Twisting is a prohibited practice in Maryland where an insurance producer induces a policyholder to lapse, forfeit, surrender, or convert an existing insurance policy to purchase a new policy from the same or a different insurer, based on incomplete or misleading comparisons of the two policies. This is often done to generate a commission for the producer, without regard for the policyholder’s best interests. Maryland Insurance Code, specifically § 27-217, addresses unfair trade practices, including misrepresentation and false advertising of insurance policies. Twisting falls under this category as it involves misrepresenting the benefits of a new policy while downplaying the advantages of the existing one. Penalties for engaging in twisting can include suspension or revocation of the producer’s license, fines, and potential civil liability for damages suffered by the policyholder. The Maryland Insurance Administration actively investigates complaints of twisting and takes disciplinary action against producers found to be in violation of the law.

Maryland requires licensed insurance producers to complete continuing education (CE) courses to maintain their licenses. Producers must complete 24 credit hours of approved CE courses every two years, prior to their license renewal date. Three of these hours must be in ethics. The Maryland Insurance Administration (MIA) approves CE courses, ensuring they cover relevant topics such as insurance law, regulations, product knowledge, and ethical conduct. Failing to meet the CE requirements can result in the suspension or revocation of the producer’s license. Maryland ensures the relevance and currency of CE courses through a rigorous approval process. Course providers must submit their course materials to the MIA for review and approval. The MIA also monitors the performance of CE providers and may revoke approval if courses are found to be inadequate or misleading. The specific regulations are outlined in COMAR 23.12.04, which details the requirements for CE and the process for course approval.

The Maryland Life and Health Insurance Guaranty Corporation provides a safety net for policyholders in the event that a life or health insurance company becomes insolvent and is unable to meet its obligations. The Guaranty Corporation is funded by assessments on solvent insurance companies operating in Maryland. It covers life insurance policies, health insurance policies, and annuity contracts issued by member insurers. However, there are limitations on the amount of coverage provided. For life insurance, the Guaranty Corporation typically covers up to \$300,000 in death benefits and \$100,000 in cash surrender value. For health insurance, the coverage limit is generally \$500,000 for health benefit plans. Annuities have a coverage limit of \$250,000 in present value of annuity benefits. These limits are per individual, regardless of the number of policies or contracts held with the insolvent insurer. The Maryland Insurance Code, specifically Title 9, Subtitle 3, outlines the powers and duties of the Guaranty Corporation.

Consumers in Maryland who have complaints against insurance companies or producers can file a complaint with the Maryland Insurance Administration (MIA). The MIA investigates the complaint and attempts to mediate a resolution between the consumer and the insurer or producer. The complaint process typically involves submitting a written complaint to the MIA, providing supporting documentation, and allowing the MIA to investigate the matter. The MIA has the authority to conduct investigations, hold hearings, and issue orders to resolve complaints. If a consumer is not satisfied with the MIA’s resolution, they may have the right to pursue legal action in court. The Maryland Insurance Code provides consumers with various rights and remedies, including the right to sue for damages caused by an insurer’s or producer’s wrongful conduct. COMAR 23.02.01 outlines the procedures for handling complaints and investigations by the MIA.

“Controlled business” refers to insurance written on the lives, property, or interests of a producer, their immediate family, or their employer. Maryland imposes restrictions on producers who derive a substantial portion of their insurance business from these controlled sources to prevent unfair practices and ensure that producers are primarily engaged in serving the general public. While there isn’t a specific statute defining the exact percentage that constitutes “controlled business,” the Maryland Insurance Administration (MIA) generally considers a producer to be engaged in controlled business if a significant portion of their premium volume comes from these sources. The rationale behind these restrictions is to prevent producers from using their license primarily to obtain insurance for themselves or their close associates, rather than serving the broader insurance needs of the public. The MIA has the authority to investigate and take action against producers who appear to be abusing their license for controlled business purposes, potentially leading to license suspension or revocation.

To obtain a nonresident insurance producer license in Maryland, an applicant must hold a valid insurance producer license in their home state. They must also submit an application to the Maryland Insurance Administration (MIA), pay the required fees, and provide proof of licensure in their resident state. Maryland grants nonresident licenses to individuals who have met the licensing requirements in their home state, provided that the home state offers reciprocal licensing privileges to Maryland residents. Nonresident licensees have the same privileges and responsibilities as resident licensees, including the authority to solicit, negotiate, and sell insurance in Maryland. However, nonresident licensees are subject to the laws and regulations of both their resident state and Maryland. They must also comply with Maryland’s continuing education requirements to maintain their nonresident license. The specific requirements for nonresident licensing are outlined in the Maryland Insurance Code, specifically § 10-116, which addresses reciprocal agreements for licensing.

