WILLIAM DONALD SCHAEFER, Governor

in accordance with policy limitations, exclusions, conditions,
deductibles, and loss sharing requirements.

553.

(a)  A rate Stabilization Reserve Fund is established to be
entered as a liability of the Society and its subsidiaries along
with other premium and loss reserves. The Fund shall be
administered and valued annually by three directors of the
Society and one director from each of its subsidiaries, together
with the Commissioner of Insurance or his deputy.

(b)  Each policyholder of the Society and its subsidiaries
shall pay a Stabilization Reserve Fund charge. The directors of
the Society and its subsidiaries shall determine the amount of
the Stabilization Reserve Fund charge. This charge shall be
separately stated in the policy. The Society and its subsidiaries
shall cancel the policy of any policyholder who fails to pay the
Stabilization Reserve Fund charge.

(c)  Collection of the Stabilization Reserve Fund charge
shall continue until such time as the net balance of the
Stabilization Reserve Fund is not less than the projected sum of
premiums to be written in the year following the valuation, date.
The Fund shall be credited with all reserve fund charges
collected from policyholders and, in any year the Society or its
subsidiaries sustains an operating loss, be charged with the
loss.

(d)  Each policyholder shall be subject to assessment as
provided in §§ 6-509, 6-510 and 6-511 of the Corporations and
Associations Article, except that:

(1)  The amount of all assessments may not exceed a
full year's premium calculated as of the policy anniversary next
preceding the time of assessment.

(2)  The amount specified in paragraph (1) shall be
further reduced in the proportion that the percentage of the net
balance of the Stabilization Reserve Fund at the time of
assessment bears to $5,000,000.

(3)  Upon the Commissioner's approval, the assessable
liability of the policyholders not in excess of 5% of one year's
annual premium may be extinguished.

(e)  Notwithstanding provisions of subsection (d) of this
section, the Society and its subsidiaries may issue nonassessable
policies subject to the provisions of Sections 262 and 263, and
all other applicable provisions of this article and the
Corporations and Associations Article when the Society and its
subsidiaries meet all applicable requirements of this article

- 3647 -