Maryland § 27-502

§ 27-502.

    (a)    A surety insurer may not cancel or refuse to issue or renew a surety bond for a reason based wholly or partly on race, color, creed, sex, or physical handicap or disability of an applicant or principal or for any other arbitrary, capricious, or unfairly discriminatory reason.

    (b)    A surety insurer may not require special conditions, facts, or situations as a condition to its acceptance or renewal of a particular surety risk in an arbitrary, capricious, unfair, or discriminatory manner based wholly or partly on race, creed, color, sex, religion, national origin, place of residence, or physical handicap or disability.

    (c)    A surety insurer may not make an inquiry about race, creed, color, or national origin in a surety form, questionnaire, or other manner of requesting general information that relates to an application for a surety bond.

    (d)    On request, a surety insurer that intends to cancel or refuse to issue or renew a surety bond shall send to the bondholder or applicant written notice that states the reason for the proposed action.

    (e)    (1)    A person aggrieved under this section shall notify the Commissioner in writing within 30 days after the occurrence giving rise to the complaint and shall state the facts giving rise to the complaint.

        (2)    On receipt of a complaint, the Commissioner shall forward a copy of the complaint to the surety insurer.

        (3)    If the Commissioner finds that the complaint is without merit, the Commissioner shall dismiss the complaint without a hearing and shall notify the surety insurer and complainant promptly in writing.

        (4)    If the complaint is not dismissed without a hearing, the Commissioner shall:

            (i)    hold a hearing on the complaint within 30 days after receipt of the complaint; and

            (ii)    give written notice of the time and place of the hearing to all parties at least 10 days before the hearing.

        (5)    At a hearing to determine whether this section has been violated, the burden of persuasion is on the surety insurer to show that the cancellation or refusal to underwrite or renew is not based wholly or partly on race, color, creed, sex, or physical handicap or disability of an applicant or principal or for any unfairly discriminatory reason.

        (6)    If, after the hearing, the Commissioner finds that the surety insurer has violated this section, the Commissioner may issue an appropriate order that:

            (i)    states the manner in which the surety insurer has violated this section;

            (ii)    provides relief under subsection (g) or (h) of this section; and

            (iii)    states when, within a reasonable period but not less than 10 days after the hearing, the order shall be effective.

    (f)    (1)    Any information or testimony provided by a surety insurer pursuant to a complaint under this section is privileged and confidential.

        (2)    There is no liability on the part of and no cause of action against a surety insurer, its representatives, or another person who in good faith provides to the surety insurer information or testimony that relates to the complaint.

    (g)    If the Commissioner finds that a surety insurer has willfully violated this section, the Commissioner may impose a fine on the surety insurer in accordance with § 1-301 of this article.

    (h)    Instead of the fine provided in subsection (g) of this section, the Commissioner may order the surety insurer to write the bond if, at the hearing, the Commissioner finds by a preponderance of the evidence that the violation of subsection (a) or (b) of this section was knowing and willful and was the basis for the surety insurer’s action.