PARRIS N. GLENDENING, Governor

Ch. 36

(2) INCLUDE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER
PROPERTY WITH A FAIR MARKET VALUE THAT, WHEN COMBINED WITH THE FAIR
MARKET VALUE OF OTHER DIVIDENDS AND DISTRIBUTIONS MADE IN THE
PRECEDING 12 MONTHS:

(I)       EXCEEDS 10% OF THE INSURER'S SURPLUS AS REGARDS
POLICYHOLDERS AS OF THE DECEMBER 31 IMMEDIATELY PRECEDING; OR

(II)     FOR AN INSURANCE SUBSIDIARY OF THE MEDICAL MUTUAL
LIABILITY INSURANCE SOCIETY OF MARYLAND, EXCEEDS 5% OF THE INSURER'S
SURPLUS AS REGARDS POLICYHOLDERS AS OF THE DECEMBER 31 IMMEDIATELY
PRECEDING.

(C)     DETERMINATION LIMITED BY EARNED SURPLUS.

(1)      THIS SUBSECTION ONLY APPLIES TO AN INSURER THAT:

(I)       HAS AN EARNED SURPLUS THAT EXCEEDS 10% OF ITS SURPLUS
AS REGARDS POLICYHOLDERS AS OF THE DECEMBER 31 IMMEDIATELY PRECEDING;
AND

(II)     IN THE IMMEDIATELY PRECEDING CALENDAR YEAR HAS
MORE THAN 75% OF ITS GROSS DIRECT WRITTEN PREMIUM IN HOMEOWNERS
INSURANCE, PRIVATE PASSENGER AUTOMOBILE LIABILITY INSURANCE, AND
PRIVATE PASSENGER AUTOMOBILE PHYSICAL DAMAGE INSURANCE.

(2)      IN DETERMINING WHETHER AN EXTRAORDINARY DIVIDEND OR
EXTRAORDINARY DISTRIBUTION EXISTS UNDER THIS SECTION, AN INSURER
DESCRIBED IN PARAGRAPH (1) OF THIS SUBSECTION SHALL:

(I)       EXCLUDE PRO RATA DISTRIBUTIONS OF ANY CLASS OF THE
INSURER'S OWN SECURITIES; AND

(II)     INCLUDE ANY DIVIDEND OR DISTRIBUTION OF CASH OR
OTHER PROPERTY, NOT EXCEEDING THE AMOUNT OF THE INSURER'S EARNED
SURPLUS, WITH A FAIR MARKET VALUE THAT, WHEN COMBINED WITH THE FAIR
MARKET VALUE OF OTHER DIVIDENDS AND DISTRIBUTIONS MADE IN THE
PRECEDING 12 MONTHS, EXCEEDS THE GREATER OF:

1.        10% OF THE INSURER'S SURPLUS AS REGARDS
POLICYHOLDERS AS OF THE DECEMBER 31 IMMEDIATELY PRECEDING; AND

2.        FOR THE IMMEDIATELY PRECEDING CALENDAR YEAR,
THE NET GAIN FROM OPERATION OF AN INSURER THAT IS A LIFE INSURER OR THE
NET INCOME OF AN INSURER OTHER THAN A LIFE INSURER.

(D)     NOTICE REQUIRED.

BEFORE PAYING AN EXTRAORDINARY DIVIDEND OR MAKING AN
EXTRAORDINARY DISTRIBUTION, AN INSURER SUBJECT TO REGISTRATION UNDER
SUBTITLE 6 OF THIS TITLE SHALL NOTIFY THE COMMISSIONER OF ITS INTENT TO
PAY THE EXTRAORDINARY DIVIDEND OR MAKE THE EXTRAORDINARY
DISTRIBUTION.

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