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Letter in Support of Senate Bill 241

February 17, 2004

The Honorable Thomas M. Middleton, Chairman

Senate Finance Committee

3 East Miller Senate Building

Annapolis , MD 21401

Re:  Support for SB 241 – Insurance – Cancellation or Refusal to Renew Coverage –    Claims History

Dear Mr. Chairman and Members of the Committee:

The Maryland Public Interest Research Group (MaryPIRG) and the Maryland Consumer Rights Coalition join in supporting SB 241, Insurance – Cancellation or Refusal to Renew Coverage –    Claims History.

Senate Bill 241 provides two important protections for consumers. First, it prohibits an insurer from using an inquiry which does not result in a claim from being used as a basis to cancel or refuse to renew coverage. This provision is needed as consumers are having their insurance cancelled for merely making an inquiry that does not result in a claim. Insurance is a necessary  purchase for consumers and having an insurance policy cancelled can cause great expense. A mere inquiry should not be allowed to be the basis for insurance cancellation.

Second, SB241 requires insurers to notify policyholders if filing another claim may result in the cancellation or refusal to renew their policy. This bill does not prohibit an insurer from considering claims history in its decision to cancel or not renew a policy, it merely levels the playing field between insurers and their policyholders by providing policyholders with the information they need to decide whether or not to file a claim. If filing a claim is going to result in cancellation, some consumers may make the choice not to file a claim.

For these reasons, MaryPIRG and the Maryland Consumer Rights Coalition respectfully request a favorable report of SB 241. 

Sincerely,

Gigi Kellett,                                                                   Cheryl L. Hystad

Public Interest Advocate                                                Executive Director

MaryPIRG                                                                    Maryland Consumer Rights Coalition

190 Duke of Gloucester Street                                      3000 Chestnut Avenue, Suite 203

Annapolis , MD 21401                                                    Baltimore , MD   21211

410-267-1160                                                                 410-366-1965

gkellett@marypirg.org                                                    mcrc@mdconsumers.org

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