Auto insurance fund proposal withdrawn in Maryland

Auto Insurance

MAIF is no longer moving forward on the effort to gain policy rights within the state.

The Maryland Automobile Insurance Fund (MAIF) – which is considered to be the auto insurance market of last resort within that state – has withdrawn the proposal that it previously put forward in order to obtain “sole and exclusive property” rights for all of the policies in that market.

That proposal had initially been presented by MAIF approximately two months ago.

The decision made by MAIF to remove its auto insurance proposal has been welcomed by the partnership of agents’ associations in Pennsylvania, Delaware, and Maryland, called the Insurance Agents & Brokers (IA&B). They referred to the decision as being “a win for the independent agency system.”

Auto InsuranceMAIF explained that they have received a considerable amount of helpful feedback from auto insurance agents.

The executive director of MAIF, M. Kent Krabbe, stated that they have withdrawn the changes to the regulation that they have proposed and that they have obtained “a lot of good feedback from the agent community.”

The proposal, itself, was the result of an event that occurred earlier this year, when a major auto insurance provider within the market was shut down by regulators without providing MAIF with any notice. That situation had an effect on the policies of more than 2,000 people covered through the market. MAIF described those policies as being high-maintenance, in which the majority involved a monthly payment had to be regularly made to a premium finance firm.

MAIF explained that as exclusive ownership was initially claimed by the receiver, the auto insurance policyholders who were affected by this change didn’t have anyone to manage or service the policies that they held. This caused many of them to cancel their coverage, contributing to the rising trend in uninsured motorists on the roads of Maryland.

As the receiver had been asserting its own right for the sale of the book business as a part of the closed agency’s assets, it stopped MAIF from being able to provide guidance and service to those customers for the first while. Therefore, the proposal had been presented as an effort to stop its auto insurance customers from being left for periods in which they essentially lost coverage.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.