Ch. 36

1995 LAWS OF MARYLAND

(1)     IF INSURANCE BUSINESS IS PLACED THROUGH A CONTROLLING
BROKER, THE CONTROLLING BROKER SHALL DELIVER WRITTEN NOTICE TO THE
PROSPECTIVE INSURED BEFORE THE EFFECTIVE DATE OF THE POLICY, DISCLOSING
THE RELATIONSHIP BETWEEN THE CONTROLLING BROKER AND THE CONTROLLED
INSURER.

(2)      THE DISCLOSURE SHALL BE SIGNED BY THE PROSPECTIVE INSURED
AND RETAINED IN THE UNDERWRITING FILE UNTIL THE FILING OF THE
EXAMINATION REPORT FOR THE PERIOD DURING WHICH THE POLICY IS IN EFFECT.

(3)      IF INSURANCE BUSINESS IS PLACED THROUGH A SUBBROKER THAT
IS NOT A CONTROLLING BROKER, THE CONTROLLING BROKER SHALL RETAIN IN
THE CONTROLLING BROKER'S RECORDS A SIGNED STATEMENT FROM THE
SUBBROKER THAT:

(I)      THE SUBBROKER IS AWARE OF THE RELATIONSHIP BETWEEN
THE CONTROLLING BROKER AND THE CONTROLLED INSURER;

(II)     THE SUBBROKER HAS DELIVERED TO THE PROSPECTIVE
INSURED WRITTEN NOTICE DISCLOSING THAT RELATIONSHIP; AND

(III)   THE DISCLOSURE HAS BEEN SIGNED BY THE PROSPECTIVE
INSURED AND WILL BE RETAINED BY THE SUBBROKER FOR 3 YEARS.

'(E) SAME — PAYMENT OF MONEY COLLECTED.

AT LEAST QUARTERLY, THE CONTROLLING BROKER SHALL PAY TO THE
CONTROLLED INSURER ALL MONEY THAT THE CONTROLLING BROKER COLLECTED
FOR THE ACCOUNT OF THE CONTROLLED INSURER, NET OF COMMISSIONS,
CANCELLATIONS, AND OTHER ADJUSTMENTS.

(F)      SAME — OPINION OF LOSS RATIOS AND RESERVES.

(1)      IN ADDITION TO ANY' OTHER REQUIRED LOSS RESERVE
CERTIFICATION, THE CONTROLLED INSURER ON OR BEFORE APRIL 1 OF EACH YEAR
SHALL FILE WITH THE COMMISSIONER AN OPINION OF:

(I)       AN INDEPENDENT CASUALTY ACTUARY; OR

(II)     ANOTHER INDEPENDENT LOSS RESERVE SPECIALIST
ACCEPTABLE TO THE COMMISSIONER.

(2)      THE OPINION SHALL:

(I)       REPORT LOSS RATIOS FOR EACH LINE OF INSURANCE
BUSINESS WRITTEN; AND

(II)     ATTEST THAT LOSS RESERVES ARE ADEQUATE FOR LOSSES
INCURRED AND OUTSTANDING AS OF YEAR END ON INSURANCE BUSINESS PLACED
BY THE CONTROLLING BROKER, INCLUDING LOSSES INCURRED BUT NOT
REPORTED.

(G)     SAME — ANNUAL REPORT.

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