1568                                    LAWS OF MARYLAND                                 Ch. 273

adopted by the board, and that he knew or should have known
that such binding was in violation of such rules and
regulations, the board may refuse to accept further
applications from such agent or broker, and may terminate
the right of such agent to bind coverage.

(F)  IF, AFTER DEMAND HAS BEEN MADE BY THE FUND, THE
AGENT OR BROKER FAILS TO PAY ANY MONEY THAT IS DUE THE FUND
AS A RESULT OF THE BINDING OR CHANGE OF COVERAGE, OR AS A
RESULT OF ANY COMMISSION PAID TO THE AGENT OR BROKER ON ANY
POLICY THAT IS CANCELLED AFTER THE EFFECTIVE DATE OF
COVERAGE, THE BOARD MAY REFUSE TO ACCEPT FURTHER
APPLICATIONS FROM THE AGENT OR BROKER, TERMINATE THE
AUTHORITY OF THE AGENT OR BROKER TO BIND COVERAGE WITH THE
FUND, OR BOTH.

(G) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS
SUBSECTION, THE BOARD SHALL GIVE PRIOR WRITTEN NOTICE TO AN
AGENT OR BROKER OF ITS INTENDED ACTION UNDER SUBSECTION (E)
OR (F) OF THIS SECTION, AND PROVIDE THE AGENT OR BROKER AN
OPPORTUNITY FOR A HEARING PRIOR TO TAKING THE ACTION.

(2)  IF THE BOARD DETERMINES THAT THERE IS A
LIKELIHOOD OF SUBSTANTIAL AND IMMEDIATE HARM TO THE FUND,
POLICYHOLDERS OF THE FUND, OR OTHERS BECAUSE OF A VIOLATION
OF A BINDING RULE OF THE FUND OR BECAUSE OF A FAILURE TO PAY
ANY MONEY DUE, THE BOARD MAY EXERCISE IMMEDIATELY ANY OPTION
AVAILABLE TO IT UNDER SUBSECTIONS (E) AND (F) OF THIS
SECTION PENDING PROMPT NOTICE AND A HEARING WITHIN 10 DAYS.

(3)  THE BOARD SHALL ADOPT RULES AND REGULATIONS
GOVERNING THE PROCEDURES FOR NOTICE AND ANY HEARING THAT IS
PROVIDED UNDER THIS SUBSECTION.

[(f)] (H) Any private insurer desiring to assume
insurance coverage of any policyholder insured by the Fund
may do so, provided notice of the proposal is given to the
Fund at least 60 days prior to the termination of the
policy, with the approval of the insured, upon receipt of
such notice, the Fund shall notify the insured that he will
no longer be eligible for insurance from the Fund.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1981.

Approved May 12, 1981.

CHAPTER 274
(Senate Bill 305)
AN ACT concerning