ANNAPOLIS -- A group of Schaefer administration bills that would give the state authority to regulate currently untouchable segments of the insurance industry, and allow it to rehabilitate companies on the brink of collapse, passed a House committee yesterday, a clear sign of victory in the full House.
The action by the House Economic Matters Committee sends to the House this week almost the entire package of insurance legislation submitted by Gov. William Donald Schaefer. Only a bill addressing consumer fraud against insurers has yet to clear the committee.
The panel recently approved another Schaefer bill that ultimately would triple the capital requirements of most insurers in Maryland, a step aimed at strengthening an industry that some have warned could be the source of the nation's next financial crisis.
"With the exception of the governor's fraud bill, which is still before us, we have completed the governor's insurance package," committee Chairman Casper R. Taylor Jr., D-Allegany, announced to a relieved committee almost five hours after it convened yesterday morning. "I seriously hope when these bills get to the Senate they don't get too much massaging," he said.
The Senate Finance Committee has yet to vote on them.
Committee votes for these types of complex business bills virtually assure that they will pass the full House, unlike more high-profile and visceral issues, such as abortion or gun control.
One Schaefer bill that did not survive the committee voting session would have made it a crime for an insurance company executive not to notify regulators when the company is technically insolvent -- that is, when its liabilities exceed its assets, or when it is unable to pay its debts.
But committee Vice Chairman Gary R. Alexander, D-Prince George's, took from the defeated bill language that would have prohibited deliberate attempts by insurers to conceal their financial problems and moved it into a bill that would give the state more leeway to regulate shaky companies.
The other bills that passed would authorize the insurance commissioner to regulate "managing general agents" and "broker-controlled insurers." These businesses effectively control either the types or the amount of policies an insurance company writes but are completely unregulated.
The Economic Matters Committee yesterday also:
* Moved to end a four-year turf battle between architects and interior designers by approving legislation to create a state Board of Certified Interior Designers. The bill attempts to draw a clear line between the types of work allowed to the two groups, which have been stepping on each other's toes lately.
* Killed a bill that would have required employers to offer unpaid family leave to employees to care for newborn or adopted children, or for sick relatives. Because a similar bill died in a Senate panel last week, Mr. Taylor said, "I see no reason to bleed over it."
* Passed a bill to allow homebuilders and developers to draw design plans for one- and two-family homes without the use of an architect. This has been common practice, but in the fall the state Architectural Board ruled it impermissible.
* Decided against legislation that would create an independent Maryland Insurance Administration, separate from the Department of Licensing and Regulation, within which it now operates.
* Killed a bill to require insurers to turn over to policyholders any medical reports that were used as justification to deny coverage after an auto accident.