Bill > HB1159

This bill establishes a new regulation for property and casualty insurance in Maryland that requires insurers to maintain a minimum loss ratio of 85% during each policy year. A loss ratio is a calculation that compares an insurer's incurred claims to its premium revenue, essentially measuring how much money an insurance company pays out in claims relative to the premiums it collects. If an insurer's loss ratio falls below 85%, they must provide a rebate to each insured customer. The rebate amount is calculated by multiplying the total premium revenue received from the insured (after subtracting taxes, fees, and accounting for risk adjustments and reinsurance) by the difference between the 85% minimum loss ratio and the insurer's actual loss ratio. This bill aims to ensure that insurance companies are not excessively profiting at the expense of their customers by requiring them to spend a significant portion of premium revenues on actual claims. The Maryland Insurance Commissioner is authorized to develop regulations to implement this new requirement, and the law is set to take effect on October 1, 2025.

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https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB1159?ys=2025RS