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Debate grows over bill to authorize affordability program at Maryland Auto Insurance Fund
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Summary
SB469 would allow the Maryland Auto Insurance Fund (MAIF/MAFE) to implement a dedicated affordability program; the agency and supporters said it would stabilize coverage for high‑risk drivers, while insurers and trade groups warned of solvency risks, cross‑subsidies, and large assessments passed to the voluntary market.
Senate Bill 469 seeks to authorize a dedicated affordability program within the Maryland Auto Insurance Fund to ensure eligible drivers who cannot obtain private coverage retain access to affordable auto insurance. Sponsor testimony framed the measure as a practical tool to stabilize coverage for underserved drivers facing exceptionally high premiums.
MAIF representatives described the fund's 50‑year mission to serve as the insurer of last resort and defended the affordability measures they have used. Executive testimony said MAIF currently insures roughly 26,000–28,600 individual policies and that removing affordability considerations would force large rate increases in some low‑income, high‑cost neighborhoods (the sponsor cited estimates that certain areas could see 30–53% rate increases without affordability mechanisms).
Opposition came from a broad coalition of industry groups: the Maryland Association of Mutual Insurance Companies, independent agents, Allstate, the American Property Casualty Insurance Association, and others. Critics argued SB469 would permit MAIF to set inadequate rates that threaten solvency and shift costs to other carriers via mandatory assessments, potentially increasing premiums statewide. They urged legislative guardrails, transparency in definitions of eligibility and affordability, and legislative oversight of any programmatic framework.
Committee members asked detailed questions about MAIF's current affordability index, the use of ZIP codes as a subsidy proxy, and how assessments are distributed across the market. MAIF representatives said they are working with Maryland Insurance Administration (MIA) to modify their approach from ZIP‑code subsidies to individual policyholder criteria and that assessments exist to prevent insolvency but acknowledged unresolved concerns about market impacts.
No vote was recorded; the committee closed the SB469 panel after extended questioning and public comment.
