Bill > SB95

This bill, titled the "Maryland Parametric Insurance Authorization and Consumer Protection Act," establishes regulations for parametric insurance in Maryland. Parametric insurance is a type of policy that pays a predetermined benefit when a specific, objectively measurable event, like an earthquake or hurricane (referred to as a "trigger event"), occurs, regardless of the actual financial loss. The bill defines key terms such as "basis risk," which is the risk that the payout from the policy doesn't match the policyholder's actual loss, and "fallback mechanism," which is a data source used to track disaster information when primary data is unavailable. Insurers offering parametric insurance must provide applicants and policyholders with clear written statements summarizing coverage, exclusions, and a one-page fact sheet explaining basis risk. They are also required to report annual data on policies, claims, and disputes to the Commissioner. The bill outlines requirements for trigger events to be measurable and verifiable by independent sources, and it allows insurers to use proprietary indexes or fallback mechanisms for measurement, with specific conditions for proprietary indexes. Insurers must file rates, policy forms, and underwriting standards with the Commissioner, with advance notice required for underwriting standards. Additionally, the Commissioner is authorized to establish a pilot program to offer parametric insurance products, particularly to vulnerable populations and small businesses, and to expedite review for community-based programs. The bill also mandates that the Maryland Insurance Administration adopt regulations by January 1, 2027, and the Act itself takes effect on July 1, 2026.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0095?ys=2026RS