Workgroup on the Affordability of Private Passenger Automobile Insurance – Extension and Alteration of Membership and Duties, the official text

WES MOORE, Governor                            Ch. 786

Chapter 786

                   (Senate Bill 865)

AN ACT concerning

Workgroup on the Affordability of Private Passenger Automobile Insurance –
                   Extension and Alteration of Membership and Duties

FOR the purpose of extending the termination date and altering the membership and
         duties of the Workgroup on the Affordability of Private Passenger Automobile
         Insurance; and generally relating to the Workgroup on the Affordability of Private
         Passenger Automobile Insurance.

BY repealing and reenacting, with amendments,
         Chapter 395 of the Acts of the General Assembly of 2025
         Section 2 and 3

                   Preamble

         WHEREAS, Chapter 395 of the Acts of the General Assembly of 2025 required the
Maryland Insurance Administration to establish a workgroup to study the affordability of
private passenger automobile insurance and to report findings and recommendations to the
Governor and the General Assembly; and

         WHEREAS, The workgroup submitted its final report on December 22, 2025, which
provided extensive background analysis of affordability, rate regulation, and the cost to
drivers in the private passenger automobile insurance market; and

         WHEREAS, The report identifies significant disparities in affordability in
majority–minority and lower–income zip codes and acknowledges that geographic and
nondriving rating factors may contribute to those disparities; and

         WHEREAS, Despite identifying territorial rating and other nondriving rating
factors as key areas of concern, the workgroup did not reach consensus and did not provide
specific legislative recommendations to modify or reform the use of territorial rating in
Maryland; and

         WHEREAS, On numerous major policy questions affecting affordability, including
territorial rating, low–cost insurance options, and relief mechanisms for high–cost
communities, the workgroup recommended only further study and deferred the
development of concrete legislative proposals; and

         WHEREAS, The General Assembly finds that additional work is necessary to
produce data–driven, actionable recommendations that will reduce premiums for Maryland
motorists, reduce unjustified geographic and racial disparities, and provide the legislature

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Ch. 786  2026 LAWS OF MARYLAND

with specific policy options to reform rating practices in the private passenger automobile
insurance market; now, therefore,

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

                                       Chapter 395 of the Acts of 2025

         SECTION 2. AND BE IT FURTHER ENACTED, That:

         (a) (1) The Maryland Insurance Administration shall establish a workgroup
to study:

                           (i) the affordability of private passenger automobile insurance in
the State, including factors that contribute to premium rate increases and trends in rate
increases;

                           (ii) policy options to provide greater transparency regarding
automobile insurance premiums and to increase the affordability of automobile insurance
in the State;

                           (iii) ways in which the term “affordability” has been or may be
defined in the context of the establishment of private passenger automobile insurance
premium rates;

                           (iv) methodologies by which affordability can be considered in
establishing private passenger automobile insurance rates consistent with rate making
principles codified in the Insurance Article; and

                           (v) the current financial status of private passenger automobile
insurers in the State and potential options to address excess profits.

                  (2) In conducting the study under paragraph (1) of this subsection, the
workgroup shall seek and consider input from relevant stakeholders, including the
reinsurance industry.

                (3) (I) THE SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH,
THE WORKGROUP SHALL DEVELOP, THROUGH A PROCESS INVOLVING RECORDED
VOTING, DATA–DRIVEN, CONCRETE LEGISLATIVE RECOMMENDATIONS TO REDUCE
PREMIUMS, INCLUDING SPECIFIC RECOMMENDATIONS REGARDING THE USE OF

TERRITORIAL RATING AND OTHER RATING FACTORS THAT MAY CONTRIBUTE TO

DISPARATE IMPACTS.

                         (II) IN DEVELOPING THE SPECIFIC RECOMMENDATIONS

REGARDING THE USE OF TERRITORIAL RATING AND OTHER RATING FACTORS

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WES MOORE, Governor  Ch. 786

UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH, THE WORKGROUP SHALL

CONSIDER THE IMPACT OF ANY MODIFICATIONS OR ALTERNATIVE RATING

APPROACHES ON RATES ACROSS THE STATE.

         (b) The workgroup consists of the following members:

                  (1) one member of the Senate of Maryland who is a member of the Finance
Committee, appointed by the President of the Senate;

                  (2) one member of the House of Delegates who is a member of the
[Economic Matters] JUDICIARY Committee, appointed by the Speaker of the House;

                  (3) the Maryland Insurance Commissioner or the Commissioner’s
designee;

                  (4) the Executive Director of the Maryland Automobile Insurance Fund, or
the Executive Director’s designee; and

                  (5) the following members, appointed by the chair of the workgroup:

                           (i) one representative of an automobile insurer or automobile
insurer trade association;

                           (ii) one representative of a consumer advocacy group that is active
in the area of automobile insurance; [and]

                           (iii) one representative of private passenger automobile insurance
producers in the State; AND

                         (IV) ONE REPRESENTATIVE OF THE NATIONAL ASSOCIATION OF
MUTUAL INSURANCE COMPANIES;

                         (V) ONE ACTUARY WHO IS A MEMBER OF THE AMERICAN
ACADEMY OF ACTUARIES; AND

                         (IV) (VI) TWO REPRESENTATIVES OF A NONPROFIT RESEARCH

OR CONSUMER ADVOCACY ORGANIZATION WITH DEMONSTRATED EXPERTISE IN

AUTOMOBILE INSURANCE RATING PRACTICES AND AFFORDABILITY.

         (c) The Maryland Insurance Commissioner or the Commissioner’s designee shall
chair the workgroup.

        (d) (1) On or before January 1, 2026, the workgroup shall report its findings
and recommendations to the Governor and, in accordance with § 2–1257 of the State
Government Article, the General Assembly.

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Ch. 786  2026 LAWS OF MARYLAND

                (2) ON OR BEFORE JANUARY 1, 2027, THE WORKGROUP SHALL

SUBMIT AN UPDATED REPORT OF ITS FINDINGS AND RECOMMENDATIONS THAT

INCLUDES THE RECOMMENDATIONS REQUIRED UNDER SUBSECTION (A)(3) OF THIS
SECTION TO THE GOVERNOR AND, IN ACCORDANCE WITH § 2–1257 OF THE STATE
GOVERNMENT ARTICLE, THE GENERAL ASSEMBLY.

         SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2025. Section 2 of this Act shall remain effective for a period of [1 year] 2 YEARS and, at
the end of June 30, [2026] 2027, Section 2 of this Act, with no further action required by
the General Assembly, shall be abrogated and of no further force and effect.

         SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June
1, 2026.

Approved by the Governor, May 26, 2026.

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