WILLIAM DONALD SCHAEFER, Governor                       Ch. 6

(b) (3) If the reason for the cancellation or nonrenewal is
loss of or substantial changes in reinsurance, the plan of
withdrawal shall contain a statement:

(i) That the insurer has made a good faith
effort to obtain replacement reinsurance, but was unable to do so
due to either the unavailability or unaffordability [or] OF
replacement reinsurance;

(ii) Explaining how the loss of, or reduction
in, reinsurance affects the company's risks throughout the entire
line or category of insurance proposed for cancellation or
nonrenewal; and

(iii) Explaining why cancellation or nonrenewal
is necessary to cure the loss of or reduction in available
reinsurance.

DRAFTER'S NOTE:

Error: Incorrect word usage in Article 48A, §
240A(b)(3)(i).

Occurred: Ch. 455, Acts of 1987.

240AA.

(b)  An insurer intending to take an action subject to the
provisions of this section shall, on or before 45 days prior to
the proposed effective date of the action, send written notice of
its intended action to the insured at his last known address. A
written notice of cancellation or nonrenewal shall be sent by
certified mail. All other notices of action subject to the
provisions of this section shall be sent by certificate of
mailing. The notice shall be in triplicate, and shall state in
clear and specific terms, on a form approved by the Commissioner:

(3) The insurer's actual reason or reasons for
proposing to take such action. The statement of reasons shall be
sufficiently clear and specific so that a person of average
intelligence can identify the basis for the insurer's decision,
without making further inquiry. Generalized terms such as
"personal habits[,"]", "living conditions[,"]", "poor [morale,"]
MORALS", or "violation or accident record" shall not suffice to
meet the requirements of this section;

(c)  Any statement of reasons contained in the notice given
pursuant to subsection (b) (3) [hereof] OF THIS SECTION shall be
privileged and shall not constitute grounds for any action
against the insurer or its representatives or any person who in
good faith furnishes to the insurer the information upon which
the statement is based.

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