HARRY HUGHES, Governor                               2741

contracts, subject to certain limitations, against failure
in the performance of contractual obligations due to the
impairment of the insurer issuing [such] THESE policies or
contracts. To provide this protection;

(1)  An association of insurers is created to
enable the guaranty of payment of benefits and of
continuation of coverages;

(2)  Members of the Association are subject to
assessment to provide funds to carry out the purpose of this
subtitle; and

(3)  The Association is authorized to assist the
Commissioner, in the prescribed manner, in the detection and
prevention of insurer impairments.

527.

In addition to the powers and duties enumerated in
other sections of this subtitle,

(1) If a domestic insurer is an impaired insurer, the
Association may, prior to an order of liquidation or
rehabilitation and subject to any conditions imposed by the
Association other than those which impair the contractual
obligations of the impaired insurer, and approved by the
impaired insurer and the Commissioner,

(a) Guarantee or reinsure, or cause to be
guaranteed, assumed, or reinsured, all the covered policies
OF RESIDENTS of the impaired insurer;

(3) If a domestic insurer is an impaired insurer under
an order of liquidation or rehabilitation, the Association
shall, subject to the approval of the Commissioner,

(a) Guarantee, assume, or reinsure, or cause to
be guaranteed, assumed or reinsured, the covered policies OF
RESIDENTS of the impaired insurer;

SECTION 3 2. AND BE IT FURTHER ENACTED, That this
Act shall take effect July 1, 1981.

Approved May 19, 1981.

CHAPTER 733
(Senate Bill 688)
AN ACT concerning

Unauthorized Insurers - Exemptions