PARRIS N. GLENDENING, Governor                                   Ch. 36

5-205. UNEARNED PREMIUM RESERVES FOR PROPERTY, GENERAL CASUALTY, AND
SURETY INSURANCE.

(A)     REQUIRED.

EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION, EACH INSURER
SHALL MAINTAIN UNEARNED PREMIUM RESERVES ON ALL POLICIES IN FORCE WITH
RESPECT TO:

(1)      INSURANCE AGAINST LOSS OR DAMAGE TO PROPERTY;

(2)      GENERAL CASUALTY INSURANCE; AND

(3)      SURETY INSURANCE.

(B)     AMOUNT OF RESERVES.

THE COMMISSIONER MAY REQUIRE THAT, AFTER DEDUCTING REINSURANCE
CEDED TO SOLVENT INSURERS IN THE MANNER PROVIDED IN THIS ARTICLE, THE
RESERVES EQUAL THE UNEARNED PARTS OF THE GROSS PREMIUMS IN FORCE THAT
ARE COMPUTED ON EACH RESPECTIVE RISK FROM THE POLICY'S DATE OF ISSUE.

(C)     BASIS FOR COMPUTING RESERVES.

RESERVES UNDER THIS SECTION MAY BE COMPUTED, AT THE OPTION OF THE
INSURER, ON A YEARLY OR MORE FREQUENT PRO RATA BASIS.

(D)     CHANGE OF COMPUTING METHOD.

AFTER ADOPTING A METHOD FOR COMPUTING RESERVES, AN INSURER MAY
CHANGE THE METHOD ONLY WITH THE APPROVAL OF THE COMMISSIONER OR THE
INSURANCE SUPERVISORY OFFICIAL OF THE INSURER'S DOMICILE.

(E)     MARINE INSURANCE PREMIUMS ON TRIP RISKS.

(1)      A MARINE INSURANCE PREMIUM ON A TRIP RISK NOT TERMINATED
IS CONSIDERED UNEARNED.

(2)      THE COMMISSIONER MAY REQUIRE AN INSURER TO CARRY
RESERVES FOR UNEARNED PREMIUMS EQUAL TO 100% ON TRIP RISKS WRITTEN
DURING THE MONTH ENDED AS OF THE DATE OF THE INSURER'S ANNUAL
STATEMENT REQUIRED BY THIS ARTICLE.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 78.

In subsection (e)(2) of this section, the reference to "the insurer's annual
statement required by this article" is substituted for the former reference to
the "statement" for clarity.

Defined terms: "Casualty insurance" § 1-101
"Commissioner" § 1-101
"Insurance" § 1-101
"Insurer" § 1-101

- 909 -