Maybe this year, the General Assembly finally understands: Maryland must beef up its Insurance Division if the state is to meet a January 1994 deadline for winning national accreditation. Without legislative action this session, this state's largest insurers may be forced to move elsewhere.
That's a pretty serious problem. Yet last year the legislature bTC engaged in internal squabbling over minor aspects of the proposal. It is imperative that this kind of destructive legislative gamesmanship not happen this time around.
So far, so good. The House of Delegates recently gave near-unanimous approval to two bills that would bolster state regulation of the insurance industry and assess $4.8 million in fees on insurers to pay for it. Now the Senate must act.
Defeat of the proposal would be costly. Without accreditation of the Insurance Division by the National Association of Insurance Commissioners by the end of the year, Maryland's home-based insurers might not be able to do business in other states. Such firms as GEICO, Maryland Casualty, USF&G;, Monumental Corp.
and Baltimore Life might be forced to flee Maryland just to keep operating.
So eager are the insurers to beef up the Insurance Division's oversight that they have been lobbying hard for passage of this package -- including the nearly $5 million in fees on the industry. That says something about the urgency of this proposal.
Insurance companies domiciled in Maryland generate $1.5 billion direct and indirect sales. They provide $887 million in salaries and generate 19,000 full-time jobs in Maryland. That's a giant economic impact, one that legislators should now take steps to keep here.
But there's another important issue. For years, the Insurance Division has been hobbled in its efforts to police insurers because of the parsimony of the governor and legislature. That has been a troubling trend, one that has left customers in the lurch. By adding 91 jobs to the Insurance Division and putting in place a uniform regulatory program similar to ones in 19 other states, Maryland officials finally can give consumers confidence that our insurance companies are being carefully scrutinized for irregularities and financial instability.
It's about time delegates voted to improve oversight of the insurance industry. Even the industry itself is demanding this step. The ball is in the Senate's court. Will it act responsibly this time?