Maryland Senators Kill Bill to Ban Forced Insurance Bundling

A proposal to bar insurers from expelling customers who refuse to “bundle” their auto insurance and homeowner’s policies died in the Maryland Senate on Tuesday.

Senators on the Finance Committee voted 7-2 supporting an “unfavorable report” of HB 1105, effectively killing the legislation’s chances of making it to the state Senate floor for a vote.

The legislation was passed in the House with a unanimous March 19 vote but faced tougher scrutiny in the Senate, which hosted a March 29 hearing where state lawmakers and administrators debated with industry advocates on its purpose and efficacy.

Delegate Tom Hucker (D-Montgomery County), who sponsored the bill, said that “forced bundling” occurred in North Carolina and Arkansas late last year and led to the nonrenewal of tens of thousands of Allstate customers. He said the bill was meant to “head off the threat” of the practice in Maryland but would not impact customers looking for cheap insurance rates by voluntarily bundling to take advantage of discounts.

“Absent a law, we don’t have a hammer to use to make sure insurers don’t require bundling of policies,” said Tinna Quigley, spokeswoman for the Maryland Insurance Administration, at the hearing.

A State Farm representative said there was no evidence of the practice becoming widespread and recommended that Maryland lawmakers defer action until North Carolina administrators completed a review of the events that occurred there.

Another industry representative, Jack Andryszak of the American Insurance Association, said that even if forced bundling came to the Old Line State, nonrenewal of policyholders who did not buy both an insurers’ auto and homeowners policies would still leave those customers with other options.

“The market is good,” Andryszak said at the hearing. “We don’t have any evidence of a problem here.”

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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