3402

LAWS OF MARYLAND

Ch. 558

excess reserves to certain specified subscribers to the
plan; and altering the standard for reasonable
reserves.

BY repealing and reenacting, with amendments,

Article 48A - Insurance Code

Section 355(b)(66)

Annotated Code of Maryland

(1979 Replacement Volume and 1981 Supplement)

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

Article 48A - Insurance Code

355.

(b) The Insurance Commissioner shall issue a
certificate of authority or license to each applicant upon
the payment of the fees provided for by § 41 of this article
and upon being satisfied:

(6) That the corporation shall maintain a
[minimum] REASONABLE reserve [equal to at least 3% of the
subscription charges earned during the prior calendar year
as shown on the annual statement filed in the office of the
Commissioner]. If the Commissioner determines after a
hearing that the reserves are excessive in amount, he may
order the corporation to submit a plan for distribution of
the excess in a fair and equitable method, or in the event
the corporation fails to submit such a plan within 60 days,
he may compile a plan and order the corporation to implement
it. THE DISTRIBUTION SHALL BE MADE ONLY TO SUBSCRIBERS WHO
ARE COVERED BY THE CORPORATION AT THE TIME DISTRIBUTION IS
MADE. Reserves equal to 2 months of the nonprofit health
service plan's prior calendar year's claims and operating
expenses shall be considered reasonable [provided they are
in excess of minimum reserve requirements].

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1982.

Approved June 1, 1982.

CHAPTER 559
(Senate Bill 851)