PARRIS N. GLENDENING, Governor                                   Ch. 36

(3)      A REINSURANCE AGREEMENT, OR A MODIFICATION TO A
REINSURANCE AGREEMENT, INCLUDING AN AGREEMENT THAT REQUIRES AS
CONSIDERATION THE TRANSFER OF ASSETS FROM AN INSURER TO A PERSON THAT
IS NOT ITS AFFILIATE, IF:

(I)       THE PARTIES HAVE AN AGREEMENT OR UNDERSTANDING
THAT PART OF THE INSURER'S ASSETS WILL BE TRANSFERRED TO AN AFFILIATE OF
THE INSURER; AND

(II)     AS OF THE DECEMBER 31 IMMEDIATELY PRECEDING THE
TRANSACTION, THE AMOUNT OF THE REINSURANCE PREMIUM OR CHANGE IN THE
INSURER'S LIABILITIES EQUALS OR EXCEEDS 5% OF THE INSURER'S SURPLUS AS
REGARDS POLICYHOLDERS;

(4)      A MANAGEMENT AGREEMENT, SERVICE CONTRACT, OR
COST-SHARING ARRANGEMENT; AND

(5)      A MATERIAL TRANSACTION THAT THE COMMISSIONER
DETERMINES MAY ADVERSELY AFFECT THE INTERESTS OF THE INSURER'S
POLICYHOLDERS.

(F)      REVIEW OF TRANSACTIONS.

IN REVIEWING TRANSACTIONS UNDER SUBSECTION (E) OF THIS SECTION, THE
COMMISSIONER SHALL CONSIDER WHETHER A TRANSACTION:

(1)      COMPLIES WITH THE STANDARDS STATED IN § 7-702 OF THIS
SUBTITLE; OR

(2)      POTENTIALLY ADVERSELY AFFECTS THE INTERESTS OF
POLICYHOLDERS.

(G)     RESCISSION OF MATERIAL TRANSACTION.

(1)      A MATERIAL TRANSACTION THAT DOES NOT CONFORM TO THIS
SECTION IS A VIOLATION OF THIS TITLE.

(2)      IN ADDITION TO THE SANCTIONS IN §§ 7-802, 7-803, 7-805, AND 7-807
OF THIS TITLE, THE COMMISSIONER MAY SET ASIDE AND RESCIND A MATERIAL
TRANSACTION THAT THE COMMISSIONER FINDS DOES NOT CONFORM TO THIS
SECTION AT THE INITIATIVE OF THE COMMISSIONER OR OTHERWISE UNDER
APPLICABLE LAW.

(3)      WITHIN 90 DAYS AFTER THE DATE THAT THE COMMISSIONER
RECEIVES INFORMATION ABOUT THE MATERIAL TRANSACTION, THE
COMMISSIONER SHALL GIVE THE INSURER NOTICE OF THE PROPOSED ACTION TO
SET ASIDE OR RESCIND THE MATERIAL TRANSACTION AND AN OPPORTUNITY FOR A
HEARING.

(H) OTHER VIOLATIONS OF SECTION.

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