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Maryland Automobile Insurance Fund(3)

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									                                                    Maryland Automobile Insurance Fund

                                                                                      1750 Forest Drive
                                                                             Annapolis, MD 21401-4294



FOR IMMEDIATE RELEASE
Contact: Delegate Marvin Holmes, 410-841-3098
         MAIF Contact: Adrienne Cousler 410-269-8598


  DELEGATE MARVIN HOLMES PROPOSES LEGISLATION TO GIVE
      PRINCE GEORGE’S COUNTY RESIDENTS A CHOICE ON
              AUTOMOBILE INSURANCE RATES
(February 16, 2006) – Prince George’s County Delegate Marvin Holmes recently introduced
House Bill 1505, legislation that would benefit Maryland residents who purchase insurance
through Maryland Automobile Insurance Fund (MAIF). Prince George’s County has the largest
number of MAIF policyholders at 28%. If approved, the proposed legislation would give MAIF
policyholders, the option of paying premiums through installments, rather than in advance.
MAIF is the only insurance company in Maryland that cannot accept installment payments from
its policyholders.

Currently, state law prohibits MAIF from allowing its customers to pay their premiums through
installment billing. Without money to pay an entire premium in advance, these customers must
borrow from high cost finance companies, adding hundreds of dollars in interest and hidden fees
to the cost. In many cases, these Premium Finance Companies (PFC’s) will charge APR’s of
26% and higher to the policyholder. And unlike credit cards, when a MAIF insured cannot make
the PFC payment, the PFC will cancel the insurance policy. Many of these policyholders will
then choose to forgo insurance and drive without coverage. Approximately 96% of all MAIF
policies are financed through PFC’s and over 60% of MAIF cancellations are at the request of
PFC’s.

Delegate Holmes said, “I look forward to passage of this legislation and to lower car insurance
rates for the nearly 30,000 MAIF customers in Prince Georges County”

 “The issue of MAIF accepting installment payments from its customers has always been an
issue of choice,” said M. Kent Krabbe, MAIF’s Executive Director. “We have the capability and
knowledge at MAIF to bring this option to our customers. Direct billing at MAIF is the moral
and sensible thing to do. My sincere thanks to Delegate Holmes for giving a voice to our
policyholders in Prince George’s County and throughout Maryland.”

The Maryland Automobile Insurance Fund is a quasi-state agency that provides automobile
insurance to eligible Maryland residents that have been turned down by two private carriers or
cancelled by one. MAIF receives no General Funds or taxpayer money from the State of
Maryland. Its operating funds are comprised of insurance premiums written and from MAIF’s
investment income.

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