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Maryland proposal would ban discretionary clauses in life, annuity and health contracts to strengthen consumer protections
Summary
House Bill 1069 would prohibit discretionary clauses in life insurance, annuity and health insurance contracts, removing insurer-favorable deference in court reviews of disputes.
House Bill 1069 would prohibit discretionary clauses in life insurance, annuities and health insurance policies. Discretionary clauses give insurers deference by asking courts to defer to an insurer’s interpretation of policy language when disputes arise.
Sponsor Delegate Cedric Warman framed the bill as a fairness measure, comparing discretionary clauses to rules written so one party decides how to interpret them. “This bill closes the loophole,” Warman said, adding that Maryland previously…
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