PARRIS N. GLENDENING, Governor

Ch. 36

(E) SUBSIDIARY.

"SUBSIDIARY" MEANS AN AFFILIATE OF A PERSON THAT, DIRECTLY OR
INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, IS CONTROLLED BY THAT
PERSON.

REVISOR'S NOTE: This subsection is new language derived without substantive
change from former Art. 48A, § 492(j).

The word "specified", which formerly modified "person", is deleted as
surplusage.

Defined terms: "Affiliate" § 7-101
"Control" § 1-101
"Person" § 1-101

REVISOR'S NOTE TO SECTION:

Former Art. 48A, § 492(b), which defined "company" to mean a corporation,
partnership, trust, reciprocal, joint-stock company, association, society, or similar
organization, is deleted as unnecessary. In this revision, the defined term "person" is used
to describe the entities formerly defined as a "company". Since the former law used both
"person" and "company", deletion of the definition of "company" avoids any unintended
ambiguity caused by defining different terms as the same entities. The Insurance Article
Review Committee calls this deletion to the attention of the General Assembly.

7-102. LEGISLATIVE FINDINGS; STATEMENT OF POLICY.

(A)     LEGISLATIVE FINDINGS.

THE GENERAL ASSEMBLY FINDS THAT THE PUBLIC INTEREST AND THE
INTEREST OF POLICYHOLDERS AND STOCKHOLDERS MAY BE ADVERSELY
AFFECTED WHEN:

(1)      CONTROL OF AN INSURER IS SOUGHT BY A PERSON THAT WOULD
USE THAT CONTROL ADVERSELY TO THE BEST INTEREST OF POLICYHOLDERS OR
STOCKHOLDERS;

(2)      ACQUISITION OF CONTROL OF AN INSURER WOULD
SUBSTANTIALLY LESSEN COMPETITION OR CREATE A MONOPOLY IN THE
INSURANCE BUSINESS IN THE STATE;

(3)      AN INSURER THAT IS PART OF AN INSURANCE HOLDING COMPANY
SYSTEM ENTERS INTO TRANSACTIONS OR RELATIONSHIPS WITH AFFILIATES ON
TERMS THAT ARE NOT FAIR AND REASONABLE; OR

(4)      AN INSURER PAYS TO STOCKHOLDERS DIVIDENDS THAT
JEOPARDIZE THE FINANCIAL CONDITION OF THE INSURER.

(B)     STATEMENT OF POLICY.

THE PURPOSES OF THIS TITLE INCLUDE PROMOTING THE PUBLIC INTEREST BY:
(1) REQUIRING DISCLOSURES IN ACQUISITIONS OR MERGERS;

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