Maryland Insurance Commissioner Supports Telematics Bill
Maryland’s Acting Insurance Commissioner, Marie Grant, has voiced her backing for a bill that would increase regulation of automobile insurance telematics programs. The focus of the proposed legislation is on improving disclosure practices and data collection safeguards.
During a Maryland Senate Finance Committee meeting, Grant highlighted a key provision of the bill: the ability for policyholders to correct or challenge the data collected through telematics. She emphasized the importance of this measure for consumer protection.
“We actually see a lot of complaints on this issue in particular,” Grant stated, “Folks who are enrolled in telematics programs often have pretty limited ability to appeal or challenge data with their carrier.”
Grant noted that current regulations typically limit policyholder challenges to whether they were driving when the data was recorded, rather than questioning the data’s accuracy. These comments were reported by AM Best.
The proposed bill also includes measures to prevent telematics data from being used to justify significant rate increases. Additionally, it sets guidelines on data collection and strengthens privacy protections for consumers. The legislation also mandates enhanced disclosure requirements for insurance providers and grants the commissioner the authority to conduct periodic audits of telematics programs.
Senator Alonzo Washington, the bill’s sponsor, stated that the legislation aims to prevent discriminatory practices and safeguard consumer privacy. Washington cited a report by the Consumer Federation of America, indicating that 60% of U.S. policyholders choose not to participate in telematics programs due to privacy concerns. He added that he himself has opted out of these programs.
Jon Ward, the department vice president of public affairs for the American Property Casualty Insurance Association, stated that the insurance industry supports voluntary participation in telematics programs. He emphasized the potential benefits for both policyholders and the public.
“Telematics have been shown to help drivers reduce their insurance premiums by incentivizing safer driving,” Ward said in an emailed statement. “This also reduces the likelihood of traffic accidents.”
The Maryland Insurance Administration declined to offer additional comments beyond Commissioner Grant’s testimony. A spokesperson indicated that the administration is actively studying the issue and preparing a report assessing the impact of telematics on the state’s insurance market.
In November, a draft bulletin issued by the Maryland Insurance Administration, which outlined detailed disclosure requirements related to factors affecting automobile insurance premium increases tied to telematics programs, received pushback from key industry players. These included State Farm Mutual Automobile Insurance and several trade associations. The critics argued that the new rules would duplicate existing disclosures provided when policyholders enroll in telematics.
“[T]he requirement that the insurer must be ‘able to provide all relevant data about the insured that was measured through the telematics program’ could threaten the viability of many companies’ telematics programs and the discounts they offer to consumers,” stated Nancy Egan, American Property Casualty Insurance Association’s vice president of state government relations for the mid-Atlantic.
