DATE: June 24, 2026
TO: All Insurers, Nonprofit Health Service Plans, Health Maintenance Organizations, Fraternal Benefit Societies, Dental Plan Organizations, the Maryland Automobile Insurance Fund (“MAIF"), the Maryland Joint Insurance Association (“JIA"), Insurance Producers and Surplus Lines Brokers
RE: Acceptance by Insurers, Producers, and Surplus Lines Brokers of Credit Cards to Pay Insurance Premiums and the Collection of Credit Card Fees Through a Third-Party Processor
This bulletin is being issued to address questions the Maryland Insurance Administration (“Administration") has received regarding Bulletins 17-10 and 25-5.
The Administration's position on the payment of premium by credit card is based on the laws prohibiting unfair discrimination in the terms or conditions of insurance for insureds having like risk characteristics [1] and governing the collection of premiums. Insurers may not accept a premium or charge that is greater or less than the applicable classification and rates filed with the Commissioner or specified by the policy. [2]
Rules for Acceptance of Credit Cards as Payment for Insurance Premiums
Bulletin 17-10 states, in relevant part:
1. If an entity or person accepts premium payments by credit card, the service must be made available to all existing and prospective insureds;
2. Premium discounts to benefit other methods of payment over credit cards are not permitted;
3. The insurer or producer who accepts payment of premiums by credit card may not request or receive any collateral, including but not limited to unearned premiums, as security of payment, unless the party requesting security is registered pursuant to Title 23 of the Insurance Article (premium finance agreements);
4. An insurer may include the cost of accepting late payments or installment payments by credit card, debit card, electronic funds transfer or electronic check payment when calculating the administrative expenses associated with late payments or installment fees. Insurers are reminded that these administrative expenses are subject to review by the Commissioner.
5. When setting rates, an insurer may not deem insureds that elect to make payment by credit card to be a different class than insureds who share similar risk characteristics who elect to pay by other means.
Bulletin 17-10 goes on to say:
1. An insurer may not impose a separate fee or service charge on an insured solely because the insured elects to use a credit card for the payment of premiums.
The Administration has received additional questions about whether costs associated with the use of credit cards for premium payment may be passed through to the policyholder.
One question is whether an insurer may allow a policyholder who chooses to pay by credit card to use a payment processor service, such as, but not limited to Paypal, via link(s) on the insurer's website. The payment processor, which has a contractual relationship with the insurer, would collect an additional fee for the credit card transaction, but would not share any part of the additional fee with the insurer. However, to complete the transaction, the policyholder will need to use the insurer's link and once the insured authorizes the transaction on the payment processor's portal, the policyholder would then be transferred back to the insurer's website to complete the transaction.
The Administration's position is that this arrangement would violate the provisions of law as explained in Bulletin 17-10. The third party vendor is collecting the fee for processing payment by credit card on behalf of the insurer.
An insurer or the Maryland Automobile Insurance fund may submit administrative expenses that are associated with late payment or installment payments as a part of the filed rating plan. These expenses may include costs incurred to accept late payments or installment payments by credit card. These fees may be approved by the Commissioner. The late fee or installment fee may not exceed $10. [3]Please direct any questions concerning this Bulletin to Mary Kwei, Associate Commissioner for Market Regulation and Professional Licensing at (410) 468 – 2113 or [email protected].
MARIE GRANT
Commissioner
Signature on Original
Mary M. Kwei
Associate Commissioner
Market Regulation & Professional Licensing[1] See §§ 27-208, 274-209, and 27-212 of the Insurance Article, Maryland Annotated Code.[2] See § 27-216 of the Insurance Article.[3] See § 27-216(b)(3) of the Insurance Article
