Ch. 9

1993 LAWS OF MARYLAND

(ii) The formula established under subparagraph (i) of this paragraph may
not result in any reinsuring carrier having an assessment share that is less than 50% nor more
than 150% of an amount which is based on the proportion of the reinsuring carrier's total
premiums earned in the preceding calendar year from health benefit plans delivered or issued
for delivery [to small employers] in this State to total premiums earned in the preceding
calendar year from health benefit plans delivered or issued for delivery [to small employers] in
this State by all reinsuring carriers.

(iii) The Board may, with the approval of the Commissioner, change the
assessment formula established pursuant to subparagraph (i) of this paragraph from time to
time as appropriate. The Board may provide for the shares of the assessment base attributable
to premiums from all health benefit plans and to premiums from newly issued health benefit
plans to vary during a transition period.

(iv) Subject to the approval of the Commissioner, the Board shall make an
adjustment to the assessment formula for reinsuring carriers that are approved health
maintenance organizations which are federally qualified under 42 U.S.C. Sec. 300, et seq., to
the extent, if any, that restrictions are placed on them that are not imposed on other [small
employer] carriers.

(v) Premiums and benefits paid by a reinsuring carrier that are less than
an amount determined by the Board to justify the cost of collection shall not be considered for
purposes of determining assessments.

(3) (i) Prior to March 1 of each year, the Board shall determine and file with
the Commissioner an estimate of the assessments needed to fund the losses incurred by the
pool in the previous calendar year.

(ii) 1. If the Board determines that the assessments needed to fund the
losses incurred by the program in the previous calendar year will exceed the amount specified
in subparagraph (iii) of this paragraph, the Board shall evaluate the operation of the pool and
report its findings, including any recommendations for changes to the plan of operation, to the
Commissioner within 90 days following the end of the calendar year in which the losses were
incurred.

2. The evaluation under subparagraph (ii)1 of this paragraph shall
include: an estimate of future assessments, the administrative costs of the pool, the
appropriateness of the premiums charged and the level of insurer retention under the program,
and the costs of coverage for [small employers ] INDIVIDUALS AND GROUPS.

3. If the Board fails to file the report with the Commissioner within
90 days following the end of the applicable calendar year, the Commissioner may evaluate the
operations of the pool and implement amendments to the plan of operation that the
Commissioner deems necessary to reduce future losses and assessments.

(iii) For any calendar year, the amount specified in this subparagraph may
not exceed 5% of total premiums earned the previous year from health benefit plans delivered
or issued for delivery [to small employers] in this State by reinsuring carriers.

- 604 -