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Dear Shane F.
Insurance companies and the insurance industry is regulated by each state. Normally, being regulated to sell or offer insurance in a state means that the company needs to be licensed by a state's insurance department or bureau. To offer insurance through the internet (just like offering loans or consumer lending products over the Internet) requires those companies on the Internet to first obtain state licensing in any state they plan to conduct business in (and licensing in each state requires completion of certain state forms, often a certain required minimum asset number, and often a physical state location or contact office at least). The methods to become regulated and how to assure one is legally operating as an insurer in a state are established by a state's legislature and presented in a state's statutes (or laws) and also in "regulations" which are drafted by the actual state agency which supervises/regulates the business.
In MD the state agency that regulates insurance companies and business is the MD Insurance Administration. To learn what is required for a specific type of insurance business and how to file for a license, you can contact them here. The laws which apply to the insurance business and industry in the state can be found here
That does not sound correct to me, because by paying to have them pay for a ticket (just like people pay insurance so a doctor, bank, or an accident victim may be paid) one seems to be buying coverage "in case" something happens, like surgery, a fire, or an accident but, if nothing happens, one does not get that money back. So, that would seem to be a system just like insurance. Legal rights and duties are often determined through interpretations of law, however, and, as the regulatory agency in charge of insurance, the MD Insurance Administration, which provides a consumer services to help consumers answer questions regarding insurance can be contacted here to answer direct questions regarding who should or should not be regulated by them.
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