Ch. 11

LAWS OF MARYLAND

The stylistic errors occurred in Ch. 553 of the Acts
of 1963.

The stylistic errors were noted by the Michie Company
and by the professional staff of the Legislative
Division of the Department of Legislative Reference.

270.                                                             

(b) The Commissioner shall not approve any such plan or
procedure unless:

(1)  It is equitable to the insurer's members;

(2)  It is subject to approval by vote of not less
than three fourths of the insurer's current members voting
thereon in person, by proxy, or by mail at a meeting of members
called for the purpose pursuant to such reasonable notice and
procedure as may be approved by the Commissioner; if a life
insurer, right to vote may be limited to members who hold
policies other than term or group policies, and whose policies
have been in force for not less than one year;

(3)  The equity of each policyholder in the insurer is
determinable under a fair formula approved by the Commissioner,
which such equity shall be based upon not less than the insurer's
entire surplus (after deducting contributed or borrowed surplus
funds) plus a reasonable present equity in its reserves and in
all nonadmitted assets;

(4)  The policyholders entitled to participate in the
purchase of stock or distribution of assets shall include all
current policyholders and all existing persons who had been a
policyholder of the insurer within three years prior to the date
such plan was submitted to the Commissioner;

(5)  The plan gives to each policyholder of the
insurer as specified in [subdivision (4) above] PARAGRAPH (4) OF
THIS SUBSECTION, a preemptive right to acquire his proportionate
part of all of the proposed capital stock of the insurer, within
a designated reasonable period, and to apply upon the purchase
thereof the amount of his equity in the insurer as determined
under [subdivision (3) above] PARAGRAPH (3) OF THIS SUBSECTION;

(6)  Shares are so offered to policyholders at a price
not greater than to be thereafter offered to others, but at not
more than double the par value of such shares;

(7)  The plan provides for payment to each
policyholder not electing to apply his equity in the insurer for
or upon the purchase price of stock to which preemptively
entitled, of cash in the amount of not less than fifty percent
(50%) of the amount of his equity not so used for the purchase of

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