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Bill would curb insurer use of telematics data; industry warns of forfeited safety gains
Summary
Sen. Alonzo Washington proposed limits on insurers' telematics programs that would require disclosure, an appeals process and bar insurers from conditioning coverage on telematics participation; the Maryland Insurance Administration supported disclosure rules while insurers warned the bill could undermine telematics' safety benefits.
Sen. Alonzo Washington presented Senate Bill 984 to require insurers that use telematics for private passenger automobile insurance (PPA) to clearly disclose the data collected, provide an accessible appeals process for policyholders to correct erroneous telematics data and restrict insurers from making telematics participation a condition of underwriting or renewal. The bill would also authorize the Maryland Insurance Administration (MIA) to adopt regulations limiting the types and amounts of telematics data PPA insurers may collect.
The MIA testified in support of the transparency and consumer‑recourse measures and said it had surveyed PPA insurers and planned to publish results. MIA cited frequent consumer complaints and recommended regulatory limits to ensure data collection is fair and relevant.
Opponents including NAMIC, State Farm and the American Property Casualty Insurance Association said telematics programs are voluntary options that can reduce risky driving and offer discounts; they warned that prohibitions and prescriptive regulation could stifle innovation and impede programs that yield safety improvements. Insurer witnesses said most participating policyholders benefit from discounts of up to 10% and that participation models vary across carriers; some carriers operate telematics-only products while others use optional phone apps or dongles. Industry representatives also noted the market is heterogeneous — different carriers collect different data and rate policies on different schedules (monthly, 30-day, or six-month cycles).
Consumer and sponsor questions focused on how telematics data are collected (apps vs. built-in vehicle telemetry), the frequency of rate adjustments and the possibility that some embedded vehicle systems may collect location data regardless of insurance enrollment.
Ending: The MIA said it would publish survey results and recommended rulemaking; insurers opposed restrictions and urged time for the MIA study before statutory changes.
