Maryland Acting Insurance Commissioner Marie Grant has expressed support for legislation that would increase regulations on automobile insurance telematics programs, focusing on disclosure and data collection practices.
Speaking on the proposed measures during a Maryland Senate Finance Committee meeting, Grant highlighted a provision in the bill that would allow policyholders to correct or appeal telematics data. She said it is an important consumer protection measure.
“We actually see a lot of complaints on this issue in particular,” she said. “Folks who are enrolled in telematics programs often have pretty limited ability to appeal or challenge data with their carrier.”
She spoke on the proposed measures during a Maryland Senate Finance Committee meeting, according to a report from AM Best.
Grant noted that policyholders can typically only challenge whether they were driving when the data was recorded, rather than whether the measurements were accurate.
Other provisions in the bill would prevent telematics data from being used to justify significant rate increases, set guidelines on data collection and strengthen privacy protections. The legislation would also increase disclosure requirements for insurers and grant the commissioner authority to conduct periodic audits of telematics programs.
Sen. Alonzo Washington, who introduced the bill, said it is intended to prevent discriminatory practices and protect consumer privacy.
The Consumer Federation of America reported that 60% of US policyholders decline telematics programs due to privacy concerns, Washington said, adding that he is among those who have opted out.
The insurance industry supports voluntary participation in telematics programs, which can provide benefits to both policyholders and the public, said Jon Ward, department vice president of public affairs for the American Property Casualty Insurance Association.
“Telematics have been shown to help drivers reduce their insurance premiums by incentivizing safer driving,” Ward said in an emailed statement. “This also reduces the likelihood of traffic accidents.”
The Maryland Insurance Administration declined to comment beyond Grant’s testimony. A spokesperson said the administration is studying the issue and preparing a report on the impact of telematics on the state’s insurance market.
In November, a draft bulletin issued by the Maryland Insurance Administration that mandates detailed disclosures about factors affecting automobile insurance premium increases tied to telematics programs faced pushback from key industrial players, including State Farm Mutual Automobile Insurance and several trade associations.
According to the critics, the new rules would duplicate existing disclosures provided when policyholders enroll in telematics programs.
“[T]he requirement that the insurer must be ‘able to provide all relevant data about the insured that was measured through the telematics program’ could threaten the viability of many companies’ telematics programs and the discounts they offer to consumers,” said Nancy Egan, American Property Casualty Insurance Association’s vice president of state government relations for the mid-Atlantic.
