WILLIAM DONALD SCHAEFER, Governor Ch. 518

fiduciaries as to certain premium moneys received by them on behalf of moneys
received by them in connection with certain policies or applications for policies issued
by, to be issued by, or to be bound in the Maryland Automobile Insurance Fund;
requiring certain insurance agents and brokers to deposit in an escrow a premium
account certain moneys received by them in a fiduciary capacity; and generally
relating to certain insurance agents and brokers under doing business with the
Maryland Automobile Insurance Fund.

BY repealing and reenacting, with amendments,
Article 48A - Insurance Code
Section 243B(f)
Annotated Code of Maryland
(1986 Replacement Volume and 1989 Supplement)

BY repealing and reenacting, without amendments,
Article 48A - Insurance Code
Section 243L(1)
Annotated Code of Maryland
(1986 Replacement Volume and 1989 Supplement)

Preamble

WHEREAS, Certain producers under the Maryland Automobile Insurance
Fund, who are defined as certain insurance agents and brokers, who owe premium
money to the Maryland Automobile Insurance Fund and to certain premium finance
companies have filed, or have threatened to file, for bankruptcy in order to be
discharged of their debt to the Fund and to others; and

WHEREAS, The decisions of the various Bankruptcy Courts generally have
allowed these debts to be discharged in bankruptcy unless there is an actual or statutory
trust clearly imposed on the agent or broker with respect to the moneys received on
behalf of the Fund; and

WHEREAS, The Fund's statutory scheme is unique, does not authorize the
Fund to enter into agency agreements with producers, and imposes no clear trust on the
premium or return premium paid to producers; and

WHEREAS, The General Assembly finds it important to establish clearly that
producers are fiduciaries for the benefit of the Fund and others with respect to all
premium or other moneys that the producers receive on behalf of the Fund; now,
therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 48A - Insurance Code

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