At least nine Maryland premium loan companies charged Maryland Automobile Insurance Fund policyholders more interest than allowed by state law, insurance regulators said Monday.

The companies, which loan policyholders money for auto insurance premiums and collect interest on the financing upfront, were ordered Monday to adhere to state-mandated guidelines on interest rates.

The Maryland Auto Insurance Fund (MAIF) is the state’s auto insurer of last resort for individuals and businesses.

Under state law, companies can charge 1.15 percent on premium loans for every 30 days of the loan. Maryland Insurance Administration Commissioner Ralph Tyler said an investigation into the charges ­­— from November 2007 through April 2008 ­— revealed that the companies had miscalculated the interest or overcharged.

He said at least two of the companies — Baltimore-based Insurance Billing Services and Greenbelt-based U.S. Capital Associates ­— were charging interest on policies that hadn’t been financed or were canceled before the loan term ended. He said the two companies were ordered to refund those fees to policyholders and pay them an additional six percent interest.

Executives with those companies could not be immediately reached Monday.

Among the companies listed in the order are: Lithicum-based Agency Services Inc.; Baltimore-based Central Acceptance Co., Inc.; Baltimore-based Gebco Insurance Associates, Inc./Crown Premium Funding Co.; Baltimore-based H&S Finance Co.; Baltimore-based Insurance Billing Services; Baltimore-based Insurance Payment Plan Inc.; Owings Mills-based Premium Finance of America, Inc.; Laurel-based Senate Acceptance Corp.; Greenbelt-based U.S. Capital Associates.
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