State Farm
Agents & Associates of Maryland PAC
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Issues
Non-OEM Parts Bill: HB 574
This bill prohibits insurers from writing Non-OEM parts on current and the preceding five model years, unless the insured agrees in writing at the time of repair. It also prohibits requiring a repair facility to use specific ordering platforms for parts and other materials. Aftermarket parts competitively challenge higher cost OEM parts. OEM replacement parts are generally 30% to 40% higher than their Non-OEM counterparts. Prohibiting Non-OEM parts increases repair costs and will ultimately increase insurance costs for all Maryland consumers.
Trade Secret Protection
Previously, the state issued Bulletin 13-25. This Bulletin reversed a long standing MIA practice of providing trade secret protection to proprietary rating models. It also changed their interpretation of underwriting guidelines, thereby stripping much of the trade secret protection provided by the Maryland Insurance Code. As a result, insurer's rating and underwriting guidelines and models could now be made available for review by anyone who requests them. Insurers spend significant time and financial resources in developing, implementing, and testing their underwriting and rating guidelines and models. The bulletin hampers innovation and harms consumers as insurers are reluctant to dedicate their resources to develop new and more predictive guidelines and models for the use of their competitors. When insurers are allowed to benefit from their investment, innovation follows; enhancing both competition and consumer choice. Our actions as a PAC helped develop and pass legislation allowing Trade Secret protection.
Dog Bites
In Tracey v. Solesky, the Maryland Court of Appeals held that pure breed pit-bulls were presumed to be dangerous and vicious, thereby undermining the previous rule that liability did not attach unless the owner knew the dog was vicious. This is commonly referred to as the "one free bite" rule. This ruling also extended to landlords or other individuals in control of the premises if they knew that there was a pit-bull on the premises. The industry, legislators, animal welfare groups, and Marylanders have struggled with the effects of this decision. We do not paint all breeds with the same brush. We look at the behavior of the dog in question when underwriting or rating a risk and we would oppose a legislative fix that extends liability to all dog breeds. Several legislative fixes being floated extend strict liability to all dog owners, while restoring landlords to their pre Solesky status. Some of the proposed legislation saddles 95% of dog owners in Maryland with a strict liability standard that the Court of Appeals reserved for pit-bulls. Requiring private individuals to shoulder the financial consequences of strict liability so better financed businesses, such as apartment complexes, are protected is unfair. We support legislation that restores dog owners and/or landlords to their pre Solesky status.
Concurrent Causation
The Legislature and the MIA are considering prohibiting or limiting anti -concurrent causation clauses. The main purpose of these efforts is to restrict or prohibit homeowner insurance provisions that are designed to exclude flood losses. Maryland is a coastal state. In addition, some municipalities have water and sewer systems that are outdated and failing. We recognize, as does FEMA, how damaging these losses can be. However, requiring insurers to cover these losses would severely affect affordability and accessibility. Restricting or prohibiting anti-concurrent language in insurance policies will require private insurers to insure flood claims. If this were to pass in Maryland, it would drastically impact affordability and accessibility.