The Maryland Insurance Administration had announced that it has come to its attention that several insurers and premium finance companies are not necessarily providing the minimum days’ notice as prescribed by the state’s statutes before companies cancel, choose not to renew, increase the premium, or reduce coverage on a property and casualty insurance policy.
The agency reminded insurers and premium finance companies Feb. 16 through Bulletin No. 16-08 that when a statute stipulates that an action may not be taken unless a minimum number of days’ notice is first provided, the companies must at least provide the full number of days specified in the statute for the notice to be compliant.
The Maryland Insurance Administration noted that a cancellation for the non-payment of premium and a notice of intent to cancel for non-payment of premium issued by a premium finance company would require at the minimum 10 days’ notice. Other actions would require at least 45 days’ notice.
In addition, the bulletin explained that the date that a notice is sent—whether sent via email or mail—should not be included in the calculation used to determine when a notice needs to be delivered or mailed in order to comply with the requirements.
Maryland Insurance Administration spokesman Joseph A. Sviatko pointed out that regulators have discovered cases where insurers did not follow the statute, hence the reminders.
“Investigators discovered that a premium finance company didn’t give 10 days’ notice for their notice of intent to cancel as required by §23-402, as the notice indicated the policy would be cancelled 12:01 am of the 10th day after the notice was sent,” Sviatko said.
