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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0095*
SENATE BILL 95
C4 6lr1513
(PRE–FILED)
By: Senator Ellis
Requested: October 31, 2025
Introduced and read first time: January 14, 2026
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Property and Casualty Insurance – Parametric Insurance – Regulation 2
FOR the purpose of establishing requirements and prohibitions for parametric insurance 3
policies that are issued to a resident of the State or are sold, solicited, negotiated, or 4
offered in the State; authorizing the Maryland Insurance Commissioner to establish 5
a certain pilot program regarding parametric insurance; and generally relating to 6
parametric insurance. 7
BY repealing and reenacting, without amendments, 8
Article – Insurance 9
Section 1–301 10
Annotated Code of Maryland 11
(2017 Replacement Volume and 2025 Supplement) 12
BY adding to 13
Article – Insurance 14
Section 19 –1201 through 19 –1212 to be under the new subtitle “Subtitle 12 . 15
Parametric Insurance” 16
Annotated Code of Maryland 17
(2017 Replacement Volume and 2025 Supplement) 18
Preamble 19
WHEREAS, The General Assembly finds that climate–related catastrophic events 20
require rapid financial response mechanisms to support community resilience; and 21
WHEREAS, The General Assembly finds that parametric insurance products that 22
provide predetermined payments when specified measurable triggers are reached may 23
improve outcomes; and 24
2 SENATE BILL 95
WHEREAS, The General Assembly finds that the State should allow the 1
development of parametric insurance products with strong consumer protections, 2
transparency, actuarial soundness, and oversight by the Maryland Insurance 3
Administration; now, therefore, 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Insurance 7
1–301. 8
In addition to any administrative penalty otherwise applicable, a person that 9
willfully violates any provision of this article, with respect to which a greater penalty is not 10
provided by other applicable State law, is guilty of a misdemeanor and on conviction is 11
subject to a fine not exceeding $100,000. 12
SUBTITLE 12. PARAMETRIC INSURANCE. 13
19–1201. 14
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANI NGS 15
INDICATED. 16
(B) “BASIS RISK” MEANS THE RISK THAT A PARAMETRIC BENEFIT DOES NOT 17
EQUAL THE POLICYHOLDER’S ACTUAL LOSS. 18
(C) (1) “FALLBACK MECHANISM” MEANS A DATA SOURCE USED TO TRACK 19
OR COLLECT INFORMATION RELATED TO NATURAL DISASTERS. 20
(2) “FALLBACK MECHANISM” INCLUDES: 21
(I) SATELLITE IMAGERY; AND 22
(II) RADAR DATA. 23
(D) “INDEPENDENT DATA SOUR CE” MEANS A SPECIFIED GO VERNMENTAL 24
