PARRIS N. GLENDENING, Governor

Ch. 36

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 685(a).

In item (1) of this section, the phrase "file with" is substituted for the former
phrase "submit to" to conform to language used in other comparable
application sections of this article.

Defined term: "Commissioner" § 1-101

8-306. BONDS.

(A)     IN GENERAL.

THE BOND REQUIRED FOR AN ADMINISTRATOR UNDER THIS SUBTITLE MUST:

(1)      PROVIDE PROTECTION TO THE PLANS, FOR WHICH THE
ADMINISTRATOR ACTS AS AN ADMINISTRATOR, AGAINST LOSS BECAUSE OF ACTS
OF FRAUD OR DISHONESTY ON THE PART OF THE ADMINISTRATOR, DIRECTLY OR
THROUGH CONNIVANCE WITH OTHERS; AND

(2)      BE ISSUED BY AN AUTHORIZED CORPORATE SURETY INSURER
THAT IS AN ACCEPTABLE SURETY ON FEDERAL BONDS UNDER AUTHORITY
GRANTED BY THE SECRETARY OF THE TREASURY.

(B)     AMOUNT.

(1)      SUBJECT TO THIS SECTION, THE AMOUNT OF THE BOND SHALL BE
DETERMINED AT THE TIME AN APPLICATION FOR REGISTRATION OR RENEWAL OF
REGISTRATION IS FILED.

(2)      TO DETERMINE THE AMOUNT OF THE BOND:

(I)       THE AVERAGE AMOUNT OF MONEY THAT THE
ADMINISTRATOR AND ANY PREDECESSOR OF THE ADMINISTRATOR HANDLED AT
ANY ONE TIME DURING THE IMMEDIATELY PRECEDING CALENDAR YEAR SHALL BE
CONSIDERED; AND

(II)     THE AVERAGE AMOUNT OF MONEY THAT THE
ADMINISTRATOR EXPECTS TO HANDLE AT ANY ONE TIME DURING THE CURRENT
CALENDAR YEAR SHALL BE CONSIDERED.

(3)      THE AMOUNT OF THE BOND:

(I)       MAY NOT BE LESS THAN 10% OF THE AVERAGE AMOUNT OF
MONEY THAT THE ADMINISTRATOR EXPECTS TO HANDLE AT ANY ONE TIME FOR
ALL THE PLANS THAT THE ADMINISTRATOR EXPECTS TO ADMINISTER DURING THE
COMING YEAR; AND

(II)     SUBJECT TO PARAGRAPH (4) OF THIS SUBSECTION, MAY NOT
BE LESS THAN $5,000 OR MORE THAN $500,000.

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