Insurance - Third Party Administrators - Enforcement

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0139*

SENATE BILL 139
C4, J5 6lr0041
(PRE–FILED) CF HB 277
By: Chair, Finance Committee (By Request – Departmental – Maryland Insurance
Administration)
Requested: September 25, 2025
Introduced and read first time: January 14, 2026
Assigned to: Finance
Committee Report: Favorable
Senate action: Adopted
Read second time: February 7, 2026

CHAPTER ______

AN ACT concerning 1

Insurance – Third Party Administrators – Enforcement 2

FOR the purpose of altering the grounds on which the Maryland Insurance Commissioner 3
may deny an applicant for registration as or refuse to renew, suspend, or revoke the 4
registration of a third party administrator; altering the violations for which the 5
Commissioner may impose civil penalties against a third party administrator ; and 6
generally relating to third party administrators. 7

BY repealing and reenacting, with amendments, 8
Article – Insurance 9
Section 8–309(a) and 8–320(c) 10
Annotated Code of Maryland 11
(2017 Replacement Volume and 2025 Supplement) 12

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14

Article – Insurance 15

8–309. 16

2 SENATE BILL 139

(a) Subject to the hearing provisions of Title 2 of this article, the Commissioner 1
may deny a registration to an applicant or refuse to renew, suspend, or revoke the 2
registration of a registrant if the applicant or registrant: 3

(1) makes a material misstatement in an application for registration; 4

(2) fraudulently or deceptively obtains or attempts to obtain a registration 5
for the applicant or registrant or for another; 6

(3) has been convicted of a felony or of a misdemeanor involving moral 7
turpitude; 8

(4) in connection with the administration of a plan or with activities on 9
behalf of a life insurer, commits fraud or engages in illegal or dishonest activities; [or] 10

(5) [violates any provision of this subtitle or a regulation adopted under it] 11
HAS VIOLATED THIS ARTICLE OR ANOT HER LAW OF THE STATE THAT RELATES TO 12
INSURANCE; OR 13

(6) KNOWINGLY FAILS TO COMPLY WITH A REGULATION ADOPTED BY 14
OR AN ORDER OF THE COMMISSIONER. 15

8–320. 16

(c) (1) In addition to any other enforcement action taken by the Commissioner 17
under this section, the Commissioner may impose a civil penalty of not more than $10,000 18
for each violation of this [subtitle] ARTICLE COMMITTED BY AN ADMINISTRATOR. 19

(2) Notwithstanding paragraph (1) of this subsection, the Commissioner 20
may impose a civil penalty of not more than $1,000 per day for each day that a person is in 21
violation of § 8–303(a) of this subtitle. 22

(3) In determining the amount of the civil penalty imposed under this 23
subsection, the Commissioner shall consider: 24

(i) the seriousness of the violation; 25

(ii) the good faith of the violator; 26

(iii) the violator’s history of previous violations; 27

(iv) the deleterious effect of the violation on the plan and its 28
participants and beneficiaries; 29

(v) the assets of the violator; and 30

SENATE BILL 139 3

(vi) any other factors that relate to the determination of a financial 1
penalty. 2

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
October 1, 2026. 4

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.