OR THIRD–PARTY AGENCY, SENSOR NETWORK, OR SCIENTIFIC INSTRU MENT USED 25
TO CONFIRM TRIGGER EVENTS. 26
(E) “INSURER” MEANS AN INSURER OF PROPERTY OR CASUA LTY 27
INSURANCE THAT ISSUES OR DELIV ERS A POLICY OF PARA METRIC INSURANCE IN 28
THE STATE. 29
SENATE BILL 95 3
(F) “LOW–INCOME HOUSEHOLD” MEANS A HOUSEHOLD WI TH AN INCOME 1
THAT DOES NOT EXCEED 50% OF THE AREA MEDIAN INCOME FOR A HOUSEHOLD OF 2
THE SAME SIZE. 3
(G) “MODERATE–INCOME HOUSEHOLD ” MEANS A HOUSEHOLD WI TH AN 4
INCOME THAT DOES NOT EXCEED 80% OF THE AREA MEDIAN I NCOME FOR A 5
HOUSEHOLD OF THE SAME SIZE. 6
(H) “PARAMETRIC INSURANCE ” MEANS A POLICY THAT PAYS A 7
PREDETERMINED BENEFI T WHEN A SPECIFIED , OBJECTIVELY MEASURAB LE 8
TRIGGER EVENT OCCURS, REGARDLESS OF ACTUAL LOSS. 9
(I) “PILOT PROGRAM” MEANS A PARAMETRIC I NSURANCE AND 10
COMMUNITY–BASED PILOT PROGRAM. 11
(J) “POLICYHOLDER” MEANS THE OWNER OF A POLICY OF PARAMETRIC 12
INSURANCE. 13
(K) “PUBLIC ENTITY” INCLUDES A GOVERNMEN T–AFFILIATED 14
ORGANIZATION THAT PROVIDES PUBLIC SERVICES. 15
(L) (1) “TRIGGER EVENT” MEANS A NATURAL DISASTER, INCLUDING: 16
(I) EARTHQUAKES; 17
(II) HIGH WINDS; 18
(III) HURRICANES; AND 19
(IV) FLOODS. 20
(2) “TRIGGER EVENT ” DOES NOT INCLUDE A C YBER–RELATED 21
EVENT. 22
19–1202. 23
THIS SUBTITLE APPLIES ONLY WITH RESPECT TO PARAMETRIC INSURA NCE 24
POLICIES OR CERTIFICATES THAT ARE: 25
(1) ISSUED TO A RESIDENT OF THE STATE; OR 26
(2) SOLD, SOLICITED, NEGOTIATED, OR OFFERED IN THE STATE. 27
4 SENATE BILL 95
19–1203. 1
(A) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , EACH 2
INSURER SHALL PROVID E APPLICANTS AND POL ICYHOLDERS WITH A WRITTEN 3
STATEMENT THAT SUMMA RIZES THE COVERAGES AND EXCLUSIONS UNDER THE 4
PARAMETRIC INSURANCE POLICIES ISSUED BY THE INSURER. 5
(2) THE STATEMENT REQUIRE D UNDER PARAGRAPH (1) OF THIS 6
SUBSECTION SHALL BE PROVIDED TO: 7
(I) AN APPLICANT AT THE TIME OF APPLICATION; AND 8
(II) EACH POLICYHOLDER ON A YEARLY BASIS. 9
(B) AN INSURER SHALL PROV IDE A ONE–PAGE FACT SHEET WRITTEN IN 10
CLEAR, PLAIN LANGUAGE TO AN INDIVIDUAL OR A SMALL BUSINESS POLICYHOLDER 11
AT THE TIME OF ISSUA NCE OR RENEWAL OF A PARAMETRIC INSURANCE POLICY 12
THAT DESCRIBES THE BASIS RISK UNDER THE POLICY. 13
(C) THE STATEMENTS REQUIRED UNDER THIS SECTION SHALL: 14
(1) CONTAIN THE INSURER ’S CURRENT ADDRESS , TELEPHONE 15
NUMBER, AND WEBSITE ADDRESS; AND 16
(2) BE SENT TO THE APPLICANT OR THE INSURED: 17
(I) IN ELECTRONIC FORM T O THE LAST KNOWN E –MAIL 18
ADDRESS OF THE APPLICANT OR INSURED; OR 19
(II) BY FIRST –CLASS MAIL TO THE LAST KNOWN ADDRE SS OF 20
THE APPLICANT OR THE INSURED. 21
19–1204. 22
ON OR BEFORE DECEMBER 1 EACH YEAR, EACH INSURER SHALL REPORT TO 23
