003 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 ON A POLICY ISSUED BY A SURPLUS LINES INSURER
not exceeding:

(i) $100 on each personal lines policy procured by a licensed
insurance producer NOT AFFILIATED WITH OR CONTROLLED BY THE SURPLUS LINES
BROKER AND to whom the surplus lines broker pays a commission; or

(ii) $250 on each commercial lines policy procured by a licensed
insurance producer NOT AFFILIATED WITH OR CONTROLLED BY THE SURPLUS LINES
BROKER AND to whom the surplus lines broker pays a commission.

(2) A SURPLUS LINES BROKER THAT HOLDS A CERTIFICATE OF
QUALIFICATION UNDER TITLE 3, SUBTITLE 3 OF THIS ARTICLE AND A LICENSE AS AN
INSURANCE PRODUCER UNDER TITLE 10, SUBTITLE 1 OF THIS ARTICLE MAY CHARGE
A REASONABLE POLICY FEE ON A POLICY ISSUED BY AN AUTHORIZED INSURER NOT
EXCEEDING:

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