Ch. 35

1997 LAWS OF MARYLAND

ACTIVITIES INTO RISK AND NONRISK BUSINESS FOR THE PURPOSE OF DETERMINING
THE CORPORATION'S INCOME THAT IS DERIVED FROM EARNED PREMIUM AND
OTHER SOURCES.

(D) LARGER SURPLUS REQUIRED.

IF THE COMMISSIONER DETERMINES AFTER A HEARING THAT A LARGER
SURPLUS IS NECESSARY FOR THE PROTECTION OF SUBSCRIBERS TO A NONPROFIT
HEALTH SERVICE PLAN, THE COMMISSIONER MAY REQUIRE A CORPORATION
AUTHORIZED UNDER THIS SUBTITLE TO MAINTAIN A SURPLUS IN AN AMOUNT
GREATER THAN THE AMOUNT REQUIRED BY SUBSECTION (B) OF THIS SECTION.

(E) EXCESSIVE SURPLUS; DISTRIBUTION.

(1) THE SURPLUS OF A CORPORATION AUTHORIZED UNDER THIS
SUBTITLE MAY BE CONSIDERED TO BE EXCESSIVE ONLY IF:

(I) THE SURPLUS IS GREATER THAN 30% OF THE TOTAL EARNED
PREMIUM RECEIVED BY THE CORPORATION IN THE IMMEDIATELY PRECEDING
CALENDAR YEAR; AND

(II) AFTER A HEARING, THE COMMISSIONER DETERMINES THAT
THE SURPLUS IS UNREASONABLY LARGE.

(2) AFTER THE COMMISSIONER HAS DETERMINED THE SURPLUS OF A
CORPORATION AUTHORIZED UNDER THIS SUBTITLE TO BE EXCESSIVE, THE
COMMISSIONER:

(I) MAY ORDER THE CORPORATION TO SUBMIT A PLAN FOR
DISTRIBUTION OF THE EXCESS IN A FAIR AND EQUITABLE MANNER; OR

(II) IF THE CORPORATION FAILS TO SUBMIT A PLAN OF
DISTRIBUTION WITHIN 60 DAYS, MAY COMPILE A PLAN AND ORDER THE
CORPORATION TO IMPLEMENT IT.

(3) A DISTRIBUTION ORDERED UNDER PARAGRAPH (2) OF THIS
SUBSECTION MAY BE MADE ONLY TO SUBSCRIBERS WHO ARE COVERED BY THE
CORPORATION'S NONPROFIT HEALTH SERVICE PLAN AT THE TIME THE
DISTRIBUTION IS MADE.

(F) RESTRICTIONS ON DISTRIBUTION.

THE COMMISSIONER MAY NOT ORDER A DISTRIBUTION OR PLAN FOR
DISTRIBUTION UNDER SUBSECTION (E) OF THIS SECTION IF THE DISTRIBUTION
WOULD RENDER THE CORPORATION IMPAIRED OR INSOLVENT UNDER THE LAWS
OF ITS DOMICILIARY STATE OR ANY OTHER STATE IN WHICH THE CORPORATION IS
AUTHORIZED TO DO BUSINESS.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 355A.

In subsection (a)(1) of this section, the former phrase "in § 355 of this
subtitle" is deleted as unnecessary. Only the defined term "surplus" was used

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