HARRY HUGHES, Governor                                      3691

precise nature and details of the transactions, INCLUDING SUCH
ACCOUNTING INFORMATION AS IS NECESSARY TO SUPPORT THE
REASONABLENESS OF THE CHARGES OR FEES TO THE RESPECTIVE PARTIES;
[and]

(3)  The insurer's assets and surplus as regards
policyholders following any such transactions including dividends
or distributions to shareholder affiliates shall be reasonable in
relation to the insurer's outstanding liabilities and adequate to
its financial needs;

(4)  CHARGES OR FEES FOR SERVICES PERFORMED SHALL BE
REASONABLE; AND

(5)  EXPENSES INCURRED AND PAYMENT RECEIVED SHALL BE
ALLOCATED TO THE INSURER IN CONFORMITY WITH CUSTOMARY INSURANCE
ACCOUNTING PRACTICES CONSISTENTLY APPLIED.

(b) For purposes of this subtitle, in determining whether
an insurer's assets and surplus as regards policyholders are
reasonable in relation to the insurer's outstanding liabilities
and adequate to its financial needs, the following factors, among
others, shall be considered:

(1)  The size of the insurer as measured by its
assets, capital and surplus, reserves, premium writings,
insurance in force and other appropriate criteria;

(2)  The extent to which the insurer's business is
diversified among the several lines of insurance;

(3)  The number and size of risks insured in each line
of business;

(4)  The extent of the geographical dispersion of the
insurer's insured risks;

(5)  The nature and extent of reinsurance of the
insurer's risks;

(6)  The quality, diversification, and liquidity of
the insurer's investment portfolio;

(7)  The recent past and projected future trends in
the size of the insurer's surplus as regards policyholders;

(8)  The surplus as regards policyholders maintained
by other, comparable insurers;

(9)  The financial position of the insurer in the
light of investments in and other transactions with affiliated
persons.

(C) THE FOLLOWING TRANSACTIONS INVOLVING A DOMESTIC INSURER
AND ANY PERSON IN ITS HOLDING COMPANY SYSTEM MAY NOT BE ENTERED