Splitting Md. insurance agency from department OK'd by House

March 07, 1992|By David Conn | David Conn,Annapolis Bureau

ANNAPOLIS -- The House of Delegates gave thumbs up yesterday to a plan to separate the Insurance Division from its department, create an anti-fraud bureau within it and exact some of the funding for the new agency from the industry it regulates.

But the legislation is unlikely to survive the Senate intact, some legislators say.

By a 124-2 vote, the delegates passed House Bill 1417 and sent it to the Senate, which is considering a similar version. Both bills were sponsored at the request of Gov. William Donald Schaefer.

The two bills would require all insurers based in Maryland to pay a surtax based on the dollar amount of insurance they sell in the state. The proceeds would go directly to the newly independent Maryland Insurance Administration, which would have a bureau to help detect and prosecute fraud committed against insurers.

Insurers and regulators have said the Insurance Division must have more money and resources or possibly that it might not receive accreditation from a national regulatory group. Without that approval, regulators in other states could make it tough for Maryland-based insurers to conduct business outside of Maryland.

Sen. Thomas P. O'Reilly, D-Prince George's, chairman of the Finance Committee, said he understands the industry's concerns about accreditation.

But, "like anything else, throwing money at the problem doesn't necessarily solve it," he said.

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