# Md. Code, Insurance § 27-304: –304

> Maryland · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-304

## Section

- **Citation:** Md. Code, Insurance § 27-304
- **Heading:** –304
- **Jurisdiction:** Maryland
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** MD Code / Article gin / Title 27 / Subtitle 3 / Section 27-304

## Text

It is an unfair claim settlement practice and a violation of this subtitle for an insurer, nonprofit health service plan, or health maintenance organization, when committed with the frequency to indicate a general business practice, to:

(1) misrepresent pertinent facts or policy provisions that relate to the claim or coverage at issue;

(2) fail to acknowledge and act with reasonable promptness on communications about claims that arise under policies;

(3) fail to adopt and implement reasonable standards for the prompt investigation of claims that arise under policies;

(4) refuse to pay a claim without conducting a reasonable investigation based on all available information;

(5) fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

(6) fail to make a prompt, fair, and equitable good faith attempt, to settle claims for which liability has become reasonably clear;

(7) compel insureds to institute litigation to recover amounts due under policies by offering substantially less than the amounts ultimately recovered in actions brought by the insureds;

(8) attempt to settle a claim for less than the amount to which a reasonable person would expect to be entitled after studying written or printed advertising material accompanying, or made part of, an application;

(9) attempt to settle a claim based on an application that is altered without notice to, or the knowledge or consent of, the insured;

(10) fail to include with each claim paid to an insured or beneficiary a statement of the coverage under which the payment is being made;

(11) make known to insureds or claimants a policy of appealing from arbitration awards in order to compel insureds or claimants to accept a settlement or compromise less than the amount awarded in arbitration;

(12) delay an investigation or payment of a claim by requiring a claimant or a claimant’s licensed health care provider to submit a preliminary claim report and subsequently to submit formal proof of loss forms that contain substantially the same information;

(13) fail to settle a claim promptly whenever liability is reasonably clear under one part of a policy, in order to influence settlements under other parts of the policy;

(14) fail to provide promptly a reasonable explanation of the basis for denial of a claim or the offer of a compromise settlement;

(15) refuse to pay a claim for an arbitrary or capricious reason based on all available information;

(16) fail to meet the requirements of Title 15, Subtitle 10B of this article for preauthorization for a health care service;

(17) fail to comply with the provisions of Title 15, Subtitle 10A of this article; or

(18) fail to act in good faith, as defined under § 27–1001 of this title, in settling a first–party claim under a policy of property and casualty insurance.

## Nearby sections

- [Md. Code, Insurance § 27-301 §27–301.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-301.md)
- [Md. Code, Insurance § 27-302 §27–302.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-302.md)
- [Md. Code, Insurance § 27-303 §27–303.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-303.md)
- [Md. Code, Insurance § 27-304 §27–304.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-304.md)
- [Md. Code, Insurance § 27-304.1 §27–304.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-304.1.md)
- [Md. Code, Insurance § 27-305 §27–305.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-305.md)
- [Md. Code, Insurance § 27-306 §27–306.](https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-306.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_MD_Agin_T27_S3_S27-304. Check the current official text before relying on it. Not legal advice.