Maryland’s Flawed UM/UIM “Pay-To-Play” Statute

Recently, we have been seeing more and more problems in trying injury cases involving Maryland uninsured or underinsured motorists.

Md. Insurance Code Ann. § 19-511 states the procedures that must be followed in settling UM/UIM claims. We call it the “pay to play” statute. Basically, it says that once the liability carrier tenders a policy limits offer, the UM carrier has 60 days to decide whether to consent to acceptance of the offer. If the UM carrier says no, they have to pay the inured person the amount of the settlement offer.

Essentially, this gives the liability carrier 60 days to decide whether to waive subrogation. If they don’t waive, they have to pay the amount of the liability offer to the claimant, but the UM carrier retains its subrogation rights.

That’s all well and good. The problem comes in when the liability carrier tenders the policy limits within 60 days of the trial date. The statute gives the UM carrier a mandatory 60 days to decide what to do. What has been happening is that when the liability policy is offered 60 days or less from trial, UM carriers have been objecting to postponement requests to allow for the completion of the 60 day period.

This has the effect of depriving the plaintiff of the amount offered. The plaintiff cannot accept the liability offer without the consent of UM, while the UM carrier has the entire 60 period to decide, and is simultaneously objecting to a continuance to allow for the statutorily required period. This clearly frustrates the intent of the statute and renders it ineffective in these factual circumstances.

There has to be a solution to this problem. I can think of a few possible ones. Maybe we will get an appellate opinion directing administrative judges to allow continuances to comply with the statute. This would require some judge to abuse their discretion and deny a continuance in such a situation. That shouldn’t be too hard, since I understand several judges in Maryland are doing exactly that. Or perhaps the UM carrier’s actions in trying to have its cake and eat it too will be determined to be indicative of a lack of good faith.

Probably the best way to fix the problem would be to amend the “pay to play” statute to fix this loophole. This could be a good issue for the Maryland Trial Lawyers Association’s Legislative Committee to take a look at.