PARRIS N. GLENDENING, Governor

Ch. 36

(4)      WITHOUT THE INSURER'S WRITTEN APPROVAL, PAY OR COMMIT
THE INSURER TO PAY A CLAIM, NET OF REINSURANCE, THAT EXCEEDS 1% OF THE
INSURER'S POLICYHOLDER SURPLUS AS OF DECEMBER 31 OF THE IMMEDIATELY
PRECEDING CALENDAR YEAR;

(5)      WITHOUT THE INSURER'S PRIOR WRITTEN APPROVAL, COLLECT
ANY PAYMENT FROM A REINSURER;

(6)      COMMIT THE INSURER TO A CLAIM SETTLEMENT WITH A
REINSURER;

(7)      EMPLOY AN INDIVIDUAL WHO ALSO IS EMPLOYED BY THE INSURER;

(8)      ALLOW AN AGENT OR EMPLOYEE OF THE MANAGING GENERAL
AGENT TO SERVE ON THE INSURER'S BOARD OF DIRECTORS; OR

(9)      APPOINT A SUBMANAGING GENERAL AGENT UNLESS:

(I)      APPROVAL OF THE APPOINTMENT IS OBTAINED FROM THE
COMMISSIONER AND FROM THE INSURER FOR WHOM THE MANAGING GENERAL
AGENT ACTS; AND

(II)     THE SUBMANAGING GENERAL AGENT COMPLIES WITH ANY
REQUIREMENTS IMPOSED BY THE COMMISSIONER UNDER § 8-213 OF THIS SUBTITLE.

(B) BINDING REINSURANCE OR RETROCESSIONS.

(1)      EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION, A
MANAGING GENERAL AGENT MAY NOT BIND REINSURANCE OR RETROCESSIONS
FOR AN INSURER.

(2)      A MANAGING GENERAL AGENT MAY BIND FACULTATIVE
REINSURANCE CONTRACTS UNDER OBLIGATORY FACULTATIVE AGREEMENTS IF
THE CONTRACT WITH THE INSURER CONTAINS REINSURANCE UNDERWRITING
GUIDELINES FOR REINSURANCE BOTH ASSUMED AND CEDED, INCLUDING:

(I)      A LIST OF REINSURERS WITH WHICH THE AUTOMATIC
AGREEMENTS ARE IN EFFECT;

(II)     THE COVERAGES AND AMOUNTS OR PERCENTAGES THAT MAY
BE REINSURED; AND

(III)    COMMISSION SCHEDULES.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 669.

In subsection (a)(9)(ii) of this section, the reference to "§ 8-213 of this
subtitle" is substituted for the former inaccurate reference to "§ 680 of this
subtitle". Former Art. 48A, § 680 covered bail bondsman services, not
submanaging general agents. Former Art. 48A, § 675 covered requirements for
submanaging general agents and has been revised as § 8-213 of this subtitle.

- 1091 -