A Maryland Senate bill seeks to regulate how auto insurers use certain private passenger vehicle telematic systems, including prohibiting data as a basis to set premiums.

Under SB 984 the Maryland Insurance Administration would also adopt regulations to limit the types and amounts of data collected through the systems.

Sen. Alonzo T. Washington (D-District 22) introduced the bill on Feb. 3. The Senate Finance Committee will hold a public hearing on the bill March 5 at 1 p.m.

“Telematics” is defined in the bill as a method of data collection related to vehicle speed, location, mileage, and operating hours; driver acceleration, braking, and cornering habits; engine diagnostics; and any other data point related to the operation of an insured vehicle that has been filed with and approved by the insurance commissioner via recording sensors or a telecommunications device.

The bill would prohibit insurers from using the collected data to cancel, refuse to renew, or underwrite private passenger auto policies. It also requires insurance companies to establish a process for policyholders to appeal or correct information telematics data they believe to be wrong.

The Maryland Insurance Administration may require insurers to audit the telematics system they use “to ensure that it collects, processes, and calculates the impact of data on insurer-wide premium rates in a manner that is actuarially sound and free of unfair bias.”

If approved, the bill would be effective Oct. 1.

During the Society of Collision Repair Specialists (SCRS) OEM Collision Repair Technology Summit in November, Cambridge Mobile Telematics (CMT), General Motors, and the Alliance for Automotive Innovation (Auto Innovators) shared how insurers and automakers typically use telematics data.

“The main issue that comes down to the insurance process that’s happened in the last few years has been trying to get more speed into the entirety of the repair process,” said Ryan McMahon, CMT strategy and corporate development senior vice president. “What happened was the insurance industry realized the technology that we were developing and that we work on, measures driving behavior.

“The insurance industry started to pull us into the crash detection process to then help them facilitate an engagement with the consumer. What’s happening is this movement, because data is available, into a world where you can be proactive versus reactive. And for the insurance company, it means significant savings. The insurers are going to continue to push in this direction because for them, time is directly money whether that’s in storage costs or rental costs.

From the perspective of Auto Innovators, Senior Vice President of Policy Hilary Cain shared that automakers are focusing on innovations in crash avoidance and post-crash care vehicle features.

A lot of the data collected by vehicles can help make consumer experiences with crashes more efficient and lead to better outcomes, she said.

Cain was asked how OEMs would protect data from going to the right people in the right situation, such as first responders post-crash, and not to health insurers, for example.

“That’s exactly the right question. I think it’s what everyone is struggling with and trying to figure out,” Cain said. “I do think there are some interesting models that we’re seeing emerge.”

Although not telematics-based, GM announced a new app called Collision Assistance during the panel discussion. Its purpose is to help customers navigate what to do following a collision.

Images

Featured image: Maryland State House Senate Chamber. (Credit: Steve Rosenbach/iStock)