WILLIAM DONALD SCHAEFER, Governor                         Ch. 530

(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 association or organization only to the extent of
the applicable limit of insurance coverage including any amount for which the association
or organization is responsible as a result of any deductible or coinsurance provisions of
such insurance coverage.

(d)     An agent of an association or organization shall be liable for damages in any
suit in which it is found that the agent acted with malice or gross negligence, to the extent
that the judgment for damages exceeds the limits on liability under subsection (c) of this
section.

(e)     The provisions of this section do not apply to suits brought by the Attorney
General upon referral by the Secretary of State in which willful violations of Article 41, §§
3-201 through 3-214 are alleged and proven.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed
only prospectively and may not be applied or interpreted to have any effect on or
application to any cause of action arising before the effective date of this Act.

SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take
effect October 1, 1994.

Approved May 26, 1994.

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