Ch. 36                                          1995 LAWS OF MARYLAND

THE INSURER SHALL NOTIFY THE COMMISSIONER UNDER SUBSECTION (B) OF
THIS SECTION:

(1)      AT LEAST 30 DAYS BEFORE THE TRANSACTION IS TO BE ENTERED
INTO; OR

(2)      IF THE COMMISSIONER ALLOWS A SHORTER NOTICE PERIOD,
WITHIN THE TIME THAT THE COMMISSIONER SETS.

(D)     AUTHORITY TO ENTER INTO TRANSACTION.

A DOMESTIC INSURER AND ANOTHER MEMBER OF THE SAME INSURANCE
HOLDING COMPANY SYSTEM MAY ENTER INTO A TRANSACTION UNDER THIS
SECTION ONLY IF, WITHIN THE NOTICE PERIOD UNDER SUBSECTION (C) OF THIS
SECTION, THE COMMISSIONER DOES NOT DISAPPROVE THE TRANSACTION.

(E)     TRANSACTIONS SUBJECT TO NOTICE REQUIREMENT.

THE FOLLOWING TRANSACTIONS ARE SUBJECT TO SUBSECTIONS (B), (C), AND
(D) OF THIS SECTION:

(1)      A SALE, PURCHASE, EXCHANGE, LOAN, EXTENSION OF CREDIT,
GUARANTEE, OR INVESTMENT, IF, AS OF THE DECEMBER 31 IMMEDIATELY
PRECEDING THE TRANSACTION, THE AMOUNT OF THE TRANSACTION EQUALS OR
EXCEEDS:

(I)      WITH RESPECT TO A LIFE INSURER, 3% OF THE INSURER'S
ADMITTED ASSETS; AND

(II)     WITH RESPECT TO AN INSURER OTHER THAN A LIFE INSURER,
THE LESSER OF 3% OF THE INSURER'S ADMITTED ASSETS AND 25% OF SURPLUS AS
REGARDS POLICYHOLDERS;

(2)      A LOAN OR EXTENSION OF CREDIT BY AN INSURER TO A PERSON
THAT IS NOT AN AFFILIATE IF:

(I)      THE PARTIES HAVE AN AGREEMENT OR UNDERSTANDING
THAT THE PROCEEDS OF THE TRANSACTION, AS A WHOLE OR IN SUBSTANTIAL
PART, ARE TO BE USED TO MAKE LOANS OR EXTENSIONS OF CREDIT TO PURCHASE
ASSETS OF OR TO MAKE INVESTMENTS IN AN AFFILIATE OF THE INSURER; AND

(II)     AS OF THE DECEMBER 31 IMMEDIATELY PRECEDING THE
TRANSACTION, THE AMOUNT OF THE TRANSACTION EQUALS OR EXCEEDS:

1.        WITH RESPECT TO A LIFE INSURER, 3% OF THE INSURER'S
ADMITTED ASSETS; AND

2.        WITH RESPECT TO AN INSURER OTHER THAN A LIFE
INSURER, THE LESSER OF 3% OF THE INSURER'S ADMITTED ASSETS AND 25% OF
SURPLUS AS REGARDS POLICYHOLDERS;

- 1058 -