NU Online News Service, April 13, 10:08 a.m. EDT
The Insurance Agents & Brokers of Maryland is applauding the state legislature’s passage of a law that no longer requires insurers to send notices for de minimis premium increases on commercial policies.
On April 9, the state’s General Assembly passed the legislation (SB 256 & HB 876) that the association says reduces “consumer confusion and industry frustration.”
The legislation amends a 2009 law that removed the state’s 20-percent threshold for notices of commercial-premium increases.
The 2009 law did not include an exemption for de minimis increases, which required insurers to send notices to policyholders for increases of as little as a few dollars or cents.
“This exemption will eliminate the headaches, customer confusion and loss of business that were triggered by notices of minimal increases,” says Henry “Butch” Bradley Jr., chairman of IA&B of Maryland.
The law exempts from the notice requirement premiums in excess of $1,000 with an increase over the expiring policy premium of the lesser of 3 percent or $300.
Under the law, commercial customers, including workers’ compensation policyholders, with premiums of less than $1,000 still will receive notices, as well as any customer whose premium increase is over $300.
The IA&B says it worked throughout the 2012 session to ensure the legislation’s passage and joined forces with several carrier groups, principally Selective Insurance, to advocate for the bill.
The law is scheduled to go into effect on Oct. 1.