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Bill > HB1069


MD HB1069

MD HB1069
Life and Health Insurance Policies and Annuity and Health Maintenance Organization Contracts - Discretionary Clauses - Prohibition


summary

Introduced
02/05/2025
In Committee
04/04/2025
Crossed Over
03/12/2025
Passed
04/07/2025
Dead
Signed/Enacted/Adopted
05/06/2025

Introduced Session

2025 Regular Session

Bill Summary

Prohibiting the use of discretionary clauses in life insurance policies, health insurance policies, annuity contracts, and health maintenance organization contracts.

AI Summary

This bill prohibits insurance carriers, including insurers, nonprofit health service plans, and health maintenance organizations (HMOs), from selling, delivering, or issuing insurance policies in Maryland that contain discretionary clauses. A discretionary clause is a provision that allows the carrier to have sole discretion in interpreting the terms of the policy or establishing review standards that conflict with state laws. The bill specifically covers health insurance policies, life insurance policies, annuity contracts, health maintenance organization contracts, and disability insurance policies. The new law will apply to all policies, contracts, and health benefit plans issued, delivered, or renewed in the state on or after January 1, 2026, and the bill itself will take effect on October 1, 2025. By eliminating discretionary clauses, the bill aims to protect consumers by ensuring that insurance carriers cannot unilaterally interpret policy terms in a way that might unfairly disadvantage policyholders.

Committee Categories

Budget and Finance, Health and Social Services

Sponsors (25)

Last Action

Approved by the Governor - Chapter 396 (on 05/06/2025)

bill text


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