FAQ

Insurance law can be complicated, and for many businesses and professionals, it is not always clear where questions end and legal obligations begin. This FAQ is intended to address some of the most common questions that arise in connection with Maryland insurance regulatory issues, coverage, claims, and related disputes, and to provide straightforward, practical information about how these Maryland law typically impacts these issues. Read below and contact Brown & Bullock, LLC for more.

Maryland Insurance Law FAQ

Q: What is insurance regulatory litigation?
A: Insurance regulatory litigation in Maryland generally involves disputes between insurers, insurance producers, or other regulated entities and state agencies, most often the Maryland Insurance Administration. These matters usually arise when a regulator believes insurance laws or regulations have been violated.  Regulatory matters can involve, but are not limited to, professional licensing issues and violation enforcement, targeted investigations and market conduct examinations.  Sanctions for violations of the Maryland Insurance Article may take the form of fines, licensure suspensions or revocations, initial or renewal application denials, or other penalties.

Q: What happens during a Maryland Insurance Administration investigation?
A: A Maryland Insurance Administration investigation typically (but not always) begins after a consumer complaint is filed.  From there, the agency may request records, access to books and records, conduct interviews, and closely examine whether insurance laws are being followed. Depending on what is uncovered, investigations can lead to corrective actions, monetary penalties, license discipline, or formal administrative litigation.

Q: How are insurance administrative hearings handled in Maryland?
A: Insurance administrative hearings in Maryland are generally conducted before a hearings officer appointed by the Maryland Insurance Commissioner.  The Maryland Insurance Commissioner may, in his or her discretion, delegate hearing authority to the Maryland Office of Administrative to be heard by an administrative law judge. During these proceedings, evidence is presented, witnesses may testify, and legal arguments are made by the parties involved. Afterward, the hearing officer or administrative law judge will render a decision.  Parties may challenge the decision by judicial review in the Maryland Circuit Courts.

Q: What is commercial insurance claim preparation?
A: Commercial insurance claim preparation involves carefully assembling and submitting a claim in a manner that complies with the specific requirements of the insurance policy. This process often includes reviewing policy language, gathering documentation, calculating losses, and addressing coverage issues. Proper preparation is especially important for complex claims involving property damage or business interruption.  Paradoxically, early legal representation in the preparation of a commercial claim often reduces the likelihood of legal disputes later in the claim process.

Q: Why are commercial insurance claims often denied or delayed?
A: Commercial insurance claims are often denied or delayed due to incomplete documentation, missed deadlines, disputed interpretations of policy language, or disagreements over the value of the claimed loss. Commercial insurance claims may also lead to coverage disputes, which is why thorough claim preparation and policy analysis are critical.

Q: What documents are typically needed for a commercial insurance claim?
A: The documents needed for a commercial insurance claim can vary, but often include the insurance policy, proof of loss, financial records, repair estimates, invoices, photographs, expert reports, and correspondence with the insurer. The exact documentation depends on the nature of the loss, whether it involves property damage, cyber loss, business interruption or other coverage endorsements.

Q: What is an insurance coverage opinion?
A: An insurance coverage opinion is a legal analysis that evaluates whether a particular loss or claim is covered under the terms of an insurance policy. It typically examines policy language, exclusions, endorsements, and relevant Maryland case law to assess coverage obligations, potential defenses, and overall risk before or during a dispute.

Q: How do insurance coverage disputes arise?
A: Insurance coverage disputes often arise when insurers and policyholders interpret policy language differently. These disagreements may involve exclusions, notice requirements, or the scope of coverage itself. In Maryland, coverage disputes are frequently addressed through negotiation, declaratory judgment actions, or litigation in either state or federal court.

Q: What is a declaratory judgment action in insurance litigation?
A: A declaratory judgment action asks a court to interpret an insurance policy and determine coverage obligations. In Maryland, these actions are commonly used to clarify whether an insurer has a duty to defend or indemnify when coverage is being contested.

Q: What are insurance-related transactional services?
A: Insurance-related transactional services involve legal guidance during business transactions where insurance issues play a central role. This may include reviewing policies during mergers or acquisitions, advising on insurance requirements in contracts, addressing risk transfer provisions, and ensuring that transactions comply with Maryland insurance regulations.

Q: Why are insurance policy review and risk audits important?
A: Period insurance policy review is important because it helps uncover coverage gaps, exclusions, or compliance issues that could create unexpected exposure for businesses. In Maryland, careful policy review and risk auditing review ensures that policies align with contractual risk allocations and meet applicable regulatory standards.

Q: What types of disputes fall under commercial litigation?
A: Commercial litigation generally includes disputes between businesses involving contracts, insurance obligations, professional services, and financial losses.  Depending on the nature of the dispute or contractual language in the event of a contractual dispute, ensuring that a lawsuit is filed in the correct court can be critical.  Commercial litigation frequently involves detailed factual record analysis, expert testimony, and complex damages models.

Q: How long does commercial litigation usually take?
A: The timeline for commercial litigation in Maryland varies widely. The duration often depends on the complexity of the case, court scheduling, discovery demands, and post-trial litigation, including appeals.

Q: What professional licenses are regulated in Maryland?
A: Maryland agencies regulate a wide range of professional licenses and certificates.  The Maryland Insurance Administration is the state agency that issues and regulates certificates for insurers, and licenses for insurance producers, public adjusters and a wide variety of other insurance professionals. Insurance professional licenses are subject to continuing education credits, examinations, renewals, and ongoing compliance with ethical and regulatory standards.

Q: What can cause a professional license suspension or revocation?
A: A professional license in Maryland may be suspended or revoked for a variety of reasons, including specific violations of the Maryland Insurance Article, failure to meet continuing education requirements, failure to properly disclose adverse administrative action, or other alleged misconduct. These matters often involve targeted investigations, requests for production of records, interviews and contested hearings before a hearing officer or administrative law judge.

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