Ch. 564                                       LAWS OF MARYLAND

reserves that should have been established for all policies of
insurance written by the impaired insurer.

(4)  (a) Prior to the termination of any liquidation,
rehabilitation, or conservation proceeding, the court may take
into consideration the contributions of the respective parties,
including the [Association] CORPORATION, the shareholders and
policy owners of the impaired insurer, and any other party with a
bona fide interest, in making an equitable distribution of the
ownership rights of such impaired insurer. In such a
determination, consideration shall be given to the welfare of the
policyholders of the continuing or successor insurer.

(b) No distribution to stockholders, if any, of an
impaired insurer shall be made until [and unless] the total
amount of assessments levied by the [Association] CORPORATION
with respect to such insurer have been fully recovered by the
[Association] CORPORATION.

(5)  It shall be a prohibited unfair method of competition,
subject to the provisions of the Unfair Trade Practices Law
(Subtitle 15 of this article), for any person to make use in any
manner of the protection afforded by this subtitle in the sale of
insurance.

(6)  (a) If an order for liquidation or rehabilitation of an
insurer domiciled in this State has been entered, the receiver
appointed under such order shall have a right to recover on
behalf of the insurer, from any affiliate that controlled it, the
amount of distribution, other than stock dividends paid by the
insurer on its capital stock, made at any time during the [five]
5 years preceding the petition for liquidation or rehabilitation,
subject to the limitations of paragraphs (b) and (d) OF THIS
SUBSECTION.

(b)  No such dividend shall be recoverable if the
insurer shows that when paid the distribution was lawful and
reasonable, and that the insurer did not know and could not
reasonably have known that the distribution might adversely
affect the ability of the insurer to fulfill its contractual
obligations.

(c)  Any person who as an affiliate that controlled
the insurer at the time the distributions were paid shall be
liable up to the amount of distributions he received. Any person
who was an affiliate that controlled the insurer at the time the
distributions were declared, shall be liable up to the amount of
distributions he would have received if they had been paid
immediately. If [two] 2 OR MORE persons are liable with respect
to the same distributions, they shall be jointly and severally
liable.

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