THE COMMISSIONER INFORMATION REGARDING PARAMETRIC INSURANCE 24
POLICIES, INCLUDING INFORMATIO N ON THE FOLLOWING AS REQUIRED BY THE 25
COMMISSIONER: 26
(1) THE NUMBER OF POLICIES ISSUED; 27
(2) PREMIUMS; 28
SENATE BILL 95 5
(3) TRIGGER EVENTS; 1
(4) PROVIDED BENEFITS; 2
(5) INFORMATION ON ANY DISPUTES; AND 3
(6) BASIS RISK INCIDENTS. 4
19–1205. 5
(A) THIS SECTION MAY NOT BE CONSTRUED TO REQU IRE AN INSURER TO 6
DISCLOSE INFORMATION THAT IS PROPRIETARY OR IS TRADE SECRET INFORMATION 7
UNDER APPLICABLE LAW. 8
(B) TO QUALIFY AS A TRIGG ER EVENT UNDER A PARAMETRIC I NSURANCE 9
POLICY, THE EVENT MUST BE: 10
(1) MEASURABLE THROUGH OBJECTIVE CRITERIA; AND 11
(2) VERIFIABLE BY AN INDEPENDENT SOURCE. 12
(C) TO MEASURE A TRIGGER EVENT, AN INSURER MAY USE: 13
(1) SUBJECT TO SUBSECTION (D) OF THIS SECTION, A PROPRIETARY 14
INDEX; OR 15
(2) IF PRIMARY DATA IS UNAVAILABLE, A FALLBACK MECHANISM. 16
(D) AN INSURER MAY USE A PROPRIETARY IN DEX UNDER SUBSECTION 17
(C)(1) OF THIS SECTION ONLY IF THE INSURER PROVI DES ACCESS TO AUDIT 18
REPORTS. 19
19–1206. 20
(A) EXCEPT AS OTHERWISE P ROVIDED IN THIS SUBT ITLE, EACH INSURER 21
SHALL FILE WITH THE COMMISSIONER ALL RATE S, SUPPLEMENTARY RATE 22
INFORMATION, POLICY FORMS , MODIFICATIONS OF RAT ES, AND ENDORSEMENTS 23
THAT THE INSURER PROPOSES TO USE. 24
(B) IN EACH FILING SUBMITTED UNDER THIS SECTION, THE INSURER SHALL 25
STATE THE APPLICABLE EFFECTIVE DATE S OF THE RATE AND INDICATE THE 26
CHARACTER AND EXTENT OF THE COVERAGE CONTEMPLATED. 27
6 SENATE BILL 95
19–1207. 1
(A) EACH INSURER THAT ISSUES , SELLS, OR DELIVERS A PARAME TRIC 2
INSURANCE POLICY SHALL, AT THE TIME OF APPLICATION AND RENEWAL, OFFER IN 3
WRITING TO PROVIDE COVERAGE FOR LOSS THAT IS CAUSED BY OR RESULTS FROM 4
A TRIGGER EVENT. 5
(B) AN OFFER REQUIRED UNDER SUBSECTION (A) OF THIS SECTION SHALL 6
INCLUDE AN EXPLANATION, WRITTEN IN CLEAR AND SPECIFIC TERMS, OF: 7
(1) THE TRIGGER EVENT; 8
(2) THE METHODOLOGY USED TO MEASURE THE TRIGGER EVENT; 9
(3) BASIS RISK, INCLUDING AT LEAST TWO NUMERICAL EXAMPLES; 10
(4) THE PROPOSED TIMELINE FOR ANY BENEFIT; 11
(5) ANY INDEPENDENT DATA SOURCE; AND 12
(6) FALLBACK PROCESSES. 13
(C) AN INSURER SHALL PROVIDE THE EXPLANATION REQUIRED UNDER 14
SUBSECTION (B) OF THIS SECTION TO AN APPLICANT IN THE SAME MANNER AS 15
STATEMENTS UNDER § 19–1203 OF THIS SUBTITLE ARE REQUIRED TO BE PROVIDED. 16
(D) AN INSURER MAY COMPLY WITH THE RENEWAL NOTICE REQUIREMENTS 17
OF THIS SECTION BY S ENDING THE NOTICE IN THE SAME MANNER A S THE 18
STATEMENTS REQUIRED UNDER § 19–1203 OF THIS SUBTITLE ARE PROVIDED. 19
19–1208. 20
(A) AN INSURER THAT ISSUE S A POLICY OF PARAME TRIC INSURANCE MAY 21
NOT ADOPT AN UNDERWR ITING STANDARD OF THE POLICY IN THE CASE OF A 22
