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Session Laws, 1963
Volume 671, Page 1130   View pdf image (33K)
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1132                           LAWS OF MARYLAND                       [CH. 553

such modification shall be effective retroactively, nor as to any insur-
ance contract issued prior thereto.

287.    Attorney's Bond.

(a)   Concurrently with the filing of the declaration provided for
in section 283, the attorney of a domestic reciprocal insurer shall
file with the Commissioner a bond in favor of this State for the
benefit of all persons damaged as a result of breach by the attorney
of the conditions of his bond as set forth in subsection (b) hereof.
The bond shall be executed by the attorney and by an authorized cor-
porate surety, and shall be subject to the Commissioner's approval.

(b)   The bond shall be in the penal sum of one hundred thousand
dollars ($100,000), aggregate in form, conditioned that the attorney
will faithfully account for all money and other property of the
insurer coming into his hands, and that he will not withdraw or
appropriate to his own use from the funds of the insurer, any money
or property to which he is not entitled under the power of attorney.

(c)   The bond shall provide that it is not subject to cancellation
unless thirty (30) days' advance notice in writing of cancellation is
given both the attorney and the Commissioner.

288.    Action on Bond.

Action on the attorney's bond may be brought at any time by one
or more subscribers suffering loss through a violation of its condi-
tions, or by a receiver or liquidator of the insurer. Amounts recov-
ered in any such action shall be deposited in and become part of the
insurer's funds. The total aggregate liability of the surety shall be
limited to the amount of the penalty of such bond.

289.    Annual Statement.

(a)   The annual statement of a reciprocal insurer shall be made
and filed by its attorney.

(b)   The statement shall be supplemented by such information as
may be required by the Commissioner relative to the affairs and
transactions of the attorney insofar as they relate to the reciprocal

290.    Contributions to Insurer.

The attorney or other parties may advance to a domestic recipro-
cal insurer upon reasonable terms such funds as it may require from
time to time in its operations. Sums so advanced shall not be treated
as a liability of the insurer, and, except upon liquidation of the
insurer, shall not be withdrawn or repaid except out of the insurer's
realized earned surplus in excess of its minimum required surplus.
No such withdrawal or repayment shall be made without the advance
approval of the Commissioner. This section does not apply to bank
loans or to loans for which security is given.

291.    Financial Condition—Method of Determining.

In determining the financial condition of a reciprocal insurer the
Commissioner shall apply the following rules:

(a) He shall charge as liabilities the same reserves as are re-
quired of incorporated insurers issuing nonassessable policies on a
reserve basis.


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Session Laws, 1963
Volume 671, Page 1130   View pdf image (33K)
 Jump to  

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