1498                             Laws of Maryland                      [Ch. 703

(b)    In approving selections to the board, the Commissioner shall
consider among other things whether all member insurers are fairly
represented.

(c)    Members of the board,, except the Commissioner, may be re-
imbursed from the assets of the Association for expenses incurred
by them as members of the board of directors.

508. Powers and Duties of the Association,
(a) The Association shall:

(1)    Be obligated to the extent of the covered claims existing prior
to the determination of insolvency and arising within 30 days after
the determination of insolvency, or before the policy expiration date
if less than 30 days after the determination, or before the insured
replaces the policy or causes its cancellation, if he does so within
30 days of the determination, but such obligation shall include only
that amount of each covered claim which is in excess of $100 and is
less than $300,000. $50. In no event shall the Association be obligated
to a policyholder or claimant in an amount in excess of the obliga-
tion of the insolvent insurer under the policy from which the claim
arises.

(2)    Be deemed the insurer to the extent of its obligation on the
covered claims and to such extent shall have all rights, duties, and
obligations of the insolvent insurer as if the insurer had not become
insolvent.

(3)    Allocate claims paid and expenses incurred among the three
FOUR accounts separately, and assess member insurers separately
for each account in amounts necessary to pay the obligation of the
Association under paragraph (1) subsequent to an insolvency, the
expenses of handling covered claims subsequent to an insolvency, the
cost of examinations under Section 513 and other expenses authorized
by this Act. The assessments of each member insurer shall be in the
proportion that the net direct written premiums of the member
insurer for the preceding calendar year on the kinds of insurance
in the account bears to the net direct written premiums of all mem-
ber insurers for the preceding calendar year on the kinds of insur-
ance in the account. Each member insurer shall be notified of the
assessment not later than 30 days before it is due. No member in-
surer may be assessed in any year on any account in an amount
greater than 2% of that member insurer's net direct written pre-
miums for the preceding calendar year on the kinds of insurance in
the account. If the maximum assessment, together with the other
assets of the Association in any account, does not provide in any
one year in any account an amount sufficient to make all necessary
payments from that account, the funds available shall be pro-rated
and the unpaid portion shall be paid as soon thereafter as funds
become available. The Association may exempt or defer, in whole
or in part, the assessment of any member insurer, if the assessment
would cause the member insurer's financial statement to reflect
amounts of capital or surplus less than the minimum amounts re-
quired for a certificate of authority by any jurisdiction in which the
member insurer is authorized to transact insurance. Each member
insurer may set off against any assessment, authorized payments
made on covered claims and expenses incurred in the payment of