Maryland Auto warns MIA order, possible $21M assessment could raise costs for drivers

Maryland Auto officials told the Economic Matters Committee that a recent Maryland Insurance Administration order requiring the insurer to be ‘‘rate adequate’’ by the end of 2026 will force changes to the program’s affordability index and could trigger a multi‑million‑dollar industry assessment.

Devon Brown, government relations manager for Maryland Auto, told the committee the organization exists to ‘‘reduce the number of uninsured motorists and to provide assessable insurance options for individuals who are unable to obtain coverage in the regular market.’’

The changes matter because Maryland Auto, created by the legislature decades ago as a residual market mechanism, uses an affordability index that targets minimum‑liability rates in low‑income ZIP codes. Al Radmer, director of Maryland Auto, told lawmakers that the Maryland Insurance Administration (MIA) has ordered the insurer to reach statewide rate adequacy and eliminate the affordability index by the end of 2026, a timetable Radmer said the organization has begun to address.

Radmer gave a preliminary estimate for the industry assessment that funds Maryland Auto’s surplus: when books were closed in November the board’s working estimate was about $21,000,000, though he said final certification will be based on audited financials as of Dec. 31, 2024 and that officials now hope the number will be lower. He said the board will certify the assessment in March and that invoices will be…