HARRY HUGHES, Governor                                    1619

relating generally to the payment of covered claims of
persons under insurance policies or surety bonds issued by
insolvent insurers.

BY repealing and reenacting, with amendments,

Article 48A - Insurance Code

Section 504(a), 505, 506, 508(a), 510(b), 512, and 516

Annotated Code of Maryland

(1979 Replacement Volume and 1985 Supplement)

Preamble

WHEREAS, The Maryland Insurance Guaranty Association was
created by the Maryland General Assembly to provide a mechanism

for the prompt payment of covered claims under certain insurance
policies and to avoid financial loss to claimants or

policyholders because of the insolvency of an insurer; and

WHEREAS, A recent insolvency of a surety insurer has proven
to the Maryland General Assembly that the law covering the
Maryland Insurance Guaranty Association must be changed so that
covered claims caused by this recent insolvency can be paid off
promptly; and

WHEREAS, The General Assembly of Maryland has determined
that the general welfare of the people of Maryland in the vital
area of insurance, particularly those who are claimants or
policyholders of any member of the Maryland Insurance Guaranty
Association which becomes insolvent, requires the retroactive
application of this Act; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF

MARYLAND, That the Laws of Maryland read as follows:

Article 48A - Insurance Code
504.

(a) (1) The purposes of this subtitle are to provide a
mechanism for the prompt payment of covered claims under certain
insurance policies and to avoid financial loss to RESIDENTS OF
MARYLAND WHO ARE claimants or policyholders [because of the
insolvency] of an insurer, INCLUDING SURETY, WHICH HAS BECOME
INSOLVENT; to assist in the detection and prevention of insurer
insolvencies; and to provide for the assessment of the cost of
such payments and protection among insurers.

(2) ALL PROVISIONS OF THIS SUBTITLE SHALL APPLY TO
ANY INSURER INSOLVENCY, INCLUDING SURETY, EXISTING AS OF JANUARY
1, 1985.

505.