WILLIAM DONALD SCHAEFER, Governor Ch. 748

exempt from taxation under § 501(c)(4) of the Internal Revenue
Code]; OR

2. A NONPROFIT ASSOCIATION, CORPORATION,
OR OTHER ORGANIZATION THAT IS;

A.  COMPRISED OF RESIDENTS OF A CONTIGUOUS
COMMUNITY THAT IS DEFINED BY SPECIFIC GEOGRAPHIC BOUNDARIES; AND

B.  OPERATED FOR THE PROMOTION OF THE
WELFARE, IMPROVEMENT, AND ENHANCEMENT OF THAT COMMUNITY.

(II) "COMMUNITY ASSOCIATION" INCLUDES A
NONPROFIT CORPORATION THAT REPRESENTS THE COMMON INTEREST OF MORE
THAN ONE COMMUNITY ASSOCIATION.

(6) "Homeowners' association" means a nonprofit
organization comprised of property owners in a subdivision or
group of subdivisions whose purpose is to represent the mutual
interest of the property owners regarding the construction,
protection, and maintenance of the commonly owned or used
property and improvements.

(b)  Except as provided in subsection (d) of this section,
an agent of an association or organization is not personally
liable for damages in any suit if:

(1)  The association or organization maintains
insurance covering liability incurred by the association or
organization or its agents, or both, as a result of the acts or
omissions of its agents in providing services or performing
duties on behalf of the association or organization;

(2)  The terms of the insurance policy under which the
insurance is maintained provide coverage for the act or omission
which is the subject matter of the suit and no meritorious basis
exists for the denial of the coverage by the insurance carrier;
and

(3)  The insurance has:

(i) A limit of coverage of not less than
$200,000 per individual claim, and $500,000 per total claims that
arise from the same occurrence; and

(ii) 1. If the insurance has a deductible, a
deductible amount not greater than $10,000 per occurrence; or

2. If there is coinsurance, a rate of
coinsurance not greater than 20 percent.

(c)   In suits to which the provisions of subsection (b) of
this section apply, the plaintiff may recover damages from the

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