TRIGGER EVENT UNLESS THE INSURER HAS FILED THE UNDERWRITING STANDARD 23
WITH THE COMMISSIONER. 24
(B) THE FILING REQUIRED UNDER SUBSECTION (A) OF THIS SECTION 25
SHALL: 26
(1) BE MADE AT LEAST 60 DAYS BEFORE THE DATE THAT THE 27
INSURER PROPOSES TO IMPLEMENT THE UNDERWRITING STANDARD IN THE STATE; 28
AND 29
SENATE BILL 95 7
(2) INCLUDE: 1
(I) A COPY OF THE UNDERW RITING STANDARD THE INSURER 2
INTENDS TO IMPLEMENT; 3
(II) THE DATE ON WHICH THE INSURER INTENDS TO IMPLEMENT 4
THE UNDERWRITING STANDARD; 5
(III) POLICY AND CONSUMER DISCLOSURE FORMS; 6
(IV) CONTRACT TERMS; 7
(V) A MEMORANDUM SUPPORT ING RATES AND PRICIN G 8
METHODOLOGY; 9
(VI) A DESCRIPTION OF INDEPENDENT DATA PROTOCOLS; 10
(VII) AN EXPLANATION OF VERIFICATION PROTOCOLS; AND 11
(VIII) EDUCATIONAL MATERIALS ON BASIS RISK. 12
(C) AN UNDERWRITING STANDARD ADOPTED UNDER THIS SECTION SHALL 13
COMPLY WITH ALL APPLICABLE LAWS. 14
19–1209. 15
(A) THE COMMISSIONER MAY ESTABLISH A PILOT PROGRAM TO: 16
(1) PROVIDE INSURERS PARTICIPATI NG IN THE PILOT PROGRAM 17
ADDITIONAL OPPORTUNITIES TO PROVIDE PARAMETRIC INSURANCE PRODUCTS; 18
(2) SERVE A PUBLIC NEED; 19
(3) PROTECT VULNERABLE POPULATIONS; AND 20
(4) ADVANCE POLICY GOALS IN THE STATE. 21
(B) EACH INSURER PARTICIPATING IN THE PILOT PROGRAM SHALL COMPLY 22
WITH REGULATIONS ADOPTED BY THE COMMISSIONER THAT GOVERN THE PILOT 23
PROGRAM. 24
(C) THE COMMISSIONER MAY: 25
8 SENATE BILL 95
(1) AUTHORIZE AN INSURER TO OFFER PRODUCTS FOR LOW – OR 1
MODERATE–INCOME HOUSEHOLDS , SMALL BUSINESSES , LOCAL GOVERNMENT AL 2
UNITS, OR PUBLIC ENTITIES; AND 3
(2) ESTABLISH AN EXPEDITED REVIEW PROCESS FOR PUBLIC O R 4
COMMUNITY–BASED PILOT PROGRAMS. 5
(D) THE COMMISSIONER SHALL REQUIRE EACH INSURER THAT 6
PARTICIPATES IN THE PILOT PROGRAM TO REPORT TO THE COMMISSIONER ON THE 7
RESULTS OF THE PILOT PROGRAM ON OR BEFORE DECEMBER 1 EACH YEAR. 8
19–1210. 9
ON OR BEFORE DECEMBER 1 EACH YEAR , BEGINNING IN 2027, THE 10
ADMINISTRATION SHALL REPORT TO THE GENERAL ASSEMBLY, IN ACCORDANCE 11
WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE IMPLEMENTATION 12
OF THIS SUBTITLE WITH RESPECT TO THE OFFERING OF PARAMETRIC INSURANCE 13
IN THE STATE. 14
19–1211. 15
THE COMMISSIONER SHALL AD OPT REGULATIONS TO C ARRY OUT THIS 16
SUBTITLE. 17
19–1212. 18
THIS SUBTITLE MAY BE CITED A S THE MARYLAND PARAMETRIC INSURANCE 19
AUTHORIZATION AND CONSUMER PROTECTION ACT. 20
SECTION 2. AND BE IT FURTHER ENACTED, That the Maryland Insurance 21
Administration shall adopt regulations in accordance with § 19–1211 of the Insurance 22
Article, as enacted by Section 1 of this Act, on or before January 1, 2027. 23
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 24
1, 2026. 25