THEODORE R. MCKELDIN, GOVERNOR 1915

sub-title "Mutual Insurance Companies", relating to divi-
dends on policies of such companies, and providing the
manner and conditions of the declaration and payment of
such dividends.

SECTION 1. Be it enacted by the General Assembly of Mary-
land, That Section 163 (Dividends on Policies) of Article 48A
of the Annotated Code of Maryland (1939 Edition), title
"Insurance", sub-title "Mutual Insurance Companies", be and
it is hereby repealed and re-enacted, with amendments, to
read as follows:

163. (Dividends on Policies. ) From time to time the di-
rectors of any such company may, by vote, fix and determine
[the percentage of] dividends [or expiration return of pre-
mium] to be paid [on expiring policies, which percentages
may differ, following the different loss experience of different
classes of risks of the same term. But all policies insuring
risks in the same classification, shall have an equal rate of
dividend or expiration return of premium for the same term,
and in case of an assessment, the rate thereof may be different
for each different class of risks, provided that every policy
in a company thus dividing its risks into two or more classifi-
cations shall, when issued, bear an endorsement clearly indi-
cating the class to which it is assigned. Every policyholder
of a domestic company, and every policyholder in this State
of a company of another state or foreign country, shall be
notified at his last known address within six months after
the expiration of his policy of the amount of any dividend or
expiration of premium declared and payable thereon, unless
in the meantime such dividend or return has been paid in cash
or applied in payment of the premium on the renewal of the
policy. ] to policyholders on participating policies from the
earned surplus of such company, and when declared shall
establish an adequate reserve from which such dividends are
to be paid. No such dividend shall be declared or paid if by
the payment thereof the minimum surplus or other required
surplus of such company will be impaired. In declaring or
paying any such dividend the board of directors of such com-
pany may make reasonable classifications of policies, and poli-
cies in the same classification shall be treated without unfair
discrimination. If any such company shall offer an alternative
method or plan for dividend classifications, the policy shall
contain an endorsement setting forth the class to which it is
assigned. Each such company shall establish a procedure
which makes reasonable provision for notice to the policy-
holder respecting dividends declared and payable under his
policy.