“Twisting” refers to the unethical practice of inducing a policyholder to drop an existing insurance policy and purchase a new one from another insurer, to the detriment of the policyholder. This often involves misrepresentation or incomplete comparison of the two policies. Maryland Insurance Code, specifically Section 27-217, addresses unfair trade practices, which includes twisting. The regulations prohibit making any misleading representations or incomplete comparisons of insurance policies for the purpose of inducing a person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert an insurance policy or annuity contract, or to take out a policy of insurance or annuity contract with another insurer. Violators may face penalties, including fines and suspension or revocation of their insurance license. Agents must provide accurate and complete information, allowing policyholders to make informed decisions based on their needs, not the agent’s commission.

Maryland insurance producers are required to complete continuing education (CE) to maintain their licenses. As per Maryland Insurance Administration regulations, producers must complete 24 hours of CE every two years, prior to their license renewal date. Three of these hours must be in ethics, consumer protection, or insurance law. The remaining hours can be in courses related to the lines of authority held by the producer. Approved CE courses are offered by various providers and must be approved by the Maryland Insurance Administration. Failing to complete the required CE hours by the renewal date can result in the lapse of the insurance producer’s license. Producers may be able to reinstate their license within a certain timeframe by completing the missed CE and paying a penalty fee, but practicing insurance without a valid license is illegal and can result in significant fines and legal repercussions.

Maryland insurance producers have a fiduciary responsibility to handle premiums and other funds received from clients in a trustworthy manner. Maryland Insurance Code Section 10-130 requires producers to hold these funds in a separate fiduciary account, distinct from their personal or business operating accounts. Commingling fiduciary funds with personal or business funds is strictly prohibited. This practice can lead to disciplinary action by the Maryland Insurance Administration, including fines, suspension, or revocation of the producer’s license. Furthermore, commingling funds can create legal liabilities for the producer, potentially leading to civil lawsuits or even criminal charges if the commingling is deemed to be intentional misappropriation or embezzlement. Producers must maintain accurate records of all fiduciary transactions and be prepared to provide documentation upon request by the Maryland Insurance Administration.

The Maryland Life and Health Insurance Guaranty Corporation provides a safety net for Maryland residents who hold life insurance, health insurance, or annuity policies issued by insurers that become insolvent. Established under Maryland Insurance Code Title 9, Subtitle 3, its purpose is to protect policyholders from financial loss due to the failure of an insurance company. The Guaranty Corporation steps in to pay covered claims up to certain limits, typically covering policy benefits, cash values, and annuity payments. Coverage is generally provided when an insurer is deemed insolvent by a court and is ordered to be liquidated. The Guaranty Corporation assesses solvent insurance companies operating in Maryland to fund the payment of these claims. It’s important to note that there are limitations on the amount of coverage provided, and not all types of policies are covered. The Guaranty Corporation does not protect against market risk or poor investment performance of variable products.

Maryland law requires insurance producers to report suspected insurance fraud to the Maryland Insurance Administration (MIA). The process typically involves submitting a written report to the MIA’s Insurance Fraud Division, detailing the suspected fraudulent activity, the individuals involved, and any supporting documentation. Maryland Insurance Code Section 27-803 outlines the requirements for reporting fraud. Producers who knowingly fail to report suspected insurance fraud may face penalties, including fines, suspension, or revocation of their insurance license. Additionally, they could be held liable for any damages resulting from the unreported fraud. The MIA provides a confidential reporting mechanism to encourage individuals to come forward with information about suspected fraud without fear of reprisal. Reporting suspected fraud is a critical component of maintaining the integrity of the insurance market and protecting consumers from financial harm.

The Health Insurance Portability and Accountability Act (HIPAA) establishes national standards to protect individuals’ medical records and other personal health information. Maryland insurance producers must be acutely aware of HIPAA’s privacy and security rules when handling protected health information (PHI). The Privacy Rule restricts the use and disclosure of PHI without the individual’s authorization. Producers must obtain valid authorizations before accessing or sharing PHI for purposes such as underwriting, claims processing, or marketing. The Security Rule requires producers to implement administrative, physical, and technical safeguards to protect electronic PHI from unauthorized access, use, or disclosure. Violations of HIPAA can result in significant civil and criminal penalties. Producers must provide clients with a Notice of Privacy Practices, explaining how their PHI will be used and protected. They must also train their employees on HIPAA compliance and implement policies and procedures to ensure the confidentiality and security of PHI.

In Maryland, “suitability” in annuity sales refers to the obligation of insurance producers to ensure that any recommended annuity product is appropriate for the client’s financial situation, needs, and objectives. This requirement is designed to protect consumers from being sold unsuitable annuities that may not align with their risk tolerance, investment horizon, or income needs. Maryland Insurance Administration regulations require producers to gather comprehensive information about the client’s financial profile, including their age, income, assets, debts, tax status, investment experience, and financial goals. Based on this information, the producer must assess whether the annuity is a suitable recommendation, considering factors such as the client’s need for income, their tolerance for market risk, and the potential surrender charges and fees associated with the annuity. The producer must document the basis for their recommendation and provide the client with a clear and understandable explanation of the annuity’s features, benefits, and risks. Failure to adhere to suitability standards can result in disciplinary action by the Maryland Insurance Administration.