Department of Legislative Services
Maryland General Assembly
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 117 (Delegate Dumais)
Economic Matters Finance
Insurance - Industry Automobile Insurance Association - Board of Directors
This bill changes the nominating entity for certain members of the board of directors of the
Industry Automobile Insurance Association (IAIA) and makes conforming changes.
Specifically, the American Insurance Administration (AIA) is no longer required to
nominate two members and the American Property Casualty Insurance Association
(APCIA) must nominate four members instead of two.
State Effect: None.
Maryland Automobile Insurance Fund (MAIF) Effect: None.
Local Effect: None.
Small Business Effect: None.
Current Law: Created by the General Assembly in 1972, MAIF is an independent
nonbudgeted State agency. Through its Insured Division, MAIF provides automobile
liability insurance to residents of the State who are unable to obtain policies in the private
insurance market. As the insurer of last resort, MAIF is not in direct competition with the
private insurance industry because a customer must generally have been turned down by
other insurers (and meet other requirements) in order to obtain a policy with MAIF.
Like other insurers, MAIF is primarily funded through premiums on the insurance policies
it issues; however, MAIF is authorized to issue an assessment paid by other motor vehicle
insurers in the State in a specified manner if it experiences a significant operating loss (as
defined by State law) and meets other specified conditions. This is to ensure MAIF’s
continued viability as the insurer of last resort. IAIA is responsible for working with the
Insurance Commissioner to calculate and administer any such assessment if it occurs.
MAIF had not issued an assessment since 1989.
Background: APCIA is one of the largest national trade associations for home, auto, and
business insurers; it represents about 60% of the nation’s property and casualty insurance
market. MAIF advises that AIA and APCIA recently merged into a single organization.
The bill, therefore, corrects the now obsolete nomination process for the board of directors
Prior Introductions: None.
Designated Cross File: SB 165 (Senator Kelley) - Finance.
Information Source(s): Maryland Insurance Administration; Maryland Automobile
Insurance Fund; Department of Legislative Services
Fiscal Note History: First Reader - January 21, 2020
mm/jc Third Reader - March 14, 2020
Revised - Amendment(s) - March 14, 2020
Analysis by: Richard L. Duncan Direct Inquiries to:
HB 117/ Page 2Statutes affected:
Text - First - Insurance - Industry Automobile Insurance Association - Board of Directors: 20-403 Insurance
Text - Third - Insurance - Industry Automobile Insurance Association - Board of Directors: 20-403 Insurance