Ch. 507                                         1993 LAWS OF MARYLAND

(B)      THE COMMISSIONER MAY NOT APPROVE ANY PLAN OR PROCEDURE
UNLESS THE PLAN OR PROCEDURE:

(1)       IS EQUITABLE TO ENROLLEES AND CERTIFICATE HOLDERS, IF ANY,
OF THE CORPORATION;

(2)      IS APPROVED BY AT LEAST TWO-THIRDS OF THE CORPORATION'S
CERTIFICATE HOLDERS WHO HAVE VOTED ON THE PLAN OR PROCEDURE:

(I)       IN PERSON, BY PROXY, OR BY MAIL; AND

(II)     PURSUANT TO THE REQUIREMENTS APPROVED BY THE
COMMISSIONER REGARDING NOTICE AND PROCEDURE;

(3)       IS IN COMPLIANCE WITH TITLE 2, SUBTITLE 6 OF THE
CORPORATIONS AND ASSOCIATIONS ARTICLE;                                                                       

(4)      PROVIDES THAT NO PART OF THE ASSETS OR SURPLUS OF THE
NONPROFIT HEALTH SERVICE PLAN WILL INURE DIRECTLY OR INDIRECTLY TO ANY
OFFICER OR DIRECTOR OF THE CORPORATION; AND

(5)      ENSURES THAT THE RESULTING MUTUAL HEALTH INSURER WILL
POSSESS A SURPLUS IN AN AMOUNT SUFFICIENT TO:

(I)       COMPLY WITH THE SURPLUS REQUIRED UNDER THIS ARTICLE
FOR A MUTUAL HEALTH INSURER; AND

(II)     PROVIDE FOR THE SECURITY OF THE RESULTING MUTUAL
HEALTH INSURER'S CERTIFICATE HOLDERS AND POLICYHOLDERS.

(C)      ANY CORPORATION THAT BECOMES A MUTUAL HEALTH INSURER UNDER
THIS SECTION MAY NOT BE DEEMED TO HAVE ABANDONED ITS CORPORATE STATUS
BY VIRTUE OF THE CONVERSION, UNLESS THE PLAN PROVIDES SPECIFICALLY TO
THE CONTRARY.

(D)     THE CERTIFICATE OF AUTHORITY, AGENT APPOINTMENTS, FORMS, AND
OTHER FILINGS WHICH ARE IN EXISTENCE AT THE TIME OF THE CONVERSION
SHALL CONTINUE IN FULL FORCE AND EFFECT UPON CONVERSION IF THE
CORPORATION AT ALL TIMES REMAINS QUALIFIED TO ENGAGE IN BUSINESS IN THIS
STATE.

(E)      ALL OUTSTANDING CONTRACTS OF THE CONVERTING CORPORATION
SHALL REMAIN IN FULL FORCE AND EFFECT AND NEED NOT OTHERWISE BE
ENDORSED UNLESS ORDERED BY THE COMMISSIONER.

(F)      THE COMMISSIONER OR A DESIGNEE OF THE COMMISSIONER MAY
CONDUCT A HEARING CONCERNING THE PROPOSED CONVERSION OF A NONPROFIT
HEALTH SERVICE CORPORATION INTO A MUTUAL HEALTH INSURER.

(G)     THIS SECTION DOES NOT APPLY TO THE CONVERSION OF A
CORPORATION LICENSED UNDER THIS SUBTITLE TO A MUTUAL HEALTH INSURER
THAT RESULTS FROM A JUDICIAL ORDER ISSUED PURSUANT TO A REHABILITATION
OR REORGANIZATION OF THE CORPORATION UNDER SUBTITLE 10 OF THIS ARTICLE.

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