HARRY HUGHES, Governor

853

CHAPTER 232

(Senate Bill 229)

AN ACT concerning

Maryland Insurance Guaranty Association

FOR the purpose of changing the definition of "insolvent
insurer" under the Maryland Insurance Guaranty
Association subtitle to clarify that insolvency must be
determined by the state of the insurer's domicile; and
correcting an error as to the number of separate
accounts into which the Association shall be divided.

BY repealing and reenacting, with amendments,

Article 48A - Insurance Code

Section 505(d) and 508(a)(3)

Annotated Code of Maryland

(1972 Replacement Volume and 1978 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article 48A - Insurance Code

505.

As used in this subtitle:

(d) "Insolvent insurer" means (1) an insurer
authorized to transact insurance in this State either at the
time the policy was issued or when the insured event
occurred, and (2) [is determined to be insolvent by a court
of competent jurisdiction] AN INSURER AGAINST WHOM A FINAL
ORDER OF LIQUIDATION, WITH A FINDING OF INSOLVENCY, HAS BEEN
ENTERED BY A COURT OF COMPETENT JURISDICTION IN THE
INSURER'S STATE OF DOMICILE.

508.

(a) The Association shall:

(3) Allocate claims paid and expenses incurred
among the [four] FIVE accounts separately, and assess member
insurers separately for each account in amounts necessary to
pay the obligation of the Association under paragraph (1)
subsequent to an insolvency, the expenses of handling
covered claims subsequent to an insolvency, the cost of
examinations under § 513 and other expenses authorized by
this subtitle. The assessments of each member insurer
shall be in the proportion that the net direct written
premiums of the member insurer for the preceding calendar
year on the kinds of insurance in the account bears to the