HARRY HUGHES, Governor                                       3693

THOSE SEPARATE TRANSACTIONS IS TO AVOID THE STATUTORY THRESHOLD
AMOUNT AND THUS AVOID THE REVIEW THAT WOULD OCCUR OTHERWISE.

(2) IF THE COMMISSIONER DETERMINES THAT SUCH SEPARATE
TRANSACTIONS WERE ENTERED INTO DURING ANY 12-MONTH PERIOD FOR
SUCH PURPOSE, HE MAY EXERCISE HIS AUTHORITY UNDER § 500 OF THIS
ARTICLE.

(E)  THE COMMISSIONER, IN REVIEWING TRANSACTIONS UNDER
SUBSECTION (C) OF THIS SECTION, SHALL CONSIDER:

(1)  WHETHER THE TRANSACTIONS COMPLY WITH THE
STANDARDS SET FORTH IN SUBSECTION (A) OF THIS SECTION; AND

(2)  WHETHER THE TRANSACTIONS MAY ADVERSELY AFFECT THE
INTERESTS OF POLICYHOLDERS.

(F)  THE COMMISSIONER SHALL BE NOTIFIED WITHIN 30 DAYS OF
ANY INVESTMENT OF A DOMESTIC INSURER IN ANY ONE CORPORATION IF
THE TOTAL INVESTMENT IN SUCH CORPORATION BY THE INSURANCE HOLDING
COMPANY SYSTEM EXCEEDS 10 PERCENT OF THE CORPORATION'S VOTING
SECURITIES.

(G)  NOTHING IN THIS SECTION SHALL BE DEEMED TO AUTHORIZE OR
PERMIT ANY TRANSACTIONS WHICH, IN THE CASE OF AN INSURER, NOT A
MEMBER OF THE SAME HOLDING COMPANY SYSTEM, WOULD BE OTHERWISE
CONTRARY TO LAW.

497.

(b) For the purpose of this section, extraordinary dividend
or distribution includes any dividend or distribution of cash or
other property, BUT NOT INCLUDING PRO RATA DISTRIBUTIONS OF ANY
CLASS OF THE INSURER'S OWN SECURITY, whose fair market value
together with that of other dividends or distributions made
within the preceding twelve months exceed the greater of:

(1)  (I) [Ten (10)] 10 percent, except for insurance
subsidiaries of the Medical Mutual Liability Insurance Society of
Maryland (Article 48A, Subtitle 36 of the Code) which shall be
[five (5)] 5 percent, of the insurer's surplus as regards
policyholders as of the 31st day of December next preceding[,] IF
THE REMAINING SURPLUS AS REGARDS POLICYHOLDERS AFTER PAYMENT OF
ANY SUCH DIVIDEND WILL BE LESS THAN THE SUM OF $10,000,000 PLUS
10 PERCENT OF THE INSURER'S ADMITTED ASSETS; OR

(II) 25 PERCENT OF THE INSURER'S SURPLUS AS
REGARDS POLICYHOLDERS AS OF THE 31ST DAY OF DECEMBER NEXT
PRECEDING, IF THE REMAINING SURPLUS AS REGARDS POLICYHOLDERS
AFTER PAYMENT OF ANY SUCH DIVIDEND WILL BE EQUAL TO OR GREATER
THAN THE SUM OF $10,000,000 PLUS 10 PERCENT OF THE INSURER'S
ADMITTED ASSETS; or

(2)  (I) [The] FROM JULY 1, 1986 TO DECEMBER 31, 1987,
THE net gain from operation of the insurer, if the insurer is a