Life Insurance Underwriting and § 27-501 of the Insurance Article

BETH SAMMIS, Ph.D. Acting Commissioner KAREN STAKEM HORNIG Deputy Commissioner MARTIN O’MALLEY Governor ANTHONY G. BROWN Lt. Governor 200 St. Paul Place, Suite 2700, Baltimore, Maryland 21202 1-800-492-6116 TTY: 1-800-735-2258 www.mdinsurance.state.md.us BULLETIN 10-13 Date: April 29, 2010 To: Life Insurers Re: Life Insurance Underwriting and § 27-501 of the Insurance Article The Maryland Insurance Administration would like to remind life insurers who deliver or issue policies for delivery in Maryland that underwriting decisions, including rescissions, are required to comply with Insurance Article, § 27-501, Annotated Code of Maryland. If the Maryland Insurance Administration receives a complaint concerning the underwriting of a life insurance policy, an insurer will be expected to document compliance with § 27-501 of the Insurance Article. The documentation provided to the Maryland Insurance Administration in response to a complaint investigation is required to include: 1. The insurer’s applicable underwriting requirements; and 2. A demonstraton that the insurer’s underwriting decision was not arbitrary, capricious, or unfairly discriminatory, and was made by the application of standards that are reasonably related to the insurer’s economic and business purposes. Questions about this bulletin may be addressed to the Life and Health Complaints Section of the Maryland Insurance Administration at 410-468-2224. Brenda A. Wilson Associate Commissioner Life and Health Section Signature on file with original