ROBERT L. EHRLICH, JR., Governor                           H.B. 422

(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 NOT AFFILIATED WITH OR CONTROLLED BY THE
SURPLUS LINES BROKER AND TO WHOM THE SURPLUS LINES BROKER PAYS A
COMMISSION.

[(2)] (3) 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 OR THE
AUTHORIZED INSURER.

[(3)] (4) 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 WITH A SURPLUS LINES INSURER 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 cost of the inspection is documented and verifiable.

(5) 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 RECOUP
FROM THE PROSPECTIVE INSURED THE ACTUAL COST OF AN INSPECTION REQUIRED
FOR THE PLACEMENT OF INSURANCE WITH AN AUTHORIZED INSURER IF:

(I)      THE INSPECTION IS REQUIRED BY THE AUTHORIZED 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 COST OF THE INSPECTION IS DOCUMENTED AND
VERIFIABLE.

[(4)] (6) 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)] (4) OR (5) of this subsection for each policy or
certificate of coverage; and

(ii) only one policy fee may be charged under paragraph (1) OR (2) of
this subsection for each policy or certificate of coverage.

[(5)] (7) On a form approved by the Commissioner, the surplus lines
broker shall:

(i) make a clear and conspicuous written disclosure of:
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